Rent increase consultation for 2017/18
Jan 27, 2017
Proposed rent increase
A message from the Chairman - David McMillan
Members of DGHP’s Board of Management are currently considering a rent increase of 3.75% for 2017/18. As previously agreed, this is based on the September RPI figure of 2% (which is published in October) plus 1.75%.
This works out at approximately £2.65 per week, on average, for 2017/18. We realise that any increase in rents will affect tenants’ finances. However, our costs are also rising and DGHP’s Business Plan is based on our rents going up by RPI plus 1.75% each year.
It’s important to note that our rents remain among the lowest in the country and we are always doing our very best to keep them as low as possible.
Why does there need to be a rent increase?
As previously agreed with tenants, DGHP needs to increase rents by RPI plus 1.75% in order to continue to meet our promises made to our tenants and we remain committed to that. We have made a number of savings this year as a result of our organisational restructure, however, the financial impact of those won’t be felt until at least 2018.Therefore, if we are to continue to maintain all of the current services we deliver, the rent would have to go up by more than 3.75% (it would need to go up a further 0.25%).
We don’t want to do this so to keep it at 3.75% (RPI of 2% plus 1.75%) some decisions need to be made on cost savings.
What will the money from the rent increase be used for?
The money from the rent increase goes directly back into services delivered to our tenants. We have achieved the Scottish Housing Quality Standard (SHQS) but we need to make sure we maintain our properties to this standard. It is also vital that our business plan remains viable.To be absolutely clear, the money will not be going on staff salary increases - our staff have only received salary increases in line with local government guidance that we have followed since stock transfer.
A number of savings had been made following last year’s rent increase consultation,as a result of the choices you made, which included - a reduction in attendance at conferences for staff, Board and DMC members; a reduction in advertising costs; reduced support for charitable ventures; reducing our tenant conference to every three years; a review of our staff car allowance and the progression of issuing our AGM papers electronically.
In addition, further savings have been identified by our Executive ManagementTeam - and supported by our tenant members on our District Management Committees (DMCs).
A saving of almost £50,000 has been identified as a result of a reduction in costs associated with the end of Right to Buy (RTB). Also we have saved around £20,000 on reducing some office costs and health and safety costs.The remaining potential savings are set out in consultation document you received or on the online survey here.
We want you to go through the list and tell us the ones you want us to prioritise this year to help keep the rents at an increase of 3.75%. DGHP is always looking at value for moneyand if you’d like to know more about how DGHP provides you with cost effective services, click here.
What is the proposed rent increasefigure of 3.75% based on?
This is based on the Retail Price Index (RPI) figure for September (published in October) of 2% plus 1.75% - working out at 3.75% - an average of £2.65 per week. Our Board must ensure that, through our Business Plan, we can continue to carry out the promises we made to you during the consultation on the Scottish Housing QualityStandard (SHQS). We will continue to invest in your homes, deliver excellent customer service to you as well as ensuring your homes are managed and maintained to a high standard and kept in good repair throughout the year.
Each year, DGHP spends the rent income on delivering services to our 10,300 tenants –services that you have told us you want.The money is spent on carrying out repairs and improvements to your homes. You have told us, through numerous tenant satisfaction surveys, that you are happy with the services DGHP provides to you as a landlord, including our flexible, 24/7 responsive repairs service; our tenant participation activities; home improvements and our dedicated Customer Service Centre.
Following the Board’s decision at the end of February, you will be notified of any changes to your rent in early March. Any rent increase will come into effect on Monday April 3, 2017.
The consultation is available to complete here.
Information to help you understand the changes is available here.