Dundee City Council's Consultation on Rent, Sheltered Service Charge and Other Charges is now underway.
Every year Dundee City Council carries out a review in respect of the Housing Revenue Budget. This includes reviewing the rent charge and other charges including the Sheltered Service Charge that require to be set so that it can continue to deliver services to Dundee City Council tenants and to balance the Housing Revenue Account.

Following the recent How Your Rent is Spent consultation; tenants have advised Dundee City Council that their main priorities are:

1. Repairs,
2. Improving Energy Efficiency in Council Houses,
3. Helping Tenants Keep Their Tenancies,
4. Building More New Houses,
5. Environmental Improvements.

PROVISIONAL REVENUE BUDGET 2026/27
At the meeting of the Neighbourhood, Housing and Communities Committee on Monday 27th October, a report on the Review of Rents and other Housing Service Charges (Report No 308-2025) was agreed. The reasoning and context for rent and service charge increases were contained in section 5 of that report which is noted below:

In January 2025, the Housing (HRA) Revenue Budget 2025-28 and Other Housing Charges 2025/26 was approved by members (Article VI of the minute of the meeting of the City Governance Committee on 20 January 2025, Report No: 12-2025 refers).
Over the past few months the Executive Director of Neighbourhood Services, has reviewed the Provisional Housing (HRA) Revenue Budget 2026/27 that was included in the above report.

The budget has been updated to reflect any necessary cost pressures and savings that have been identified through the 2025/26 revenue monitoring process to date. In addition, any new cost pressures that are expected to emerge in 2026/27 are included along with any additional investment that are proposed in the budget. The total expenditure requirement for 2026/27 amounts to £4.735m and is further detailed in Appendix 1 to this report.

The Budget for 2026/27 includes provision for the 2026/27 agreed pay award. Allowance has also been made for other specific and general price inflation, where appropriate. The key overall variances include the following:

Staff Costs (Increase of £0.807m)
Mainly due to the agreed pay award increase for 2026/27 of 3.5%, as well as provision for the shortfall in the 2025/26 pay award (budget assumed 2.5% although nationally agreed award was 4.0%), and provision for the Employers National Insurance contributions increase (budget assumed 13.8% although contribution rate agreed by UK government amounts to 15%), as these changes were agreed after the 2025/26 budget was prepared. The remaining increase reflects adjustments for increments payable and allowances for staff turnover.
Property Costs (Increase of £4.501m)
The Executive Director of Neighbourhood Services has undertaken a review of the current and previous overspends and budget pressures within this area that have been reported in the latest and previous years revenue monitoring. These budgets have been robustly reviewed and realigned to ensure they accurately reflect the actual cost of delivering the services.

Since 2022/23 - 2024/25, the relet and responsive repairs budgets have overspent by £9.3m with a further projected overspend in 2025/26 of £2.7m. Over these years this has been managed through a combination of underspends in other areas of the HRA and utilising reserves however this is no longer sustainable.

The total cost of the relets service has increased by £2.3m for 26/27 which is in line with historical trends showing the year-on-year increases. Most costs are associated to relet repairs which are carried out by Construction Services. This cost includes the delivery of 1,300 relets in 2026/27, which is based on the current termination levels and content of work required to relet the properties. A detailed review of the cost of relets showed that the average cost of relets is consistently 15% higher than the average cost assumed in the 2025/26 budget.

The current average cost of a relet is:
• Major Relet £8,727
• Normal Relet £3,444

The costs incurred are due to a variety of factors, notably the extent and types of repairs required and the impact of cost inflation. Aligning the budget with projected resource and work content, based on actual 25/26 figures, is expected to reduce rental void loss by having fewer properties void, resulting in a reduced required budget of £234,000 for 2026/27.

The total cost of the responsive repairs service has increased also by £2.3m for 26/27 which is in line with historical trends showing the year-on-year increases. This includes the day-to-day repairs service including emergency repairs and gas and lift servicing. The cost of delivering the responsive repairs and maintenance service is based on the current projected level and 32 cost of repairs being carried out. This includes 40,000 repairs per annum inclusive of labour, material, and subcontractor costs.

Overall, this includes the impact of pay increases (together with the above shortfalls for previous years) and inflationary pressures for materials. The overall projected salary cost for Construction Services has increased by £1.6m based on previous assumptions.

This relates to:
• an increase of 2% in respect of the 2025/26 pay award and a further 3.5% in respect of the 2026/27 pay award (£1.0m),
• the effect of National Insurance increases announced for the 2025/26 fiscal year (£0.4m) an increase in Living Wage payments in respect of apprentices (£0.2m).

