Elected Member Briefing - Rent Level Setting for 2023/24

About this briefing note

Report by: Elaine Ritchie, Senior Service Manager, Housing

Date: 27 May 2022

Subject: Rent Level Setting for 2023/24

Responsible Officer: Michelle Dow, Service Manager, Housing

Details

Purpose

The purpose of this briefing is to update Elected Members on our process of setting rent levels for our tenants, and the beginning of the rent setting process for 2023/24.

Briefing information

Background

The Scottish Social Housing Charter sets the standards and outcomes that all social landlords should aim to achieve when performing their housing activities. Outcomes 14 and 15 of the Charter are primarily linked to the rent setting process and the financial aspect/delivery of the Housing Revenue Account. These outcomes reflect a landlord's legal duty to consult tenants on the affordability of rent levels, and to inform tenants about how their rent money is spent.

Discussions with tenants must take place about rent levels, and any decisions made about rent levels should reflect tenants' views.

In response to this, each year in partnership with our tenants we review the rent levels we charge for the Housing Services we provide. These annual reviews ensure that we continue to meet our duties to tenants as a landlord, respond to tenants' priorities and maintain high levels of service delivery. 

Our approach to setting rent levels

Assessing and demonstrating affordability

Perth & Kinross Council's rent levels are currently the fifth lowest in Scotland, remaining lower than the national average. Our rents are also lower than in neighbouring local authorities. We have developed a model which allows us to look at local income levels in Perth and Kinross and, using this information we assess how affordable our rents are. The model also allows us to compare these with other local social housing providers and neighbouring local authorities.

Involving current and future tenants

Our approach to consultation and engagement was shaped by our tenants and provides each tenant with an opportunity to become involved through consultations and conference events. Feedback is also gathered from applicants (future tenants) who have been offered one of our properties on our waiting list.

Each year we provide different rent increase options that tenants can vote on. Each of the options is assessed in relation to affordability and the impact on service delivery and level of investment in tenants' homes.

The current rent strategy has been in place since 2016 and work will be undertaken during this year to review the strategy to ensure it reflects the change in the economic and financial climate. This will need to be discussed with and agreed by the tenants and should be in place during the 24/25 budget setting process.

How we engage with tenants throughout the rent setting process

In partnership with tenants we have agreed a process of engagement that takes place throughout the year, allowing us to work closely with tenants to set rent levels for the following year. This process of engagement fits the ethos of the Working in partnership with communities and our obligations under the Scottish Social Housing Charter (opens new window).

May - A Rent Spending Priorities Survey is sent to each tenant household asking tenants for feedback on how they would like to see their rent money spent on services. This consultation is also available to complete online.

June - A Summer Tenant Conference event is then held to discuss the findings of the consultation, and tenants are asked for further detail on their spending priorities.

June to September - The feedback from tenants is used to formulate different options for rent levels (usually three options), based on what tenants have told us they want, as well as affordability.

September to December - An Autumn Tenant Conference event is held in September/October, where the rent options are discussed with tenants. A further consultation is then sent to every tenant household outlining what the rent level options are, with detail on what each option would mean for the Housing Services we provide. Tenants are asked to vote on their preferred rent level option. 

January/February - The results of the vote on the rent options are included in a paper to the Housing and Social Wellbeing Committee, and elected members use this information to agree on the preferred rent level option, as voted on by tenants.

April - The new agreed rent level comes into effect.

What happened last year?

Using last year as an example, following the process of engagement outlined above, three rent increase options and what they meant for services were presented at our Tenant Autumn Conference in early October 2021. These were:

• Option 1: 3%
• Option 2: 3.5%
• Option 3: 4%

A total of 2,177 tenants responded to the consultation that followed - almost 30% of tenants. This was the biggest ever response to our annual rent level options survey.

A total of 54% of tenants voted for a 3% rent increase. This 3% increase was agreed by Councillors at a meeting of the Housing & Communities Committee in January 2022, and the new rent level came into effect in April 2022.

This year's rent setting process

The first consultation with our tenants on setting our rent level for 2023/24 has now begun.

We have sent every tenant household a copy of our annual Rent Spending Priorities Survey (PDF, 721 KB), which is the first step in working with tenants to set the rent they will pay for next year.

The consultation is also available for tenants to complete online on our Consultation Hub (opens new window).

The results of this consultation will be discussed at the Summer Tenant Conference on Wednesday 22 June where tenants will be asked to give us more detail about what they would like to see their rent money spent on.

We will use this feedback from tenants along with the consultation results to put together at least three rent options for 2023/24 rent levels.

These options will go out for further consultation with all tenants in October as outlined above, before a final rent level is agreed by Housing & Social Wellbeing Committee in January 2023.

We will keep elected members updated at every stage of the rent setting process.