Rent increases to be considered for council housing tenants in Clackmannanshire

Clackmannanshire councillors are set to consider the increase at a meeting next Thursday when they set the 2024/25 Housing Revenue Account (HRA) budget.

The proposed 6.7% hike would increase the average council rent from £80.23 in 2023/24 to £85.62 per week.

Anything less than that would lead to a serious and unacceptable budget gap as well as higher rent increases in future years, according to the Council’s administration.

“A rent freeze would lead to a deficit position of £26 million which would not be financially viable and a budget could not be set on this basis,” a report said. “A rent increase of 5.7% would result in a loss of available capital funded from Current Revenue (CFCR) of £18 million.”

The HRA is responsible for the management and maintenance of council-owned housing, and each year the council must set a balanced HRA budget.

Like other local authorities across the country, Clackmannanshire HRA budget is “under considerable financial pressure and faces a high level of financial risk.”

Ongoing economic uncertainty, rising inflation, and increased service costs are all part of the problems. Construction costs have also remained high post-pandemic, and an “acute and sustained” increase in homelessness is adding strain to existing council resources.

Amongst other things, the recent public sector pay awards are also higher than in previous years and are expected to rise again. The HRA must pay its staff, but it receives no government funding for salaries, which puts more pressure on service.

“Further challenges include the impact of RAAC, updated energy efficiency standards and higher costs associated with additional new build projects. These challenges will require a significant focus to ensure rent affordability in future years,” the report said.

“The proposed 6.7% rent increase this year, and those proposed for future years supports financial stability, and allows the service to deliver the Capital Plan as agreed.”

With a starting gap of £26 million, a rent freeze for 2024/25 was never really on the table, and council tenants were consulted about increases of 5.7%, 6.7% and 7.7%.

Only 9% responded to the survey, but 55% of them agreed that a 6.7% rent increase would in fact be appropriate.

Clackmannanshire Tenants and Residents Federation (CTRF) was also consulted. Although they “acknowledged the multifaceted considerations” that influence decisions on rent increases, they expressed concerns about putting more pressure on tenants who are “already navigating financial challenges.”

“We look forward to working with the Council in reviewing wider corporate charges and housing staff time allocation to ensure we are fully receiving value for money for each pound of tenants rent provided, as part of upcoming scrutiny activity,” the group stated.

“This will ensure that costs are minimised to help keep rents affordable going forward.”

The council will consider the report at a full council meeting on Thursday, February 1. They will be asked to set the 2024/25 HRA Budget and make a decision on the proposed rent rise.