Decision Maker: Cabinet

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Date of Decision: January 28, 2025

Purpose:

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 2025/26 and future years:   1.    An increase of 4% for rents in 2025/26 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 2026/27 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 2.7% for rents in 2025/26 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 2025/26, subject to a detailed further report for decision by the Statutory Deputy City Mayor and Lead Member for Housing and Anti-Poverty   6.    £25k per year for 2 years for a PFI Hardship Fund   7.    Subsidy for gas utilities at Lombardy Court of c£7.4k The Reasons are: ·         The decision to increase rents by the 4% floor and for future increases to be set at RPIX +1% with a 4% floor in 2026/27 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. For 75% of households they will be receiving full or partial HB and UC support. ·         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. ·         The viability of the Housing Revenue Account through to 2043/44 has also had to consider the additional cost implications associated with the Building Safety Act, Consumer Standards and contract expiry costs.  Whilst it is the council’s desire to keep rents as low as possible, we need to prudently manage the Housing Revenue Account which can’t legally go into deficit or be cross subsided as determined by the Local Government & Housing Act 1989. The rent increase is not funding any of the current cladding replacement works.   ·         Pendleton Together and the Council have reviewed the current service charges and have proposed revised charges based upon actual and estimated costs. The cost of services will vary from block to block depending upon services received.  ·         A number of mitigations have been put in place  to ensure residents can maximise their income and access additional support where required.  This includes support from a dedicated Customer Support Officer, access to Together Housings’ Energy Redress scheme, continuation of winter fuel payments whilst high rise blocks remain unclad and a £25k per annum hardship fund ring fenced for PFI residents. ·         In January 2023 the City Mayor and his Cabinet approved a £216,000 hardship fund for the Pendleton PFI housing stock.  This was established in recognition of the impact of the cost of living crisis, to support residents and families in times of crisis.  Since the launch of the fund there have been 521 referrals and 155 successful applications utilising around £55k. In addition, c£139k has been utilised from this fund to subsidise a percentage of the increase in energy costs for communal energy in high rise blocks where they have been adversely impacted by non-domestic tariffs. ·         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 Household Support Fund, Salford Assist, Discretionary Housing Payments, the Council Tax Support Scheme, and partnership working with Salford Credit Union.  These council services are also available to Duchy site residents.   ·         The proposed 2.7% rental increase for Duchy pitch fees is in line with the Retail Price Index as set out in the Mobile Homes Act 1983. Whilst this is the maximum that pitch fees can increase by, this decision must be taken to ensure the long-term financial management of the Duchy Caravan Park along with continued maintenance of the site for the residents who live there.    Assessment of Risk: Low 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:  Jane Barlow, Service Manager Contracts / Grace Rogerson, Senior Accountant Telephone number: Jane Barlow 0161 793 2372 / 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: _30.01.25____________                                                                             City Mayor, Paul Dennett   For Democratic Services use only   This decision was published on   30.01.25                                      This decision will come in force at 4.00 p.m. on 06.02.25                                                   unless it is called-in in accordance with the Decision Making Process Rules.