Supplies & Services (Decrease of £0.363m)
This decrease mainly reflects structural changes in the quality and performance team and a reduction in the support provided by the homelessness team that are recharges to the HRA. This decrease is also due to the discontinuation of contract for Rent Recovery software as this function will now be provided in house.
Capital Financing Costs (decrease of £0.051m)
Loan charges have decreased, based on borrowing of £20m projected to be undertaken in 2025/26 to fund capital expenditure. The budgeted pooled interest rate is assumed at 4.2%. These costs reflect the level of borrowing costs required to support the delivery of the latest approved Housing HRA Capital Plan 2025-30. A review of the HRA Capital Plan 2026-2031 has also been carried out and assumptions are included in future projections.

This includes allowances for future investment works that will be identified through the stock condition survey including further energy efficiency improvements aimed to improve the stock and also support tenants in fuel poverty. Furthermore, it includes assumptions in respect of RAAC remediation costs which are currently subject to evaluation following the completion of pilot works across 5 different archetypes which will be reported back to committee.The outcome of the review of the Capital Plan will be reported to members in February next year when the revised capital plan is considered for approval.

The budget detailed in Appendix 1 makes assumptions relating to other housing charges for financial year 2026/27. The cost of the sheltered warden service is fully recovered by the service charge and as almost three quarters of the expenditure for the service relates to staffing, it is very sensitive to any changes to these costs. After taking cognisance of the pressures noted in paragraph 5.3, in respect of staff pay increases and the NIC increase it is anticipated that the overall staff costs will increase by £0.212m.

This together with this inflationary increases for other costs e.g. property mean that in order to provide a balanced budget in 2026/27 the service charge would require to be increased by 9%. In addition, these charges propose an increase for car parking in garage / lock ups and garage sites by 3.50% to recover the cost of maintaining these properties. Details of all these charges are included in Appendix 2.

The budget 2026/27 detailed in Appendix 1 currently shows a deficit of £4.735m. This deficit would be removed by applying a rent increase of 8.00%. As with previous years, it is proposed that council house tenants are given the opportunity to indicate their preference on other rent increase options that would provide for additional expenditure in key priority areas in exchange for a greater rent increase.The available options are summarised below and further details including the specific impact on service delivery are provided in Appendix 3.

Option Increase (%) Average Weekly Increase
1 8.00% £7.28
2 8.25% £7.51
3 8.50% £7.74
As noted above, the budget detailed in Appendix 1 shows a deficit of £4.735m. To set a balanced budget, this is the level of savings that would require to be made if a 0% rent increase was proposed.

Dundee City Council house rents have increased by 14% over the past five years in comparison to an average 17.5% for local authority rent increases in Scotland. The five-year change within the Private Rented Sector is 44%. Over the past five years, Registered Social Landlord rents in Scotland have increased by approximately 20%.

Dundee City Council housing rents have previously been fixed in relation to percentages of the Gross Annual Values (GAV). The GAV is intended to reflect the rent which the house might be expected to attract on the open market in ideal circumstances where there is neither a glut nor a shortage of accommodation. In these circumstances, the GAV can be assumed to have taken account of the size, type and age of the house, the area of location and amenity value.

This basis was previously accepted as reasonably fair and rents calculated and applied in this way to maintain the proper differentials and spread the burden of increased costs over the tenants in relation to the independently assessed value of the accommodation and amenity enjoyed by them. For 2026/27 it is proposed that the rents in Dundee are calculated on a straight percentage increase rather than applying the GAV multiplier. The reason for this is to ensure that the rent increase is more transparent for tenants where a straight percentage increase is applied to their weekly rent charge. The GAV multiplier method means that in some cases the percentage increase can vary.

In preparing the above statements, the Executive Director of Neighbourhood Services has considered the key strategic, operational, and financial risks facing the Council over the period. The main factors considered were:

− the possibility of new or emerging cost pressures and responsibilities.
− the inherent uncertainty surrounding matters such interest rates and price inflation.
− any impact of the Prudential Code for Capital Finance.
− continuing impact of the cost-of-living crisis and ongoing Welfare Reforms specifically in relation to on tenants’ ability to pay their rent.

By way of exemplification, the following table shows the potential financial impact of any variations against the current key budget assumptions:

Budget Area Current Consumption Example Variation Financial Impact
Price Inflation Various +0.5% £208k
Interest Rate (Pooled Rate) 4.2% +0.5% £43k
Dundee City Council is now carrying out a consultation with all tenants in respect of the Rent Increase options, the proposed Sheltered Service charge increase, and Other Housing Charges. Your opinion matters, so please take time some to Get Involved & Have Your Say on the options available during this year’s consultation, which will conclude on December 21st, 2025.
Your opinion matters, so please take a moment to Get Involved & Have Your Say on the options available during this year’s consultation. Don't forget the PRIZE DRAW! Enter your details for a chance to win a £200 gift card.

Question Title

* 1. Please choose one of the following options.

( Privacy & Cookie Notice

T