BOROUGH OF POOLE – HOUSING REVENUE ACCOUNT
COMMUNAL HEATING AND LIGHTING
1. BACKGROUND
1.1 Since the HRA has been in operation the costs of electricity and gas for heating and lighting have been “ring fenced” and charges made to tenants to recover the costs of the utility payments. It is recommended good practice to periodically review this recovery framework to ensure charges remain fit for purpose and can be considered fair and reasonable.
Heating & lighting charges have been the subject of a review since 2009/10 when in setting those charges it became evident that the charging mechanism needed to be reviewed because only tenants provided with heating via the District Heating system (communal heating and hot water supplies) contribute. It was also established that a significant number of other tenants benefit from light, power and/or heated communal facilities, but do not receive district heating, and so do not currently contribute towards those utility costs.
1.2 Decent Homes investment in the last four years has meant that 180 tenants no longer pay a heating and hot water charge as part of their rent because they now have individual heating systems.
1.3 In addition, the HRA is picking up costs for communal heating and lighting that should be met by those residents living in the blocks that receive the service.
2. PROPOSALS
2.1 It is now proposed to break down the current heating charge into two separate charges:
· an individual heating charge for those in the District Heating system, and
· a communal utility charge for all tenants who benefit from communal facilities whether in the District Heating system or not
For those in the District Heating system, the charge for individual heating will be calculated on the basis of the number of bedrooms, starting with a base figure for a 1 bedroom property and then a small pro rata increase for each extra bedroom. It is proposed to do this not on a scheme-by-scheme basis, but as a standard charge across all schemes. This is because a number of schemes in sunnier positions now have the benefit of solar panels, which significantly reduce the energy use and therefore the costs. It is felt that these reductions should be shared across the Borough and not purely for those individual blocks or properties. This would seem to be the fairest way of sharing this benefit.
For other tenants who benefit from communal services, charges will be tailored to the facilities they benefit from (corridor lighting, heated corridors, lounges and other amenities as applicable). Again there will be standard charges for each facility to spread the benefit of energy improvements across the Borough.
2.2 Through this intensive piece of work 1,800 tenants have been identified to pay the proposed new communal utility charge. The charges will range between £1.41 and £4.98 per week (based on charging for 48 weeks and dependant on amenities); the majority of the charges are between £1.41 and £2.49. It has been confirmed that, unlike the heating charge, this utility charge would be allowable for Housing Benefit purposes. Sub-dividing the utility costs in this way should therefore assist in addressing fuel poverty.
2.3 Some examples of current and new charges have been appended in B2 for information.
2.4 The new Charging Policy will be subject to an Equality Impact Assessment to ensure effective consultation is undertaken and all residents’ needs are considered.
3. TIMESCALE
3.1 The revised heating charges should take effect from the first rent week in 2010/11; 5th April 2010.
The new charges for those tenants who are not contributing to the cost of shared communal heating, lighting and electricity use should also start in April 2010. However, this will need to be investigated to ensure this can be done in the time remaining. Further details would be provided when the position is clearer.
4. CONCLUSION
4.1 As with all types of charging or cost recovery mechanisms they do require reviewing to ensure that they are still “fit for purpose”, fair and reasonable.
4.2 It is evident that the current system for recovering utility costs from tenants does now need to be revised to ensure that everyone is treated fairly and making the contribution that is reasonable.
4.3 It is therefore proposed that this new charging policy is adopted.
APPENDIX F