Landlord Controlled Heating Equality and Safety Impact Assessment
Contents
Overview
Introduction
The Public Sector Equality Duty (Section 149 of the Equality Act) requires public bodies to have due regard to the need to eliminate discrimination, advance equality of opportunity, and foster good relations between different people carrying out their activities.
The Equality Duty supports good decision making – it encourages public bodies to be more efficient and effective by understanding how different people will be affected by their activities, so that their policies and services are appropriate and accessible to all and meet different people’s needs. The Council’s Equality and Safety Impact Assessment (ESIA) includes an assessment of the community safety impact assessment to comply with Section 17 of the Crime and Disorder Act and will enable the Council to better understand the potential impact of proposals and consider mitigating action.
Name or Brief Description of Proposal
As of June 2024, Southampton City Council had 5504 properties connected to a landlord controlled heating (LCH) supply. Where applicable, a tenant’s gross rent includes a weekly heating charge.
The cost of energy has increased considerably and the council’s heating account is ringfenced. The council does not make a profit from these charges. The charges are solely based on the actual cost of heating homes. It is a Legal position that the account has to balance without subsidy from other tenants/leaseholders.
The heating account was in deficit by £2.35m as at 31 March 24.
In Feb 2023 Council approved a 101% increase in LCH costs. This was based on financial modelling that incorporated future energy cost estimates and an element to recover the built up deficit over a 5 year period based on more moderate annual increases.
The deficit had reduced to £2.35M as at 31 March 2024 and LCH costs increased a further 6.5% in April 2024.
Current practice is that heating charges reflect the actual cost incurred by the council of providing the heating. Changes in energy costs are ultimately passed on to tenants/leaseholders receiving this service. Although there can be a timing difference between the energy cost changes and changes to heating charges.
Brief Service Profile (including number of customers)
- Excluding the 311 void properties when this analysis took place, the total number of tenants with landlord-controlled heating is 5192 households.
- The number of leaseholders with landlord-controlled heating is 1053.
- 40.6% (2108) of tenants with LCH have the main tenant as over 65 years old.
- 10.4% (540) of all main tenants with LCH have a recorded disability. 5.4% (284) of total number of tenants are over 65 with recorded disability.
- 336 of main tenants with a recorded disability live in supported housing
| Arrears | Over 65 – No known disability | Over 65 – known disability | Under 65 – No known disability | Under 65 – known disability |
|---|---|---|---|---|
| Arrears more than 4 weeks – GN | 35 | 2 | 890 | 56 |
| Arrears more than 4 weeks – Floating | 42 | 11 | 63 | 6 |
| Arrears more than 4 weeks – Complexes | 60 | 9 | 22 | 4 |
CHARACTERISTICS OF TENANTS IN LCH BY HOUSEHOLD SIZE:
Most tenants with LCH (87%) live in 1 or 2 bed accommodation. There are relatively few 0 bed / studio or larger properties over 2 beds
Arrears are not significantly correlated with bedroom number / property size, except for tenants in 1 bed accommodation who are significantly less likely to be in arrears; and tenants in 4 bed accommodation where over half (53%) are in arrears. This is skewed however due to the very small amount of 4 bed properties
Most tenants with a known disability (80%) live in 1 bed accommodation
Most tenants (86%) aged over 65 live in 0 or 1 bed properties, with the majority in 1 bed accommodation. Relatively few (17%) live in larger properties of 3 or 4 bedrooms
Most tenants in supported housing (94%) are in 1 bed accommodation. No tenants in supported housing are in 3 or 4 bed properties
| Measure | 0 bed | 1 bed | 2 bed | 3 bed | 4 bed |
|---|---|---|---|---|---|
| All LCH tenants | 360 | 2934 | 1557 | 324 | 17 |
| All tenants in arrears | 118 | 455 | 504 | 114 | 9 |
| Percent of all tenants | 2% | 9% | 10% | 2% | 0% |
| Percent in arrears | 10% | 38% | 42% | 10% | 1% |
| Disabled | 24 | 430 | 72 | 12 | 1 |
| Percent of all tenants | 7% | 15% | 5% | 4% | 6% |
| Percent of all disabled | 4% | 80% | 13% | 2% | 0% |
| Aged over 65 | 94 | 1761 | 216 | 36 | 1 |
| Percent of all tenants | 2% | 34% | 4% | 1% | 0% |
| Percent of all 65+ | 26% | 60% | 14% | 11% | 6% |
| Supported housing | 104 | 2091 | 33 | 0 | 0 |
| Percent of all tenants | 2% | 40% | 1% | 0% | 0% |
| Percent of all supported tenants | 5% | 94% | 1% | 0% | 0% |
LCH TENANTS AND RISK OF ARREARS:
It does not seem that LCH tenants are at higher risk of arrears, when compared to SCC tenant arrears in general.
