Housing Revenue Account budget consultation 2023/24
Canterbury City Council will set its budget for 2023/24 on 22 February 2023.
This consultation asked for your views on proposals for the Housing Revenue Account (HRA) budget. It closed on Monday 9 January. All feedback will be taken into account when councillors meet to agree the budget.
The HRA is funded from the rent and service charges we collect from more than 5,000 homes we own and manage.
HRA money can only be spent on services for council tenants and leaseholders.
It is a ring-fenced account and separate from the council’s main day-to-day spending budget (the General Fund).
We are consulting separately on proposals for the General Fund budget, you can read about those proposals and respond to the General Fund budget consultation.
The HRA is under considerable financial pressure. This is mainly because:
- extra spending is needed for repairs and maintenance
- more people are struggling to pay their rent which reduces the amount of money coming in
Considering this, we need to make savings and generate extra income to make sure we can continue to provide services to our tenants and leaseholders.
Rent increase
Government policy says the council can increase rent by CPI (the Consumer Prices Index) + 1%, based on the CPI rate in September 2022.
CPI is one way of measuring inflation or how much day-to-day living costs are going up such as the price of a loaf of bread or a pint of milk.
The CPI rate in September 2022 was 10.1%, meaning rent would increase by 11.1%. The council can agree a lower increase if it thinks 11.1% would be unaffordable to tenants.
The government has been asking for views on its proposal to restrict the rent increase to either 3%, 5% or 7% to limit the impact on tenants. The government has not yet decided on the way forward, but their preferred option appears to be 5%.
The council understands the pressure of rising costs on households as it is facing similar problems itself. For example, gas and electricity bills in properties with communal heating and lighting are expected to rise by about 50% and the prices of some new maintenance contracts are up to 30% higher.
The lower the rent increase, the more difficult it will be for the council to afford to provide a good basic standard of repairs, maintenance and other services.
What this might mean for tenants:
The impact of any increase will be limited for the 75% of our tenants who are eligible for Housing Benefit or Universal Credit.
Service charges increase
Some tenants also have to pay service charges for specific things. This is usually for communal facilities in blocks of flats such as heating, lighting and cleaning and the charges are usually fairly small.
For 2023/24 we are proposing to increase service charges to either recover the actual cost of providing the services where these are known, or by 5%, whichever is lower.
Garage rent increase
The garages the council lets out are part of the Housing Revenue Account.
The council increased garage rents in 2022/23 but the standard garage rent remains the lowest in East Kent among councils and private landlords. Council garages are being re-let and there is strong demand.
We are therefore proposing to increase garage rents by CPI + 1% (so 11.1% in total).
The weekly rent of a standard garage would increase from £11.00 per week to £12.22 per
week, and in Crown Gardens from £13.55 per week to £15.05 per week.
By law, the council has to charge VAT on top of the rent to people who rent our garages but are not council housing tenants.
You can see full details of all the proposals in the following documents:
Draft Housing Revenue Account Budget – Cabinet report
Published: 11 November 2022