Fife budget: 5% rent rise confirmed as Labour proposal wins vote

The rise comes as the local authority’s housing revenue account was facing a £7 million budget gap.

Councillor Judy Hamilton, housing spokesperson, said: “We are on the brink of a housing emergency in Fife and the rent increase we are introducing is lower than most other councils are implementing. However, that means there will still be a gap in the budget and this year we will be dipping into reserves to avoid that bigger increase for tenants.

"Tenants assessed the affordability of any increase and provided feedback on rent increases and on their priorities. To be able to deliver tenants’ priorities: to continue to make home improvements, reduce fuel poverty and build new council houses, we need to increase rental income."

She continued: “We’ve seen a series of below-inflation increases to rent over years, and now we need to balance affordability with the level of services that tenants expect.”

The SNP group wanted to minimise the impact on Fifers and increase rent by 4% while Labour and their Tory and Lib-Dem colleagues argued that a 5% increase would be more responsible.

While Labour called the lesser rent increases “financially reckless” and “ruinous,” the SNP party begged colleagues to rethink their plans.

Councillor Brian Goodall (SNP for Rosyth) said. “I wish we could freeze it altogether but that’s not an option, so let’s do one thing we can and keep the increase below inflation.”

Labour’s proposal won 38-30 in a vote with support from Labour, Lib-Dem and Tory groups.

“Everything we do in the council should reflect our commitment to addressing poverty and inequality,” Cllr Hamilton said “I’m in no doubt that good quality housing is the bedrock of communities and fundamental to addressing inequality and poverty.”

She continued: “In the HRA, we have the opportunity to control our income and make decisions by talking and listening to tenants. By determining together what our priorities are, we can decide how best to protect our assets and the services we provide to tenants.”

Cllr Hamilton said 69% of council tenants are in support of a 5% increase in order to fund their top three priorities: home improvements, energy efficiency, and the new build housing programme.

However, even with a 5% increase, the HRA was left with a budget gap. The remaining £422,000 shortfall will be filled from a combination of reserves and reduced money for tenant support funds. The SNP’s 4% proposals would have left an even bigger £1.7m gap that would have taken even more from tenant support funding and from reserves.

According to a finance report, the gap is a “consequence of unusually high inflation coupled with rental increases over the last five years being below inflation and costs increasing at a faster rate than the income to support those costs.”

The new rent increases will take effect from April 1, 2024.