To consider the attached report that provides an update on the ongoing review of services charges across the District.
The Service Manager (Housing Management & Home Ownership), D Fenton, explained that these charges were for additional tenant services, such as maintenance of lifts and cleaning etc, which were charged separately to the rent, and were taking place across the District. However, this had become challenging as some costs had risen above the rate of CPI. A recent cost analysis had revealed that the Council was in deficit to around £600,000 for 2019/20 through the under recovery of service charges. A report to Cabinet in July 2020 had recommended a review of these service charges. Housing now had a comprehensive list of these additional services and the service charges. Also, the regulations clearly stated that social housing providers needed to charge for services in a fair and consistent way that could be accounted for. This equated to charging the actual cost for the services broken down to each individual property. A final report on the options available to the Council would go to Cabinet in December 2020.
In July 2020, Cabinet recommended the Council’s proposed scheme ‘more than bricks and mortar’ moved to the development stage. This scheme was proposing that additional income raised in the first four years was ringfenced to pay for estate improvements, which would help achieve its mission to ‘create great places where people wanted to live’.
Councillor R Bassett thought that the Council should monitor and phase in the new charges. Taking into account that the Council could have a shortfall of income this financial year of some £4 million because of Covid-19, if additional income was ringfenced for four years this could amount to quite a lot of money. Also, some premises had private owners while others had Council tenants, so this needed to be addressed as the Council should not be subsidising private tenants. The Service Manager replied that the deficit was in the general fund not the Housing Revenue Account (HRA), which was ringfenced for Housing functions. It was a lot of money. However, people should go and look at our estates in relation to places where we want people to live, which would require a huge investment. It was a challenging time to create the right environment for tenants. Regarding leaseholders, this was a huge concern. Although they did pay the actual cost of the service charges, the Council could not charge any additional service charges to leaseholders. For example, if the Council had a block of flats where there was no cleaning service but wanted to introduce cleaning, the Council could not do this for the leaseholders, as the lease did not allow the Council to do this.
Councillor S Heap said that with some leaseholders who were subject to the same charges, the Council might need to think of charging for these services in a ‘pooling’ way and work out what this might be.
Councillor S Murray said it was unfortunate that the service charges review had coincided with the current economic climate on our estates, which had a very mixed tenure. He was a bit concerned that the charges would fall disproportionately on Council tenants rather than private owners, but the biggest concern was the idea of spending the surplus for the next four years on improving the general environment. Once the Council started improving the general environment from the HRA, how would the bulk of the housing stock be included, particularly houses, as most were privately owned? How would the homeowners be included? They would be benefitting from any improvements but how would they be contributing? Was the Council considering a mechanism to charge private owners to also make a financial contribution towards a community environment improvement, which he would like to see? The Service Manager replied that Councillor Murray was right, but the Council could not apportion costs to house owners. Community based projects were the way to go. Some of the Council’s estates did need investment, which would improve the whole area, which was ok, because the Council was not just about specific places but stronger places for all the community. The charges would be subject to the universal credit and housing benefit payments. To help people not receiving these benefits, the Council would be tapering these charges over four years. The improvements would be decided in partnership with officers and as the Council progressed with these improvements hopefully, residents would see that they were getting value for money. These projects would be unique for these communities to help make a difference. Councillor S Murray continued that in some of the Council estates it might be the more articulate people that would be voicing what they wanted, and they might be the people who were not contributing towards them. The Service Manager replied that any scheme proposed would be overseen by the residents committee and she encouraged Councillor Murray to look at the Cabinet paper to see how they were going to be managed.
(1) That the update on the ongoing review of services charges across the District was noted; and
(2) That the development of the Council’s new scheme ‘more than bricks and mortar’ EFDC Creating great places where people want to live’ was noted.