Agenda item

RESOLVED: that the Committee would refer its views to the Mayor & Cabinet as follows –

·         The Committee believed that it was inequitable to charge one group of social tenants an increase below inflation (Lewisham Homes) and the other not (Regenter B3).

·         The Committee recommends to Mayor & Cabinet that they look again at the proposal to pass on in full the service charge increase in line with RPIX + 1% for Regenter B3 tenants. This recommendation is made in the full knowledge that there are financial limitations and that the Council needs to ensure the HRA is not in deficit, but the Committee asks Mayor & Cabinet to look at this again and see if some dispensation can be made to assist RB3 tenants given the Cost-of-Living crisis.

Fenella Beckman (Director of Housing Services) introduced the report. The following key points were noted:

4.1. The rent and service charge increases were as follows: a 7% rent increase for both Regenter B3 and Lewisham Homes; a 7% increase in service, heating & hot water charges for Lewisham Homes and a 13.6% increase for Regenter B3; a 10% increase to garage rents. There were no proposals to vary the current levy for the Tenants’ Fund contribution so those remained the same.

4.1. Engagement meeting with residents & leaseholders from Lewisham Homes and RB3 took place during December 2022. These meetings provided residents a chance to engage directly with the service managers to raise their concerns and give feedback on the services they receive.

4.1. Detailed feedback was received from residents at these engagement meetings. Response to their comments would be drafted by officers and sent to the residents, circulated to the members of this Committee as well as shared with the Mayor & Cabinet when they consider this report.

The Committee decided to ask questions to Lewisham Homes first, followed by Regenter B3. In their discussion with Lewisham Homes, the following key points were noted:

4.1. The proportion of tenants claiming housing benefits was around 53% but it was discussed that with Universal Credit being directly paid to residents, it was difficult to gauge the actual number of residents receiving full benefits.

4.1. There was an increase in rent arrears during Covid as there was a lack of legal action.

4.1. Since last April, the welfare benefit team at Lewisham Homes had helped over 1600 residents successfully claim £830,000 of additional Universal Credit and Housing Benefit.

4.1. Lewisham Homes did a lot of work with the Trussell Trust and provided around 20 residents with £49 vouchers. These were mostly people who had pre-paid meters as it was especially difficult to provide them with any other support around fuel prices.

4.1. Even though the percentage point increase in service charge for Lewisham Homes (7%) was lower than that of Regenter B3 (13.6%), in terms of actual price increase, Lewisham Homes costs were still higher. This was due to the fact that Regenter B3 followed a different service model- they employed people directly but did not have to pay similar on-costs as Lewisham Homes (for example, pension costs and pay award were significantly higher for Lewisham Homes). Lewisham Homes also ran a 7-day service which incurred a higher cost.

4.1. Lewisham Homes would have a discussion with Council officers about including the support offer for tenants and leaseholders on the back of the rent letters.

In the Committee’s discussion with Regenter B3, the following key points were noted:

4.1. Regenter B3 (RB3) had an in-house welfare adviser to provide tenants with an intensive housing support and advice service. The in-house adviser was also conducting energy workshops to provide advice on energy bills, discounts and saving tips. They were also signposting residents to online resources such as StepChange, Debt advice, National Debtline and making sure that residents were aware of local schemes and initiatives. RB3 were also looking to commence monthly rent and welfare surgeries.

4.1. The Council’s contract with RB3 was based on RPIX. The RPIX data was not released at the time that these service charge increases needed to be decided, therefore these rates needed to be estimated. These estimates were fairly accurate and had been the method of choice for deciding these increases over last few years. The high estimates avoid massive changes to the bill when adjustments need to be made post-audit.

4.1. Tenants and leaseholders were never charged more than the actual cost of service provided. These service charges were reviewed annual by independent external auditors. If the actual costs for the service turned out to be lower than the estimates then the residents would see that come through as an adjustment to their account.

4.1. The contract with RB3 stated that they needed to maintain full-cost recovery. After that it was up to the Council whether they decided to accept the recommendations made by RB3. However, the Council had to consider the consequences of setting a lower rate as that would put the HRA in deficit and the Council was legally required to set a balanced budget.

4.1. According to legislation, residents have a right to be informed of any fundamental changes in housing management including increases in rent and other charges. The engagement sessions with tenants and leaseholders were called consultations but the Committee thought that it was misleading to call them consultations when residents had minimal or no power to influence the decisions.

4.1. A member of the public was invited to address the Committee who queried if any changes had been made to the rent & service charge increase proposals after resident engagement. They stated that tenants and leaseholders didn’t understand the basis of the RPIX formula and why it was baked into the contract.

4.1. Officers confirmed that proposals weren’t changed following engagement with residents since charging at a lower rate would put the HRA in deficit and the Council was legally required to set a balanced budget. They also added that in the future they would be asking RB3 to provide more information in the proposal reports about how the costs were broken down.

4.1. Regenter B3’s annual report would also be added as a substantive item to the committee’s work programme.

RESOLVED: that the Committee would refer its views to the Mayor & Cabinet as follows –

·         The Committee believed that it was inequitable to charge one group of social tenants an increase below inflation (Lewisham Homes) and the other not (Regenter B3).

·         The Committee recommends to Mayor & Cabinet that they look again at the proposal to pass on in full the service charge increase in line with RPIX + 1% for Regenter B3 tenants. This recommendation is made in the full knowledge that there are financial limitations and that the Council needs to ensure the HRA is not in deficit, but the Committee asks Mayor & Cabinet to look at this again and see if some dispensation can be made to assist RB3 tenants given the Cost-of-Living crisis.