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States Tenants: Utility Charges Increase - June 2011

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A decision made 16 April 2011:

Decision Reference:      MD-H-2011-0041 

Decision Summary Title :

DS - Increase in GST and water charges to States tenants – June 2011

Date of Decision Summary:

15th March 2011

Decision Summary Author:

 

Finance Director

Decision Summary:

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

 

Written Report

Title :

WR - Increase in GST and water charges to States tenants – June 2011

Date of Written Report:

15th March 2011

Written Report Author:

Senior Management Accountant      

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject:

Increase in GST and water charges to States tenants – June 2011

Decision(s):

The Minister,

          

  1. approved the increase in charges made by the Housing Department as result of the 2% in increase in GST with effect from 6th June 2011.

 

  1. approved the increase in charges for water to States tenants by 1.5% with effect from 6th June 2011.

 

Resource Implications:

Financial: The increase in GST of £32,000 based on current forecasts will be paid to the Treasury & Resources Department. Increase in revenue of £330 per week for water charges. 

Action required: Finance Director to notify affected tenants, permit holders and Income Support of the changes.

Signature:

 

Position:

Minister

Date Signed:

 

Date of Decision (If different from Date Signed):

 

States Tenants: Utility Charges Increase - June 2011

Date of report 15th March 2011

 

REPORT FOR THE MINISTER FOR HOUSING

 

Increase in GST and Water Charges to States Tenants

 

Purpose

 

To consider an increase in GST and water charges to States tenants.

 

Background

 

GST

 

As part of the 2011 budget the States agreed to increase the rate of Goods and Sales Tax from 3% to 5% with effect from 1st June 2011.  This tax applies to various supplies made by the Department including charges for heating and hot water, parking and garages and water supplied to States tenants and customers who pay for a permit to park on the Department’s estates.

 

It is a statutory requirement for the Department to increase the amount of GST levied on such supplies.  The impact of this change will vary depending on the services provided to individual users of the Department.

 

Water

 

The Housing Department pays Jersey Water a quarterly sum in advance for the provision of water to its social housing stock. This cost is recharged to tenants by way of a weekly charge to their rent account.

 

Jersey Water has recently announced that it is to increase the charge for unmeasured supply by 1.5% from the 1st April 2011.   In order to ensure full recovery of the cost of supply it is necessary to increase the cost to tenants by a similar amount.

 

The table below sets out the impact of this increase:

 

Property Type

 

Number of Bedrooms

 

Existing Charge (exc GST)

 

Increase at 1.5%

 

New Charge (exc GST)

 

Number of Units

 

 

 

 

£

 

£

 

£

 

 

Bedsit

 

0

 

4.10

 

0.06

 

4.16

 

297

 

 

 

 

 

 

 

 

 

 

 

Bungalow

 

0

 

4.10

 

0.06

 

4.16

 

19

 

 

1

 

4.37

 

0.07

 

4.44

 

39

 

 

2

 

4.70

 

0.07

 

4.77

 

7

 

 

3

 

5.38

 

0.08

 

5.46

 

1

 

 

 

 

 

 

 

 

 

 

 

Flat

 

1

 

4.37

 

0.07

 

4.44

 

1,623

 

 

2

 

4.70

 

0.07

 

4.77

 

1,116

 

 

3

 

5.38

 

0.08

 

5.46

 

92

 

 

 

 

 

 

 

 

 

 

 

Hostel

 

1

 

4.37

 

0.07

 

4.44

 

1

 

 

 

 

 

 

 

 

 

 

 

House

 

1

 

4.37

 

0.07

 

4.44

 

25

 

 

2

 

5.38

 

0.08

 

5.46

 

245

 

 

3

 

6.25

 

0.09

 

6.34

 

702

 

 

4

 

6.25

 

0.09

 

6.34

 

118

 

 

5

 

7.36

 

0.11

 

7.47

 

7

 

 

6

 

7.36

 

0.11

 

7.47

 

2

 

 

 

 

 

 

 

 

 

 

 

Maisonette

 

1

 

4.37

 

0.07

 

4.44

 

3

 

 

2

 

4.70

 

0.07

 

4.77

 

144

 

 

3

 

5.38

 

0.08

 

5.46

 

41

 

 

4

 

6.25

 

0.09

 

6.34

 

2

Total

 

 

 

 

 

 

 

 

 

4,484

 

Compliance with Financial Directions

 

Financial Direction 4.1 requires that any increases in charges should normally be limited to 2.5% and increases above this level must be referred to the Treasury and Resources Minister for approval.  This increase falls below that limit and thus the approval of the Treasury and Resources Minister is not required. Further, the Treasurer of the States, under delegated authority from the Treasury & Resources Minister, has granted an exemption to this requirement for approval where the increase in charges made by the Department is directly offset by an increase in the costs in supply of the utility service. (TR-2010-DD24).  The Department will however inform the Treasury and Resources Department of this increase.

 

Recommendations

 

That the Minister;-

 

  1. approve the increase in charges made by the Housing Department as result of the 2% in increase in GST with effect from 6th June 2011.

 

  1. approve the increase in weekly water charges to States tenants by 1.5% with effect from 6th June 2011.

 

 

Housing Department

 

Report Prepared By: -

 

Jason English

Senior Management Accountant

 

………………………………                   Date:                                          2011

 

 

Report Checked By: -

 

J C Hamon

Finance Director

 

……..……………………….                   Date:                                         2011

 

 

Authorised By: -

 

Ian Gallichan

Chief Officer

 

……………………………….                  Date                                          2011 

 

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