SHEFFIELD’S 42,000 council tenants face rent rises for the next five years under plans approved by councillors - who passed an above-inflation increase for the coming year, writes Richard Marsden.
Rent rises are needed to ensure running costs are covered, as well as providing funding for repairs and maintenance, construction of some new homes, and debt repayment.
A ‘black hole’ of £30 million in the repairs budget will also be resolved.
Under the Housing Revenue Account Business Plan for the next five years, rents for homes and garages will go up by 4.8 per cent in 2013/14, while heating bills for 6,000 homes connected to the District Heating system will rise five per cent.
The average rent rise per household is £3.23 per week over the next 12 months.
In the report to councillors, housing officers said the plan ‘allows for continuation of services to tenants, repairs to properties and also financial support for the council housing investment programme’.
Officials said increases are in line with rent rises nationally, and that if no increase is made ‘savings would need to be identified from services or investment’.
But the increase was met with dismay by tenants’ and residents’ associations.
Stephen Rich, of Greenhill and Bradway TARA, said: “Tenants feel they are being hit in numerous ways. The bedroom tax and benefit changes are coming, now we have this news from the council about rents and heating bills.”
Coun Harry Harpham, cabinet member for housing, said: “Although there will be an impact on tenants in terms of rent rises, we think it is a good, sustainable plan which allows us to meet the cost of repairs and investments, and deal with the funding black hole.”
The business plan, approved at a full council meeting, sets out plans to continue raising rents up to 2017/18.
Increases of 4.5 per cent in 2014/15, 4.8 per cent in 2015/16, three per cent in 2016/17 and 2.9 per cent in 2017/18 are proposed.
The extra rent is needed to meet the Government’s target for council rents - which have historically been low - to converge with rents charged by housing associations and to ensure running costs are covered.
Sheffield Council used to benefit from a national funding system, through which it received a subsidy in recent years, but it is now having to cover all housing costs itself.
Last month, The Star reported a black hole of almost £30m in finance for a £229m repairs backlog.
The total repairs budget for the period up to 2017/18 is £202m.
But extra income from increased rent will cover the shortfall as well as allowing a further £28m of investment in existing homes, plus £9.5m for construction of 75 new homes.
The council proposes to pay off part of £346m of housing debts from Decent Homes repairs during the 2013/14 to 2017/18 period but does not predict the sum will be cleared until 2027.
The increase in heating bills, equivalent to £35 a year, was criticised by opposition Liberal Democrat councillors.
The party argued that charges should rise by only one per cent, in line with benefit increases, because planned investment in the heating systems and introduction of meters will bring down costs in future years.
Coun Penny Baker, Lib Dem housing spokeswoman, said: “We understand tough decisions need to be made but protecting tenants for hikes in heating charges seems more important than, for example, publicity campaigns asking the community not to fly-tip.”
Coun Harpham said: “Our increase compares with hikes of up to 11 per cent by private energy companies. To keep the rise lower would mean the council providing a subsidy.”
Council house rents in Barnsley will be increased by 5.8 per cent - an average of £4.06 per week - in 2013/14, while Rotherham’s rents are rising by 6.19 per cent, or £4.30 per week on average.