A recommendation from South Essex Homes that would see energy bills for its affected tenants rise in line with the actual costs incurred will be discussed by cabinet next week.
If agreed, South Essex Homes (SEH) would update the way heating bills are calculated and charged to tenants of sheltered housing schemes and hostels from 1 January 2023.(Cabinet Report Tuesday 8 November, agenda item 17).
The report explains how the recommendation follows national energy price hikes and is needed to ensure that tenants heating charges are reflective of the actual cost.
Currently, SEH heating charges for tenants are based on historical costs from between five to 17 months ago. SEH calculated the fixed heating costs at the start of the year on the assumption that energy costs would remain reasonably static as they have done in previous years. This was then applied as part of the rent charge for residents living in properties with a communal heating system.
However, the cost of gas has continued to rise and despite SEH securing a rate lower than the domestic price cap, this still equates to a 200% increase. If SEH continue to charge in the current way, there will be an estimated annual loss of over £400,000 on gas alone.
Using updated Government guidance about bills being fair to both tenant and supplier, SEH recommends a mid-year assessment so heating charges are adjusted on 1 January 2023. This will keep the bills in line with the costs being incurred, so tenants pay the true cost of energy whilst also benefitting from the Government support currently on offer.
The change to the billing scheme will see energy costs for residents in sheltered schemes and hostels rise by an average of £7.87 per week. Residents of general needs houses and flats will not be affected by this mid-year assessment, as those households pay their gas and electricity bills directly to their chosen energy supplier.
Cllr Ian Gilbert, cabinet member for economic recovery, regeneration, and housing, said: “This is not a decision South Essex Homes has recommended to us lightly, and they have considered the financial pressures everyone is under at the moment.
“However, it is not sustainable for them to continue to subsidise what is the true cost of energy now, and with the grants and subsidies available from the Government such as the £400 to help with the cost of energy prices, it makes sense to make this change now, while affected tenants are already receiving this extra financial help, rather than to do it months down the line. In addition to national assistance, South Essex Homes themselves have created a hardship fund for tenants who are struggling, where money has been set aside to help those who are eligible.
“We know that over 70% of our tenants are in receipt of means tested benefits and will already be getting help towards the additional cost being incurred on energy this year, but South Essex Homes will target those households not currently in receipt of benefits to ensure that we are aware of their financial situation and that our residents are claiming all benefits and support that they may be entitled to. South Essex Homes also pledges to keep residents updated, make sure they are fully aware of the changes being made, how to access help and where they can ask questions.”
There are an increasing number of public support schemes available to assist tenants with the rise in living costs. A new guide from Southend-on-Sea City Council will also be available online and in print over the coming weeks which outlines where residents can seek financial support and guidance through these challenging times.
You can also find out what support is available on our website and on the South Essex Homes website.