Issue - meetings

This report asks the Executive to consider the rent guidelines issued by the Department for Communities and Local Government (CLG) for 2009/10 and to decide on the level of the Council’s rent increases for that year.

RESOLVED: (i)         That Option 2 be approved and that an average rent increase in York of 6% be agreed.

REASON:      In accordance with Government advice, and to ensure a balanced Housing Revenue Account.

                        (ii)        That the information provided at the meeting in respect of Housing Revenue subsidy payment (now published as Annex 1 to the report) be noted, and that the Executive record its concern that the Council is unable to invest this sum (totalling £26,440,000) in improving housing services in York.

Members considered a report which asked them to agree an appropriate level of rent increase for the City of York, in the light of the rent guidelines issued by the Department for Communities and Local Government (CLG) for 2009/10.

To achieve rent convergance (i.e. similar properties charged similar rents regardless of owner) by the government’s original deadline of 2011/12, an average increase in council rents of 7.7% would be needed.  However, the CLG had proposed that the convergance deadline be extended this year to 2023/24, subject to review in future years.  If the rent calculations were altered to take account of this, the average increase would be 6%.

Members were asked to consider the following options:

Option 1 – continue rent re-structuring with convergance in 2011/12 and increase rents by 7.7%.  This would be against government guidance.

Option 2 – continue rent re-structuring with convergance in 2023/24 and increase rents by 6%.  This was the recommended option, in line with government guidance and the recommendation of the CLG..

Option 3 – implement a rent increase of 2.5%, in line with other fees and charges.  This would mean either extending the date for rent convergance beyond the recommended date, imposing higher increases in future years or reducing the working balance on the Housing Revenue Account.

Members noted that the additional income from the rent increase would not go towards improving services in York but would effectively subsidise rents in other parts of the country.  Details of this ‘negative subsidy’ were circulated at the meeting and have been published on-line with the agenda for this meeting as an annex to the report on this item.

Having noted the comments of the Shadow Executive on this item, it was

RESOLVED: (i)         That Option 2 be approved and that an average rent increase in York of 6% be agreed. ¹

REASON:      In accordance with Government advice, and to ensure a balanced Housing Revenue Account.

                        (ii)        That the information provided at the meeting in respect of Housing Revenue subsidy payment be noted, and that the Executive record its concern that the Council is unable to invest this sum (totalling £26,440,000) in improving housing services in York.