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June 20, 2024
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Dudley Council’s finance problems blamed for rent increases

The damning verdict was delivered as councillors quizzed officers at the Housing and Community Safety Select Committee on January 22.

Committee member Councillor John Martin hit out during a debate on the proposed 7.7 per cent rise in rents after a report revealed levels of reserves had become dangerously low.

Labour’s Cllr Martin said: “Senior leaders over a number of years need to take a long hard look at themselves. It’s down to management incompetence over a number of years.

“The council needs to start looking after the people who pay the rents.

“Income is £98m from rents, that is going up to £110m over the next couple of years, that is going to build up reserves in the Housing Revenue Account (HRA).

“I don’t think this is affordable for our tenants, it is going to cause people just above benefits levels to struggle.”

The housing account is separate to the rest of the council’s finances and the latest forecast shows a deficit of £3.8m and just £1.3m in reserve.

Councillors were told forecast reserve balances in March will be 1.4 percent of income whereas across England councils with similar housing income have an average of 34 percent in reserve.

Dudley’s head of finance, Rachel Cooper, told the meeting the current level of reserves is not enough.

She said: “It doesn’t give enough buffer for unexpected costs or reduced income, there are a lot of risk factors, we need a more substantial reserve.”

Other planned increases include a hike in service charges for tenants in homes with communal areas, the average charge would go up to £12.46 per week.

Councillor Caroline Reid said: “I am having people coming to me as full-time workers saying it’s basically pay the rent or eat food.

“Where do we think working class people are going to get the money from?”

The meeting was told around 70 percent of tenants are on benefits and would receive financial support and discretionary payments would be available for the rest.

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