There are 1200 LCH tenants (30.06%) who are in arrears of over 4 weeks which is broadly comparable to the 26.82% of all SCC non-Universal Credit claimant tenants who are in arrears, using 23 / 24 Annual House Mark Pulse metrics.
When compared to Universal Credit claimant tenants where 63.31% are in arrears, LCH tenants are significantly less likely to be in arrears, even when controlling for more vulnerable groups of LCH tenants such as Supported Housing or older persons, though caveats apply as this isn’t a directly comparable group.
*footnote (Universal Credit is limited to claimants under state pension age, and the known disability data we have is related to household heads and not other persons; there may be others in the household with disabilities, and not all household heads / dependents will be eligible or have applied for Universal Credit or similar disability benefits.)
For example more vulnerable LCH tenants seem to be on the whole less likely to be in arrears than both general LCH and SCC tenants, and SCC Universal Credit claimant tenants
| Indicator | Count | Percent % |
|---|---|---|
| All LCH tenants in arrears | 1200 | 30.06 |
| SH LCH tenants in arrears | 217 | 9.74 |
| Known disabled household heads in arrears | 58 | 10.76 |
| LCH tenants 65+ in arrears | 159 | 7.54 |
| All SCC non Universal Credit claimants in arrears | 2321 | 26.82 |
| All SCC Universal Credit claimants in arrears | 63.31 | 4087 |
Summary of Impact and Issues
Heating charges increased by 101% in April 2023 & a further 6.5% in April 2024. The table below sets out the new charges:
| Property band by Floor area | Number of properties | 2023/24 Weekly charge (£) | 2024/25 Weekly charge (£) | Increase £ |
|---|---|---|---|---|
| Band A < 40m² | 1,683 | 21.29 | 22.67 | 1.38 |
| Band B < 50m² | 2,196 | 25.56 | 27.22 | 1.66 |
| Band C < 60m² | 288 | 29.83 | 31.77 | 1.94 |
| Band D < 70m² | 631 | 34.10 | 36.32 | 2.22 |
| Band E < 80m² | 643 | 38.37 | 40.87 | 2.49 |
| Band F < 90m² | 201 | 42.94 | 45.73 | 2.79 |
| Band G < 100m² | 8 | 47.57 | 50.66 | 3.09 |
| Band H < 110m² | 11 | 52.26 | 55.66 | 3.40 |
| Band J < 20m² | 3 | 7.39 | 7.87 | 0.48 |
| Weighted average | 27.60 | 29.40 | 1.79 |
These are charges that relate solely to the Landlord-controlled heating charges, and residents still have their own individual supplier bills for other energy consumption.
The heating charges for properties are based on various criteria but primarily the square footage of the property that is heated
Energy for the majority of the landlord-controlled heating is purchased annually- the charges run and are fixed during any financial year - 1st October to 30th September.
The potential impact on SCC was estimated during April 2022 as increases of approximately 88% for electricity, 120% for gas. The impact on the LCH was for the partial year in 2022/23, due to the purchase in advance of energy; but saw actual costs escalate by 60% from £4m to £7m, and estimated cost of £9.5m in 2023/24 as the full year impact.
There was no mid year increase in LCH during 2022/23, at a time when bills for non LCH council tenants, private sector tenants and homeowners across the city increased significantly. As a result the heating account was in deficit by some £3.5m as at 31/3/23.
The potential increase to tenants in receipt of LCH required to both recover the deficit built up in 2022/23 and similarly in 2023/24 was calculated to be in excess of 200%.
However, the decision was made to increase charges by c~100% in April; recognising the significant increase in cost but at the same time recognising the impact on tenants and as closely aligned to the governments price cap as possible. The impact of this was to largely bring costs under control in 2023/24, but it did also help to address the deficit which reduced to £2.35M by March 2024.
