17 September 2008, 08/210
Heating charges
West Lancashire District Council has agreed to dip into funding
reserves to reduce the impact of
rising fuel prices on heating charges for elderly
tenants.
The Council has agreed to take around £18,000
out of reserves in order to limit the increase in heating charges
to 23.4%.
The increase will affect around 750 tenants
living in sheltered accommodation who pay fuel charges to the
council on top of their rent
payments, rather than direct to the fuel companies.
Cllr Val Hopley, portfolio holder for housing,
said: “We were faced with some difficult choices, On the one hand we are aware that many of
the people who receive this service are elderly on limited income.
Equally, many of our tenants are having
to face large increases in their fuel costs too and it doesn’t seem
right for potentially vulnerable people to subsidise those on the district heating
service.
“Cabinet accepted my recommendation that after
protecting tenants who benefit from this service between 1995 to 2005 with no increase in charge, the
Council had no option but to recover the costs of the service. We
have had to increase charges by 23.4% but this increase is better
for tenants than the other options put forward of 47.6% and
35.6%.
“I regret that this has proved to be necessary
and will look at ways to minimize further increases subject to the
volatile market stabilizing.”
The Council considered four options on heating
charges. One was to use
funding from the housing revenue account to absorb the full
cost of the increase. Two further options were considered to
balance the district heating account in the current financial
year. The first of these was
to increase charges by 47.6% in order to pass on the full cost of
the rise to the tenants. The second was to use around £18,000 from
the heating reserves to reduce the increase to 35.6%. The final
option is to increase charges in line with the fuel supply increase
of 23.4% and utilize the district heating reserve of around £18,000, in order to balance the
district heating account by 30 May 2009. This was agreed.
The calculations are based on the fact that
the new fuel contract rates for
the council came into effect on 1 June 2008, while the
increases to tenants will come into effect from 13 October.
Residents pay a set charge based on the type
of accommodation they rent from the Council. The charges
vary according to the site and type of property, and range from
£5.00 - £ 12.68 per week. The charges are
collected on 48 occasions.
Related information
> Housing