Issue - meetings

This report asks the Executive Member to consider the rent guidelines and the management and maintenance allowances issued by the Department for Communities and Local Government (DCLG) for 2007/08.

Members received a report which asked the Executive Member to consider the rent guidelines and the management and maintenance allowances issued by the Department for Communities and Local Government (DCLG) for 2007/08.

Members were presented with three options:-

Option 1

In order to reduce the rent increase to within the DCLG limit of 5% a flat rate reduction across all council dwelling rents could be applied which would reduce each individual property rent by £0.45 per week and reduce the average increase to 5%. The Housing Revenue Account (HRA) would not lose any income by reducing the average increase from 5.82% to 5% as the reduction in increase from 5.82% to 5% would be compensated for by the DCLG through the rental constraint allowance, which forms part of the housing subsidy calculation.

Option 2 – RECOMMENDED OPTION

In order to reduce the rent increase to within the DCLG limit of 5% a reduction of £1.17 could be applied to bedsits and 1 bed flats. Both of these dwelling types are more difficult to let. Of 597 relets in 05/06 60% were bedsits or 1 bed flats therefore applying the rent reduction in these areas may make them easier to let and whilst they were void the rent loss would be reduced.

Option 3

To ignore DCLG recommendations and increase council dwelling rents by 5.82%. This option would not generate any additional income for the HRA and would be difficult to justify as the reduction in increase from 5.82% to 5% outlined in options 1 and 2 would be compensated for by the DCLG through the rental constraint allowance as part of the Housing subsidy calculation.

The Labour Group reserved their position.

Advice of the Advisory Panel

That the Executive Member for Housing be advised to approve option 2 and the rent increase in York of 5% be referred to Executive for approval.

Decision of the Executive Member for Housing

RESOLVED:             That the advice of the Advisory Panel as set out above be accepted and endorsed.

REASON:                  To enable a balanced HRA and comply with rent restructuring policy.

Members received a report which asked the Executive Member to consider the rent guidelines and the management and maintenance allowances issued by the Department for Communities and Local Government (DCLG) for 2007/08.

Members were presented with three options:-

Option 1

In order to reduce the rent increase to within the DCLG limit of 5% a flat rate reduction across all council dwelling rents could be applied which would reduce each individual property rent by £0.45 per week and reduce the average increase to 5%. The Housing Revenue Account (HRA) would not lose any income by reducing the average increase from 5.82% to 5% as the reduction in increase from 5.82% to 5% would be compensated for by the DCLG through the rental constraint allowance, which forms part of the housing subsidy calculation.

Option 2 – RECOMMENDED OPTION

In order to reduce the rent increase to within the DCLG limit of 5% a reduction of £1.17 could be applied to bedsits and 1 bed flats. Both of these dwelling types are more difficult to let. Of 597 relets in 05/06 60% were bedsits or 1 bed flats therefore applying the rent reduction in these areas may make them easier to let and whilst they were void the rent loss would be reduced.

Option 3

To ignore DCLG recommendations and increase council dwelling rents by 5.82%. This option would not generate any additional income for the HRA and would be difficult to justify as the reduction in increase from 5.82% to 5% outlined in options 1 and 2 would be compensated for by the DCLG through the rental constraint allowance as part of the Housing subsidy calculation.

The Labour Group reserved their position.

Advice of the Advisory Panel

That the Executive Member for Housing be advised to approve option 2 and the rent increase in York of 5% be referred to Executive for approval.

Decision of the Executive Member for Housing

RESOLVED:             That the advice of the Advisory Panel as set out above be accepted and endorsed.

REASON:                  To enable a balanced HRA and comply with rent restructuring policy.