Chesterfield council expects ‘£4m’ income boost as it aims to increase housing rent and some service charges

The Labour-led authority’s cabinet approved new social housing rents and service charge levels for heating, garages and other services during a cabinet meeting on Tuesday, January 16, and they are to be introduced at the beginning of the financial year from April 1, 2024.

This will mean an average ‘social’ rent in 2024/25 of £95.95 per week and an average ‘affordable’ rent of £108.88 per week for council tenants across the borough.

And changes to service charges when added to the estimated income from rent of £3.974m could mean an estimated, overall additional income of £4,050,087 for the council in 2024/25 compared to 2023/24.

A council spokesperson stated: “Social rents are set according to the Government’s National Social Rent policy and the Welfare Reform and Work Act 2016.

“In accordance with the Government’s National Social Rent Policy, which came into effect from April 1, 2020, rents may increase by up to Consumer Price Inflation plus one per cent, until April 1, 2024.

“The basis for annual rent increases is the September Consumer Price Inflation which in 2023 [was] 6.7per cent, meaning the maximum rent increase projected for April, 2024, should be 7.7per cent.”

The CPI used by the council and local authorities is the figure and measure based on the average change over time in prices paid by consumers for goods and services.

Chesterfield Borough Council’s cabinet also approved that when a social rent property is re-let to a new or transferring tenant the rent level will be increased to the new target rent for that property and that individual affordable rents have been based on the current national social rent policy giving a cash rent increase of 7.7per cent with effect from April 1, 2024.

It also approved that when an affordable rent property – delivered through the Affordable Homes Programme – is re-let to a new or transferring tenant the rent level will be set by reference to 80per cent of the market rent including service charges where applicable for a similar property at the time of letting.

A council spokesperson added: “In line with the Government’s National Social Rent Policy and the RSH Rent Standard, it is recommended that for 2024/25 all rents – social and affordable – will increase by CPI plus one per cent.

“This is a real increase of 7.7per cent in 2024/25 based on [the] CPI in September, 2023, of 6.7per cent.

“This gives an average social rent in 2024/25 of £95.95 per week and an average affordable rent of £108.88 per week.”

The council stated in its report that the Government has increased the ‘target rent’ by 7.7per cent for 2024/25 after the council’s average affordable target rent in 2023/24 was £101.09 per week and it will become £108.88 per week.

A council spokesperson added: “The financial implications are an intrinsic element of this report. The recommendation that all Chesterfield Borough Council ‘general needs’ rents – social and affordable – will increase by 7.7per cent and a 53-week rent year will result in an additional £3.974m of income in 2024/25 compared to 2023/24.”

Chesterfield Borough Council’s cabinet also examined heating charges, garage rents, garage site rents, the garden assistance scheme, water charges, community room charges and warden services among its review of services in the report.

It stated that concerning service charges, the cost of energy has stabilised so the cost of providing heating through the ‘older person scheme’ has remained unchanged so heating is expected to remain at 2023/24 levels.

But the council expects to bring in a total income of just over £4m from rent increases and other services including garages, water charges, garden assistance, communal staircase cleaning, and from its sheltered scheme.

Income streams from both garage rents and garage site leases currently cover expenditure and create a surplus for investing in housing management services, according to the council.

The report also explained that apart from some of the sheltered schemes, the water charges are no longer collected on behalf of Severn Trent, so for the remaining properties where charges are collected a charge of £3.70 per week is expected to increase to £3.89 per week.

Also, for gardens, the contract price will increase in April 2024 by 8.06per cent but it has been proposed that this increase will be passed onto all paying clients.

The council housing services, which manage two community rooms at Wimbourne Crescent, and Winster Court, at Newland Dale, for hire, are expected to amend the charge for the community room to a fixed price of £5per hour for a minimum of two hours.

For communal staircase cleaning, the weekly charge to tenants is expected to increase by 25pence per week from April 1, 2024, increasing the charge from £2.51 to £2.76 per week.

An increase for the sheltered scheme service of 30pence per week from £15.59 to £15.89 per week is expected to ensure the charge recovers costs.

A council spokesperson stated: “The service charges are increased at a rate to cover the cost incurred in providing that service.

“This means that increases can vary more widely. The changes in the service charges when added to rents will bring in an additional £4,050,087 in 2024/25 compared to 2023/24.”

The council’s Housing Revenue Account faces major challenges over the coming years, according to the council, particularly in relation to delivering new affordable council homes and investing in stock to ensure high quality homes, meet climate change ambitions.

There is also a need to invest in staff resources and meet new Social Housing Regulator standards, according to the council, so the cost of delivering investment in its housing stock has increased in line with inflation.

Chesterfield Borough Council has been working hard towards balancing a forecast £4m budget deficit for 2024/25 after it has stated that it is facing serious funding gaps due to the Covid-19 pandemic, the cost of living crisis and inflation rates like many other authorities.