The Housing Revenue Account cannot afford to write off the £2.35M deficit and to do so would require significant savings to be made that would adversely impact all tenants. Going forward, managed increases will be required over a period of years to recover and better manage downward trends in energy price if and when they arise.
Any extreme increase in charges run the risk of being counter productive as if may results in significant increase in rent arrears and potentially court action.
The impact of any increases will be the additional amount of money that tenants will need find from personal budgets that are already extremely strained against a backdrop of inflation.
Potential Positive Impacts
Continued recovery of the LCH means the heating account will balance, and therefore will not have to be subsidised by other tenants/leaseholders.
The current landlord controlled heating system offers a simplified means of charging and recovering the energy tenants used in heating their homes.
One advantage of LCH is that the charges do not include VAT. Residents directly purchasing energy from traditional suppliers would be liable for VAT at 5%.
The landlord-controlled heating arrangement can also lead to lower unit rates for energy due to bulk energy purchase that includes negotiated discounts.
The delivery of LCH results in an assurance that properties are being adequately heated, reducing the likelihood of damp. This is compared to the prospect of residents opting not to heat their homes in circumstances where this control is available. The assured delivery of LCH into homes is also likely to reduce illnesses linked to cold and damp.
Responsible Service Manager: Matthew Luik
Date: 13/1/25
Approved by Senior Manager: Jamie Brenchley
Date: 13/1/25
Potential impact
Impact assessment
| Impact Assessment | Details of Impact |
|---|---|
| Age | 40.6% (2108) of tenants with LCH have the main tenant as over 65 years old. Older people are therefore a very significant cohort to be considered. |
| Disability | For those disabled people who are not in work and welfare payments are their only income, benefit rates have seen a significant real-terms cut due. Leaving |
| Gender Reassignment | Neutral |
| Care experienced | Neutral |
| Marriage and Civil Partnership | Neutral |
| Pregnancy and Maternity | Neutral |
| Race | Neutral |
| Religion or Belief | Neutral |
| Sex | Neutral |
| Sexual Orientation | Neutral |
| Community Safety | Neutral |
| Poverty | Neutral |
| Health & Wellbeing | Neutral |
| Domestic Abuse |
Possible Solutions & Mitigating Actions – Age and disability
SCC to continue its programme of works to improve the Energy Efficiency & thermal comfort of homes.
The Government have provided households in the country with targeted financial help towards their energy costs and additional hardship and winter fuel payments
Warm Home Discount Scheme – The Warm Home Discount Scheme is a one-off £150 discount off an electricity bill. Residents qualify if they or their partner receive the Guarantee Credit element of Pension Credit .
Winter Fuel Payment – Those born before 23 September 1958 could get either £200 or £300 to help pay heating bills for winter 2024 to 2025. There is eligibility criteria.
Cold Weather Payment – Those in receipt of certain benefits will get a payment if the average temperature in your area is recorded as, or forecast to be, zero degrees celsius or below over 7 consecutive days.
Employment support service – Southampton City Council’s Employment & support service for Southampton council tenants offers support with finding work.
Breathing Space (Debt Respite Scheme) – It is possible to get temporary protection from creditors for up to 60 days while receiving getting debt advice and making a plan. This scheme is called ‘Breathing Space’. If enacted:
- enforcement action cannot be taken
- creditors cannot contact tenants about debts
- creditors cannot add interest or charges to your debt
To apply for the ‘Breathing Space’ scheme, a debt adviser needs to submit an application on the tenant’s behalf.
Welfare Rights – Additional support can be given from the Welfare Rights team in terms of enabling them to access any potential additional support available to them.
Household Support Fund (HSF) – The HSF is there to help low income households, including families, pensioners, unpaid carers, care leavers and disabled people. It provides help for those who are struggling with the cost of living.
Bulk buying of energy – SCC purchases energy annually. This bulk energy purchase includes negotiated discounts when compared to individuals purchasing energy directly from suppliers. As of Sept ’24, there is a 5% VAT difference between residents directly purchasing their energy from traditional suppliers
Tenant Choice when bidding for properties – If a property has an associated LCH charge, this is made clear. Tenants / prospective tenants can chose not to bid for properties with LCH.
Possible Solutions & Mitigating Actions – Domestic Abuse
Flexible Fund – The Flexible Fund is a source of funding available for Victims and Survivors of Domestic Abuse, it is managed and administered through the Whole Housing Approach. The fund can be used to support a survivor in anything that links directly or in directly to their housing situation.
