Budget proposals for the 2011/12 Housing Revenue Account [HRA] and the Housing Capital Account have been approved by Aberdeen city councillors.

This enables the setting of the rent level for the financial year 2011/12, provisional rent levels for financial years 2012/13 and 2013/14, and in turn a capital programme for 2011/12 to be set as well as a provisional programme for 2012/13 and 2013/14.

In line with previous years the Council sought the views of its tenants as to whether maintaining the Rent Policy at inflation plus 1% was still appropriate. The majority of responders agreed with maintaining this policy which would have meant a rent increase of 5.7% for 2011/2012.

During the current economic climate many families would find a rent increase of 5.7% difficult therefore the Rent Policy of inflation + 1% so this year an inflation only increase of 4.7% was put forward.

The Housing and Environment Convener Aileen Malone advised Council that she has asked the Director of Housing and Environment to find the 1% loss through a reduction in cost base within the management and administration budget. A report with detailed proposals of these savings will go before the Housing and Environment Committee on 10th May.

In setting a three year rent strategy the Council had to consider the level of capital investment required in order to continue to improve the overall housing conditions in Aberdeen, and to sustain the New Build Programme, and to ensure that there is sufficient contribution to support the housing capital programme over the long term.

Officers are currently developing a new 30 year business plan which will be considered by the Housing and Environment Committee later this year [summer 2011].

A heating charge increase for the Council's Heat with Rent properties of 16%, which will still represent good value for the residents, will be phased in:


* 40p per week for bedsits;

* 50p per week for 1 bedroomed dwellings;

* 60p per week for 2 bedroomed dwellings;

* 70p per week for 3 bedroomed dwellings across all the Council's Heat with Rent properties in 2011/2012.

To ensure that the Council can deliver the priorities for its housing stock and tenants it was proposed that the budget includes a revenue contribution to the Housing Capital programme for 2011/12 of £13.561 million and indicative levels of £15.234 million for 2012/13 and £13.926 million for 2013/14.

This combined with additional borrowing means that the level of capital investment will be

* £56.812 million for 2011/12;

* an indicative level of £44.694 million for 2012/13;

* and an indicative level of £49.295 million for 2013/14.

In addition it was agreed that working balances should be maintained at 5% of gross expenditure with a minimum balance of £3.77million for 2011/12.

The Housing Management Service modernisation program will continue through the coming year and beyond to deliver real benefits for tenants, the council, and staff through:

* Improved rent arrears performance;

* better management of voids;

* an increase in support for tenants to help them sustain their tenancy;

* a revised allocations policy, including a more effective selection process;

* increased support for tenants applying with medical issues;

* a more rigorous and transparent anti-social behaviour policy;

* increased performance in responding to tenant complaints.

The Housing and Environment Convener highlighted the significant commitment to improving the operations and delivery of the Council's homeless service.

The primary concern is to ensure that the homes of all council tenants meet the Scottish Housing Quality Standard [SHQS] by 2015. During 2010 the council achieved its target of 48%, and by the end of the next financial year it aims to achieve 59%.

During 2011/12 the council will continue to make provision to provide high efficiency low carbon emission gas fired combined heat and power schemes for 7 high rise blocks in the Seaton area.

This coming financial year will also see nearly 1000 homes have improved heating systems. These measures will lead to another step change in the average national home energy rating of the Council's housing stock - currently the average is 7.2 - well above the present SHQS minimum of 5.

This is an ambitious and challenging capital programme that will produce great benefits for council tenants.

During the next financial year the Council will complete the construction of phase 1 of its New Build Programme and will continue phases 2 & 3. These are the first new mainstream council houses for over 30 years within Aberdeen City. The Council successfully obtained grant assistance from the Scottish Government for the construction of 66 units for phases 2 & 3 which amounts to £1.805 million.

Housing and Environment Committee Convener Aileen Malone said: "Housing investment and service remain a priority for the Council and sustaining a sound financial basis for delivering its Housing Landlord responsibilities and objectives are essential.

"In recent years this investment has allowed us to provide our tenants with warm modern homes and has created and sustained employment in the construction and manufacturing industry both in Aberdeen and throughout the country.

"This budget will enable the council to continue to raise the standards across the city. If will accelerate our housing service modernization, our housing investment programme and increase the provision of new affordable housing in Aberdeen."

(GK)