Content

Salford City
Council - Record of Decision (Cabinet)
I, Paul Dennett, City Mayor, in consultation with
the Cabinet and in exercise of the powers contained within the City
Council Constitution do hereby approve:
 
Rent and Service charge Setting
for 2024/25 and future years:
 

1.   
An increase of 6% for rents in 2024/25 for the Pendleton Private
Finance Initiative (PFI) stock
 

2.   
An increase of Retail Price Index excluding Mortgage Interest
(RPIX) +1% with a 4% floor for rents in 2025/26 and future years
for the Pendleton PFI stock
 

3.   
Adjustments to Pendleton Private Finance Initiative (PFI) service
charges in line with the costs of providing those services as detailed in section 3 of
the report
 

4.   
An increase of 8.9% for rents in 2024/25 for the Duchy Caravan
Site, in line with Retail Price Index (RPI)
 

5.   
The implementation of amended service charges to tenants at Duchy
Caravan Site during 2024/25, subject to a detailed further report for decision
by the Lead Member for Housing, Property and
Regeneration
The Reasons
are:

·        
The proposed rent increase for the PFI stock, is set
below the Governments Rent Standard for housing
providers.

·        
The decision to increase rents by 6% and for future
increases to be set at RPIX +1% with a 4% floor in 2025/26 and
future years was not taken lightly but was based on financial
modelling that showed that this option ensured the on-going
viability for the Housing Revenue Account. The PFI management fee
which the council has to pay is linked to RPIX and bringing future
rent increases in line with RPIX helps to ensure financial
viability. A rent freeze was considered as an option,but resulted
in the HRA entering an unlawful deficit over the life of the HRA
Business Plan.

·        
Pendleton Together and the Council have reviewed the
current service charges and have proposed revised charges based
upon actual costs. The actual costs of services will vary from
block to block depending upon services received.  This year the council is proposing to subsidise
communal energy charges for some high rise blocks where they are
locked into significantly higher non-domestic utility
contracts.  The table below identifies
the average service charge per block to show the variation across
blocks.

 

 

·        
Over the last year the country has continued to
experience significant rises in the cost of living. The proposed
rent and service charge increase for 2024/25, has not been taken
lightly given the financial pressures it will place on several
households.  75% of households receiving
full or partial HB and UC support.

·        
The increase is below the maximum being
applied by many housing providers across the country,  which
is 7.7% in line with the Government’s rent standard formula,
reflecting the council’s desire to keep rents as low as
possible while continuing to prudently manage the housing revenue
account which can’t legally go into deficit or be cross
subsidised as determined by the Local Government & Housing Act
1989.

·        
The increase forms an essential part of
the long-term financial management of the council properties,
ensuring their continued maintenance for residents and future
investment requirements in our housing stock, especially given the
new building regulations, fire safety order and regulatory
requirements following the tragic fire at Grenfell Tower, which
claimed 72 people’s lives, injuring over 70 people and
continuing to impact people’s lives and wellbeing today. The
rent increase in not funding any of the current cladding
replacement works.

·        
The council fully appreciates the impacts
of the cost-of-living crisis in the city and all residents and
families within the Pendleton PFI will continue to have access to
the £216,000 Support Fund we established last year, which
remains available to support residents and families in times of
crisis.  So far 98 applicants have been supported through this
fund and eight households have also received Discretionary Housing
Payments (DHP), with almost £3,000 awarded to support
residents and families so far.

·        
Also, residents in unclad high rise
blocks continue to receive winter fuel support payments of
£200 for this current winter. Additional fuel support is
available where it is assessed that this payment is
insufficient.

·        
Tailored advice, support and referrals
are also available from a full-time Customer Outreach Officer and
Customer Support Officer.

·        
In addition to this direct support
offered to Pendleton PFI residents and families, the council
continues to support all our residents and families across the
 city through our work to tackle poverty, including Salford
Assist, Discretionary Housing Payments, the Council Tax Support
Scheme, and partnership working with Salford Credit
Union. 

 

 

 
·        
The proposed 8.9% rental increase for Duchy pitch
fees in line with RPI is a difficult decision that must be taken to
ensure the long-term financial management of the Duchy Caravan Park
(which has been operating with a significant deficit for many
years) along with continued maintenance of the site for the
residents who live there.  The council
is working to make sure that those people affected negatively by
this decision are fully supported by the council’s Welfare
Rights and Debt Advice Service to ensure they receive free,
confidential and independent advice, which will include priority
access to Salford Assist and any other schemes available to support
those affected by the cost of living crisis.
 
Options considered and rejected were:
 
PFI Stock

Rent
Freeze
8.6% increase (in
line with RPIX+1%)

Assessment of Risk:

The rent increase reduces the
financial risk of being unable to balance the long term HRA
business plan.
The source of funding is: Housing Revenue Account
Legal Advice obtained: The Council is required to set a balanced HRA
budget. 
Financial Advice obtained:
The rents and
service charges proposed within this report would be a significant
source of income for the HRA, in line with the HRA requirements the
account cannot go into a deficit, so the proposals are in line with
the requirements of the account.
 
The rent
increase for Duchy Caravan site is vital to ensure the revenue
account doesn’t drop into a further deficit and create
further pressures on the council’s revenue budget in future
years.
Procurement Advice obtained: N/A
HR Advice obtained: N/A
Climate Change Advice obtained:
N/A
The following documents have been used to assist
the decision process: N/A

Contact Officer:  Andrew Leigh, Head of Service Housing Strategy
/ Grace Rogerson, Senior Accountant
Telephone number: Andrew Leigh 0161 793 2155 /
Grace Rogerson 0161 793 2506
(Please delete from the list below any which are
not relevant).

·        
This document records a key decision which was
included in the Council’s Forward Plan

·        
The appropriate scrutiny to call-in the decision is
the Growth and Prosperity Scrutiny Panel     

 

Signed: __Paul
Dennett___________________ Dated: 26.01.24______              
                                             
              
City Mayor, Paul Dennett
 

For Democratic
Services use only

 

This
decision was published on 26.01.24                                       

This
decision will come in force at 4.00 p.m. on 02.02.24                   
                              
unless it is called-in in
accordance with the Decision Making Process
Rules.