By Matt Jarram, Local Democracy Reporter
Nottingham City Council is planning to increase rents for council homes by four per cent to generate an extra £3.6m a year.
There are just over 25,000 council house properties in Nottingham, which are managed by Nottingham City Homes.
The Labour-led council is proposing to increase rents by 4.1 per cent, in line with many other local authorities.
It said the rise was needed to cope with increasing costs and to pay for more new council homes to be built.
But one opposition councillor said it was “just another hit” for household budgets, adding householders would want reassurances the money would be properly spent.
Cllr Linda Woodings (Lab), portfolio holder for housing at the council, said: “We understand that some council tenants, whose rents are not covered by housing support or universal credit, will be concerned about the increase, which is in line with the Government’s recommendations.
“However, we are still losing more homes through right to buy than we can replace with new ones and with increasing construction, maintenance and material costs following Brexit and the pandemic, we are facing growing financial challenges.
“Therefore, we have to increase rents in line with the guidance in order to be able to meet all of our long-term costs. Social rents remain well below market rents.
“Not increasing the rent would have a damaging impact on the council’s ability to build new homes and make energy efficient improvements, creating warmer homes, which ultimately will help to lower or lessen the impact of increasing fuel bills.”
It comes at a time when the Labour-run authority needs to pay back more than £15m of unlawfully used cash which should have been spent on housing tenants.
The council was handed an extremely rare Section 114 notice at the end of last year.
Ringfenced funds to the tune of £15.86m from the council’s Housing Revenue Account – which should have been spent on things such as housing repairs – were incorrectly credited to the General Fund for all council services.
This had happened since 2014/15 and needs to be paid back.
But the council is also due to invest £230m in its housing stock over a five year period, with more than 300 new council homes planned in places like Bestwood and Clifton.
The report prepared for the council’s Executive Board on February 22 states: “The largest challenge facing the Housing Revenue Account is the need to improve the energy efficiency of homes – over 5,000 homes that are uninsulated – whilst contributing to carbon neutral requirements (replacement of 19,000 gas boilers).
“Whilst neither of these are yet subject to regulatory requirements, legislation is anticipated.
“The cost of the required investment is thought to be in the region of £500m in the next 10 years if all properties are brought up to the energy efficiency standard and are converted to heating that is carbon neutral.
“Whilst some of this cost may already be funded from the Major Repairs Reserve there will be costs over and above the reserve.”
Talking about paying back the unlawful funds, the council says it “cannot make payment back” to the Housing Revenue Account until a direction is received from the government’s Department for Levelling Up, Housing and Communities.
Such a payment would be unlawful unless Government ‘direct’ otherwise. This money is due to come out of council reserves.
Cllr Andrew Rule, leader of the Conservative opposition group at the council, said: “This rent rise will just be another hit on the cost of living for tenants.
“They will want to know what benefit they will receive from this increase and it will not be unlawfully spent as has been the practice for near enough seven years.”
