Keith Robbins (Finance Manager) gave a summary of the report:
Average increase for garage & parking space rents 4.36%
Self-financing this year - taken on £223m worth of debt
The following issues were raised:
Cannot local councils set their own rents? Explain more about national social rents policy.
Keith Robbins: Following guidelines for last 12 years. Principle - people living in similar housing should pay same rent - whether council or housing associations (HAs). Previously HA rents were higher. Guidance not statutory. When self-financing settlement decided, the government assumed we would continue to follow the policy.and calculated the debt accordingly- if we do not increase rents then it would have cumulative effect, leading to a shortfall in excess of £200m over next 30 years.
When garages are used by businesses, why not put those rents up?
Keith Robbins: Rents up by same %. All goes into the same pot and is invested in housing stock.
Report talks about impact of benefit cap. Increase in bad debt - what is being done to mitigate that?
Keith Robbins: Bad debt - Croydon has a very good collection rate. Made additional provision to cover impact of benefit cap etc. Want to build up reserve to avoid hit in one year.
Dave Sutherland: Mitigating - lot of work - just over 1200 tenants affected by 'bedroom tax' and around 60 hit by benefit cap. In process of visiting everyone to talk through their circumstances, find out how they think they will cope and to offer advice. Results - vast majority saying they can deal with it. Small % interested in moving - less than 20. Others will charge their family members or absorb the cost.
What action taken to support tenants hit by reduction in benefits?
Dave Sutherland: Only small number - under 60.
Figure of bad debt - how was this calculated?
Keith Robbins: Do not yet know true impact - increased bad debt provision and will continue to review - if need to increase will do so. Guesstimate. Reviewed every year. If do not use it, it will be put into reserve and can then be used to invest in housing stock.
With Universal Credit being paid direct to tenants, will this not increase bad debt?
Dave Sutherland: Universal credit - one benefit. People will receive directly, in arrears. Tenants will be able to budget and prioritise their outgoings. We will have facility to arrange payment direct if people get into difficulty.
The Panel noted:
1.1 Rent increases for all Council tenants for 2013/14, in line with the National formula for social housing rents. The average rent increase will be 4.36
1.2 That the full cost of services provided to those tenants who receive caretaking, grounds maintenance and bulk refuse collection services are recovered via tenants service charges, this being achieved with a 3.1 increase
1.3 Charges for garage and parking space rents increase by 4.36
1.4 Heating charges for Council tenants remain unchanged, see detailed in Appendix 2
1.5 Recommendation to the Council to approve the budget for the Housing Revenue and Capital Accounts for 2013/14.