Government of Jersey

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A decision made 2 October 2010 regarding: States tenants - service charges.

Decision Reference: MD-H-2009-0091
Decision Summary Title :	DS – Changes to States Tenants Service Charges in January 2010		Date of Decision Summary:	2nd November 2009
Decision Summary Author:	John Hamon		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Changes to Service Charge Levels for States Tenants in January 2010		Date of Written Report:	28th October 2009
Written Report Author:	Jason English		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: To approve changes to the level of service charges for utilities paid by States Tenants
Decision(s): The Minister approved the following changes to service charges, subject to the approval of the Minister for Treasury & Resources:- An decrease of 5.1% in the charge for electricity based heating and hot water An increase of 15% in the charges levied for Gas Heating and Hot Water All changes to take effect from 4th January 2010.
Reason(s) for Decision: To ensure that charges accurately reflect the actual costs associated with providing the services following the recent changes to prices charged by the respective utility companies.
Resource Implications: Financial: Nil – Impact of changes should maintain cost neutrality for revenue budget
Action required: Finance Director to notify Treasury & Resources to ensure approval is granted under Financial Direction 4.1 and to request the Treasury and Resources Minister’s approval for the Department to pass on subsequent increases in excess of 2.5% where such increases are driven by changes to the prices levied by the utility companies. Finance Director to notify Social Security Department in respect of the impact on Income Support
Signature:		Position: MINISTER
Date Signed:		Date of Decision (If different from Date Signed):

States tenants - service charges

Date of Report:- 28 th October 2009

REPORT FOR THE HOUSING MINISTER

CHANGES TO SERVICE CHARGE LEVELS FOR STATES TENANTS

Purpose of the Report

To request approval for changes to the levels of charges to States Tenants in the following areas:-

Electric Heating and Hot Water

Gas Heating

to take effect from 4th January 2010.

Background

The cost of providing heating and hot water and mains water to tenants was last reviewed in January 2009. MD-H-2009-0015 refers.

At that time, the charge for Gas and Oil heating was decreased by 5% and water was increased by 2.5% all exclusive of GST. The cost of electric heating was also increased by 9% (except for 84 units at Convent Court, which, due to the condition of the building had their respective charges reduced by 5%).

Recent Price Changes

The JEC have recently announced a tariff reduction of 5.1% for the supply of electricity for the Winter Warmth scheme which provides heating and hot water to many of the Department’s tenants.

Jersey Gas has recently announced an increase in their tariff of 15% effective from the beginning of September 2009.

ELECTRICITY

1422 tenants currently receive their heating and hot water on the Winter Warmth sceme. The following table gives the current average charges and the revised charge with the proposed decrease of 5.1%:

Type of Accommodation	Number of Bedrooms	Current Average Price £	Change in Price £ (5.1%)	Revised Average Price £

Bed-sit	0	4.89	-0.25	4.64

Flat	1	6.3	-0.32	5.98
Flat	2	7.02	-0.36	6.66

Maisonette	1	6.23	-0.32	5.91
Maisonette	2	7.99	-0.41	7.58
Maisonette	3	10.68	-0.54	10.14

GAS

492 tenants currently receive their heating from gas systems. The following table gives the current average charges and the revised charge with the proposed increase of 15%:

Type of Accommodation	Number of Bedrooms	Current Average Price £	Change in Price £ (15%)	Revised Average Price £

Bed-sit	0	9.80	1.47	11.27
Bungalow	2	14.23	2.13	16.36

Flat	1	12.73	1.91	14.64
Flat	2	14.67	2.20	16.87
Flat	3	15.66	2.35	18.01

House	2	15.66	2.35	18.01
House	3	16.74	2.51	19.25
House	4	17.63	2.64	20.27

Maisonette	1	12.73	1.91	14.64
Maisonette	2	14.67	2.20	16.87
Maisonette	3	15.66	2.35	18.01

Impact of the proposed changes

1422 tenants will see a 5.1% decrease in their electric heating and hot water charge.

492 tenants will see a 15% increase in their Gas Heating Charge

All of these changes are set out below.

Financial Direction 4.1 sets out at paragraph 5.2 that increases in States Charges should normally be limited to 2.5% per annum with compelling cases to be subject to the prior approval of the Minister for Treasury & Resources. For that reason it will be necessary to request approval for the proposed changes prior to implementation.

All of these changes will have an impact on the calculation and payment of Income Support benefits and it is necessary to provide 6 weeks notice of the changes so that benefits can be recalculated and letters sent to all claimants in advance of changes taking effect.

In the interest of good customer service it is therefore proposed that the changes take effect from Monday 4th January 2010.

Recommendation

1 - That the Minister approve the following changes to service charges, subject to the approval of the Minister for Treasury & Resources:-

An decrease of 5.1% in the charge for electricity based heating and hot water

An increase of 15% in the charges levied for gas heating.

2 – That the Minister requests the consent of the Treasury and Resources Minister to permit future increases in charges above 2.5% where these are in line with increases imposed by the utility companies.