How we’re tackling pressure on council housing budgets
The Housing Revenue Account (HRA) for 2023/24 will be discussed at this week’s Housing Policy Committee which outlines how we propose to balance the HRA budget, what we’ve already achieved and what our priorities will be for the year ahead.
Amongst other plans and proposed changes, the committee will be asked to consider an increase in council housing rents in Sheffield as local authorities across the country continue to battle a challenging financial picture whilst continuing to invest for the future in the city’s housing stock.
The proposals include increasing rents for council homes, temporary accommodation and garages by 7%, from April 2023 in line with many other local authorities and housing providers. This means on average the weekly increase for a property will be around £5.
The council’s Housing Revenue Account (HRA) is the financial account of the council as a landlord. The income that the account receives from rents and government funding can only be spent on council housing, housing land and certain activities in connection with the provision of council housing. Other council services are funded through council tax and central government support.
The rents increase will generate more than £10 million additional income to the HRA to improve services to tenants and help with some of the current pressures. This rent increase would be covered by Housing Benefit and or Universal Credit for around 70% of tenants who are eligible. The remaining 30% of tenants would have to cover the full cost of the rent increase. However additional budget provision has been made to provide an increase in financial support and Hardship payments to support those impacted by the current cost of living crisis.
The report recommends that the Council’s Hardship Fund for 2023/2024 should be tripled, from £150,000 to £450,000 to offer vital assistance to tenants who are struggling to pay their rent.
The report will be taken to Full Council for a final decision in February.
The Housing Policy Committee will consider the linked HRA business plan which sets out the council’s longer-term plans to make the most of the money available to deliver positive housing outcomes for people in Sheffield.
The report recommends a series of investment priorities for 2023/24 for members to consider. The recommended priorities would see the council increase the budget for the repairs service to £47 million, protect investment in the council’s housing stock, improve the insulation and heating systems of existing council homes, improve homes to reduce the demand on the housing repairs service and tackle damp and mould in council homes through a new Task Group.
The HRA has delivered significant improvements in 2022/23 addressing key priorities set as part of last year’s business plan, this is an unprecedented time for council budgets, and it will propose a number of recommendations to balance the HRA budget and to protect tenants’ services. The budget is set against the backdrop of developments in national policy, the national economic climate, and reductions in government funding.
Some of the significant improvements delivered through the HRA include an increase in the number of new council homes through significant investment in a ground-breaking development for older people at Buchanan Green and a range of new and refurbished homes for families on council sites and on mixed-tenure developments across the city. By December 2022, the council has delivered 966 new homes as part of its plan to provide over 2,000 new homes, 207 of those in 2022 and a further 74 in 2023.
Douglas Johnson, Chair of the Housing Policy Committee, said: “Like local authorities across the country, we are really up against it. We know we won’t be the only ones increasing rents this year but that doesn’t change the fact that there will be an impact on residents here in Sheffield who are already battling a cost-of-living crisis, even with the increase we’re proposing in the Hardship Fund to support the most vulnerable.
“What I will say is that as a council this is one strand to a much wider piece of work we’re doing to make sure that the limited funds we have are spent well and genuinely create good outcomes for people in Sheffield. The proposals that are being put forward include commitments to improve the quality of our existing stock – whether it’s improving heating systems or our repairs service. We’ve already made significant improvements in the last year, investing in a ground-breaking development for older people at Buchanan Green and over 200 new and refurbished homes for families on council sites and on mixed-tenure developments across the city, with more still planned this year.
“And £600 million capital investment in existing homes over the next 5 years is in place to make sure that tenants continue to live in warm and safe homes and the council has invested an additional £6 million for delivering and improving the repairs service to tenants during 2022/23.
“What we can’t get away from is the fact that a tough national picture continues to force local authorities into making tough decisions. Even though we put our case to Government which resulted in the cuts to us being less than they could have been, the rising cost of inflation, materials and purchasing constraints and pressures on the cost of living have all had a big impact and will continue to do so.
“We recognise the impact that rising rents will have on our tenants given that they are faced with lots of other cost of living pressures. The bigger picture is that the Government has limited rent increases which will reduce the amount of money that can be invested in social housing. We don’t want anyone’s rent to rise, but we estimate the city could lose £12 million every year because of the government’s decision, which will have a considerable negative impact on council housing here.
“But we are doing all we can to balance a budget and continue to deliver – that includes the £300,000 increase in the Hardship Fund providing support to those who need it most.”
Additional recommendations in the report include a 7% increase for sheltered housing, burglar alarm and furnished accommodation charges.
Priorities
The report to the Housing Policy Committee on 2nd February outlines a number of priorities including that the council’s Net Zero target will be progressed with a Climate Change 10 point-plan, the growing fuel poverty crisis will be addressed through improving the insulation and heating systems of council homes and external funding opportunities from Government and other sources pursued to accelerate the retrofitting of Sheffield’s housing stock.
An extensive programme of capital improvements will be completed over the next two years, including the installation of 1,056 new boilers and/or heating systems, 18 tower block roof replacement programmes and new kitchens, bathrooms, windows, doors, electrical and loft insulation upgrades installed to 3399 properties. This will create warmer and more energy efficient spaces for tenants and a range of cost-of-living support has been offered to tenants.
Help will be provided to those in need of support to manage their money. 127 Hardship Fund Payments had been paid out by November last year to help families pay their rent and over 200 staff in the housing service have been trained on how to use the Council’s Cost of Living toolkit to support tenants.
As well as improving the management of disrepairs claims, communicating clearly with customers and tackling backlogs, the council plans to further reduce the time that properties are empty and to get homes ready for new tenants as quickly as possible.
The council will continue to support tenants to manage their finances providing advice and increased hardship payments for those in need. We are making improvements to the customer experience, making it easier and quicker to contact the council and it will respond to and learn from complaints when things go wrong.
An important element of the work will be to increase the opportunities for tenants to get involved in shaping services, allowing tenants to tell the council what they think needs to be improved. Regular tenant satisfaction surveys will continue.
Work will continue on working closely with health and care services in a structured way with a focus on prevention to support active ageing and wellbeing, supporting reductions in hospitals admissions, falls and risks of falls and in delaying the need for care services and moves into residential care.
Notes to editors:
- 7% is the maximum increase currently permitted by central government
- Each year the HRA Business Plan is reviewed and updated to set budgets and charges for the year ahead and to provide an updated 5-year plan and 30-year affordability profile. The HRA faces significant budget pressures going into 2023/24, and these pressures will impact on the ability of the HRA Business Plan to remain affordable over the next 30/40 years.