News

Communal heating charges 2010-11 and 2011-12

November 2010

Following consultation with residents on the number of hours heating that they wanted provide through the communal heating system and the council’s decision to bring heating charges to council tenants in line with the costs of providing their heating new charges will be implemented from 3rd January. The new charges will be fairer on tenants because they will ensure that all residents receiving the same level of service will be charged the same. Set out below is the methodology used to calculate the new charges.

• The charge being introduced is based on the expected cost of gas used to keep communally heated council tenants homes warm throughout the heating season. Leaseholders are charged for their share of heating their actual block and the costs charged to them are removed from the total before it is divided between tenants.

• The overall cost is based on the value of gas contracts negotiated by the council in the energy market. The council’s energy team works hard to secure the best prices from energy providers and buys gas in bulk to help achieve very favourable prices in this market where prices have risen considerably over the last few years.

• Heating charges are calculated by sharing the estimated overall cost of gas used to heat tenants homes to those council tenants how receive a communal heating services. Charges are then increased a little for larger property and reduced a little for smaller ones. Homes that receive both heating and hot water are charged 100% of the charge and those with heating only are charged 60% of the charge.

• As a result there are 10 different charges – one for each five property sizes (bedsits, 1 or 2 or 3 or 4 bedroom properties) for both types of energy consumption (heating only or heating and hot water).

• In the past there were approximately 110 different charges. The council decided a few years ago to move towards the cost of the fuel being covered by the income from tenants and therefore not having to be subsidised by all tenant’s through their rent. A phased approach was taken towards bringing tenants towards a fairer charge. However, as prices increased it was taking longer to move tenants towards a fairer charge and therefore it was agreed to move to this immediately.

• For properties whose charge has gone down this is due to the fact that the council has succeeded in renegotiating lower gas prices since the 2010-11 charges were set and these have therefore gone down.

• As charges are based on current energy prices charges will change every year depending on the cost of fuel. It is not currently anticipated that charges will increase in April as charges have been set using the cost of gas up to October. This would only change if there was a big change in the gas market over the next few months.