Agenda item

That the Committee request that Cabinet consider spreading the proposed increases over a longer period of time to lessen the financial impact on Council tenants.

The Chief Officer (Housing & Communities) gave an overview on the Councils current position with regards to Communal Heating Charges, reporting that the portfolio currently operated eight communal heating schemes within Flintshire, with 417 properties on communal heating systems.  The Council had recently renegotiated the fuel tariff to be charges for 2023/24 as the previous contract ended in March 2023.

 New communal heating charges were based on the prior year’s energy use which ensured an accurate assessment of costs and impacts on the heating reserve account.  In order to recover the projected heating charges in full, there was a need to increase communal heating charges in line with the tariff increases.  The proposed recharges for 2023/24 were set out within the report.

The Strategic Finance Manager – Commercial & Housing reported that if the Council continued to calculate the charge in the same way as previous years, tenants who were on the Communal Heating systems would be subject to increases of up to 515%, based on the newly agreed gas tariff.  This was higher than the overall tariff increase of 420% as the revised communal charges came into effect from tenants from 31 July, 2023.  Work had been undertaken to shield tenants from the potential increase and therefore the proposed average increase to tenants was 197%.  This would mean that there would be a deficit remaining on the heating reserve of approximately £0.080m at the end of 2023/24 which would need to be recovered in future years as utilities prices recovered and stabilised.

Councillor Bernie Attridge said that he had sent questions ahead of the meeting to officers, as had the Leader of the Council as he was concerned over the proposed increase and said that he could not support such an increase to tenants at the current time.  He referred to officer comments around equity for all tenants but said that an argument could be made that tenants were subsiding those that were in rent arrears or damaged their properties before them becoming voids.  He said that he would like to see the costs being recovered over a longer period of time which had been done in the past and said that the majority of the tenants he represented in the two schemes listed in the report were vulnerable and were not able to claim for financial assistance as they were just above the threshold.  He hoped the Committee supported him in not supporting the increase.

            The Chief Officer referred to the e-mail exchange with Councillor Attridge and said that the Council aimed for full cost recovery on rent also, and were very proactive around this, as would be demonstrated in the report to the Committee at its next meeting.  She explained that the Council was passporting the charge from utility companies and had tried to mitigate the scale of the increase to tenants as shown in the report.  She referred to a decision in previous years to defer cost recovery over a three year period, but this had been reversed to a two year period which was what was being proposed now.  Tenants had been protected to some degree from the increases to date, but the Council could not control global markets, but the Council was trying to mitigate the amount of increase tenants would experience.

            Councillor Attridge responded that it had been a political decision to spread the cost recovery over a three year period.  He referred to the Housing Revenue Account (HRA) which, he said, always had surplus at the end of the financial year and asked whether this could be used to bring down the proposed increase costs to tenants.  The Strategic Finance Manager reported that in 2017 it was proposed that cost recovery be over a three year period, but it became evident after one year that the increases were impacting significantly on the heating account and a decision was made to reduce the number of years to two.  Heating charges were always required to be fully cost recovered within the HRA, which was stipulated within the guidelines, and it was difficult to spread cost recovery over a longer period of time as gas prices continued to be volatile.  The Chief Officer referred to the Committee to a previous decision taken, and supported by Cabinet, that any surplus within the HRA for 2023/24 be used towards brining down the number of void properties.

            Councillor David Evans asked how the usage of communal areas would be calculated.  The Service Manager - Housing Assets advised that work would commence on metering individual properties across the County with metres being installed in all communal areas also, in order to identify what the usage was.  Work would also be undertaken to install energy efficient control measures over the next 12 months.    

            In response to a question from Councillor Linda Thew around the installation of solar panels, the Service Manager that the installation of solar panels would be considered when heating systems were due for renewal.      

            Councillor Geoff Collett thanked officers for their efforts in reducing the increase as much as possible.  He asked if tenants fell behind on their payments on heating charges would this be considered in line with rent payments and could tenants be evicted.  The Chief Officer advised that service charges were distinct from rent in tenants’ payments.

            Councillor Attridge commented on communal areas being used by groups, others than tenants, for events such as coffee morning and bingo and asked why tenants should be paying for the energy used in the communal areas if they were not participating.  The Chief Officer advised that service charges to tenants had remained frozen, but heating charges was a service charge being passported by utility companies.  Tenants were being charged for their usage, and they were not being charged for the usage in communal areas.   

            Councillor Kevin Rush asked if the Council were planning to introduce measures to combat heat loss in communal areas.  The Service Manager advised that during a review of the communal central heating systems the implementation of further controls to improve energy efficiency would be considered.

            The Chair outlined the recommendation contained within the report.  Councillor Attridge moved an amendment, which was seconded by Councillor Thew, as follows:-

• That the Committee request that Cabinet consider spreading the proposed increases over a longer period of time to lessen the financial impact on Council tenants.

When put to the vote, the amendment was carried.

RESOLVED:

That the Committee request that Cabinet consider spreading the proposed increases over a longer period of time to lessen the financial impact on Council tenants.