Welwyn Hatfield housing chiefs have said the borough council should not raise council rents by more than seven per cent.

Councillor Alastair Hellyer, of Haldens ward in Welwyn Garden City, said a rent rise of around five per cent would better match inflation rates.

But at a Welwyn Hatfield Borough Council meeting on Monday, February 5, the Liberal Democrat and Labour joint administration agreed a 7.7 per cent social rents rise – the maximum allowed under rules set by the Conservative government in Westminster.

Cllr Hellyer tabled a motion to raise rents by a smaller figure “to reflect recent consumer price index changes, reduce the financial burden on social housing tenants, and increase consistency in social rent rises”.

The 7.7 per cent rise in social rent is based on the rise in price of a “basket” of goods and services in the 12 months to September 2023, plus one per cent.

CPI inflation stood at 10.4 per cent this time last year (February 2023), but has since fallen to 4.2 per cent in December.

“Had inflation remained at approximately seven per cent, this might be understandable to residents,” the Conservative Party’s motion read.

“But the most recent figures as of time of writing have CPI down at four per cent, and so this increase seems excessive – particularly as Welwyn Hatfield Borough Council’s [finances are] in good shape.

“Therefore, the increase is proposed to drop to five per cent.

“This is still not a real-terms decrease.

“The precedent of raising social rents by CPI plus one per cent is maintained but using more up-to-date figures.”

Cllr Samuel Kasumu, who sits on the Conservatives’ benches and represents Hatfield Villages ward, said: “These are exceptionally challenging times for the whole country.”

He said Covid-19 and conflicts in eastern Europe and the Middle East had rocked the UK economy.

“This economic moment, as tough as it may be, will pass,” Cllr Kasumu added.

“We must do what we can to protect the most vulnerable in this particular moment.

“The amount of money might not be a lot of money for a lot of people in this chamber, but that could be the difference for someone to be able to pay their council tax, someone being able to feed their family.”

The Conservatives led Welwyn Hatfield Borough Council since 2002 until the local elections in May 2023.

The previous administration raised rents by seven per cent in 2023/24, the maximum permitted under government rules last year.

Borough finance chief and Liberal Democrat councillor Duncan Jones, of Peartree ward, introduced the joint administration’s first budget which he said is “balanced” with “no cuts in services”.

Cllr Jones said: “Faced with an expected gap of £2.5million at the start of the current financial year, this balanced budget has been achieved despite high inflation and a lack of sufficient support from the Conservative government.

“The longer term outlook is far from rosy, with the expected budget gap increasing to £5.704m in 2027/28.

“Over the last 10 years, we have lost 64 per cent of our government funding.”

He accused Westminster of “excessive expenditure” – referencing the £9billion spent on unusable or cost-inflated personal protective equipment and fears there is a shortage of planes for the Royal Navy’s new aircraft carriers, as reported in The Telegraph and Mail Online.

Cllr Jones said inflation is “a bit like turning a supertanker around”.

As long as CPI inflation has a value above zero, prices are rising, so the effects of high inflation continue even when rates fall.

“Costs carry on,” he said.

Cllr Max Holloway, Labour councillor representing Howlands and cabinet member for community, said: “While this is the first budget of the joint administration, it’s one which is sadly cast very much in the shadow of its predecessors and the Conservative government.

“It’s important context as to how and why we are where we are.

“The outlook for local authority finances is bleak and the government has for years outsourced austerity onto local authorities, with local people shouldering the cost.”

Cllr Holloway said limiting a rent rise would result in a “borrowing bombshell” for the authority.

The authority’s Section 151 officer – effectively the chief accountant – warned reducing rent rises would cut £1.5m from the housing budget in 2024/25.

The effect of the one-year deal would be a £62.5m reduction to resources available across 30 years.

Less day-to-day money would be free for “buying” long-term services, so the authority would need to consider extra borrowing of £50.5m over 30 years.

The combined hit to Welwyn Hatfield Borough Council’s housing budget would reach £113m.

The council agreed a 7.7 per cent rent rise across Welwyn Garden City, Hatfield and the surrounding villages, bringing the authority’s average actual rent to £131.03 per week in 2024/25.