Decision details

(i)  To agree that charges to tenants for landlord controlled heating will increase by 4.5%, with effect from 6 January 2020; and

(ii)  To agree that, for the residents of International Way, Erskine Court, Sturminster House and Shirley Towers, the unit charge will remain unchanged

The financial outturn for 2018/19 shows that the surplus on the heating account has reduced from £1,236,000 to £702,000 during the financial year. The surplus at 31^st March 2019 is £108,000 lower than forecast in August 2018 due to lower income from leaseholders and tenants However, it is likely that there are a number of estimated bills included in this usage that do not accurately reflect the colder weather between January and March.

The surplus has enabled the re-payment of the loan of £391,000 made by the HRA to the heating account in 2013/14

The surplus generated by International Way has reduced and stabilised, and the new heat energy systems at Erskine Court, Sturminster House and Shirley Towers are being monitored closely to ensure full recovery of costs.

These recommendations will ensure that tenants are charged fairly for the costs of heating their properties, use the current surplus on the account to reduce the potential increase to tenants in the current year, and ensure the medium term sustainability of the heating account.

Alternative options are to increase charges in line with energy inflation, or to freeze charges for a third year in order to reduce the existing surplus more quickly. The former option will not materially affect the surplus on the account, which is contrary to policy, whereas the latter option, while reducing the surplus, will lead to larger increases being required in later years that would be greater than fuel inflation.