PROVISIONAL REVENUE BUDGET 2027/28
In January 2026, the Housing (HRA) Revenue Budget 2026-29 and Other Housing Charges 2026/27 was approved by members (Article VI of the minute of the meeting of the City Governance Committee on 19 January 2026, Report No: 13-2026 refers).
To demonstrate what previous rent increases have delivered through service improvements and tenancy sustainment, Housing and Construction Services delivered the following during the reporting period: -
- Tenancy Sustainment for households permanently rehoused is 91.5%.
- 7 new apprentices were employed within Construction Services in the last year.
- 49,759 reactive repairs completed.
- 945 mainstream properties and 423 network properties were prepared for letting.
- 11,250 of 11,252 Gas Safety Checks completed on time in a rolling programme
- 2345 Electrical Safety Inspections were complete.
- Capital Improvements including Window Replacement, Roof Replacement, Disabled Adaptations, Kitchen, Heating and Boiler Replacements to over 844 properties.
Over the past few months the Executive Director of Neighbourhood Services, has reviewed the Provisional Housing (HRA) Revenue Budget 2027/28 that was included in the above report. The budget has been updated to reflect any necessary cost pressures and savings that have been identified through the 2026/27 revenue monitoring process to date. In addition, any new cost pressures that are expected to emerge in 2027/28 are included along with any additional investment that are proposed in the budget. The total expenditure requirement for 2027/28 amounts to £4.479m and is further detailed in Appendix 1 to this report.
The Provisional HRA Budget for 2027/28 includes an allowance of 3.00% for an assumed pay award. If there is any change in this assumption for 2027/28, then funding would need to be identified within existing resources to fund this additional cost. Allowance has also been made for other specific and general price inflation, where appropriate. The key overall variances include the following:
Staff Costs (Increase of £0.413m)
Mainly due to an estimated pay award increase of 3.0% for 2027/28. Provision is also included for additional Housing staff to support Housing Services, including the response to the Housing Emergency. A review is under way to confirm the specific additional resource requirement.
Property Costs (Increase of £1.969m)
The Executive Director of Neighbourhood Services has undertaken a review of the current and previous overspends and budget pressures within this area that have been reported in the latest and previous years revenue monitoring. These budgets have been robustly reviewed and realigned to ensure they accurately reflect the actual cost of delivering the services.
The total cost of the relets service has increased by £0.849m for 2027/28. It is projected that £0.400m will be capitalised as this relates to works such as replacement kitchens and bathrooms that are carried out during the void process. This therefore results in a net increase of £0.449m for the relets service. Most costs are associated to relet repairs which are carried out by Construction Services. This cost includes the delivery of 1,800 relets in 2027/28, which is based on the current termination levels and content of work required to relet the properties. The average cost of a relet in 2025/26 was:
- Major Relet £9,229.05
- Normal Relet £3,293.65
- Average Void (All) £4,262.43
The costs incurred are due to a variety of factors, notably the extent and types of repairs required and the impact of cost inflation. Aligning the budget with projected resource and work content, based on actual 2026/27 figures.
The total cost of the responsive repairs service has increased by £0.967m for 2027/28. This includes the day-to-day repairs service including emergency repairs and gas and lift servicing. The cost of delivering the responsive repairs and maintenance service is based on the current projected level and cost of repairs being carried out. This includes 40,000 repairs per annum inclusive of labour, material, and subcontractor costs. This also includes the transfer of resources to establish a dedicated Team focusing on damp, mould and condensation given the legislative changes from 06 October 2026 and the resource requirements to complete within the prescribed timescales.
Overall, this includes the impact of estimated pay increase and inflationary pressures for materials. The overall projected salary cost for Construction Services has increased by £0.476m based on previous assumptions. This is mainly due to the estimated pay increase for 2027/28 of 3%.
Supplies & Services (Increase of £0.553m)
This increase mainly reflects pay inflation applicable to internal recharges for the caretaking/ concierge service, anti-social behaviour team, homelessness team and the quality and performance teams. The revenue expenditure associated with the Reinforced Aerated Autoclaved Concrete (RAAC) Remediation programme and the additional resource requirements associated to Health and Safety to support carrying out works at Multi-Storey Developments have also been included in the 2027/28 budget.
Capital Financing Costs (increase of £1.558m)
Loan charges have increased, based on borrowing of £32m projected to be undertaken in 2026/27 to fund capital expenditure. The budgeted pooled interest rate is assumed at 4.2%. These costs reflect the level of borrowing costs required to support the delivery of the latest approved Housing HRA Capital Plan 2026-31. A review of the HRA Capital Plan 2027-2032 is currently being undertaken, and assumptions are included in future projections. Following completion of the full Housing Stock Condition Survey a review of the Capital Plan will be carried out. In the meantime, it currently includes allowances for future investment works including further energy efficiency improvements aimed to improve the stock which includes Linlathen Phase 1 and also support tenants in fuel poverty. Furthermore, it includes allowances in respect of RAAC remediation and the new build development at Blackness.
Planned Maintenance (increase of £0.598m)
This increase mainly reflects the additional budget required for the inspection and maintenance of properties that have External Wall Insulation installed.
The budget detailed in Appendix 1 makes assumptions relating to other housing charges for financial year 2027/28. The cost of the sheltered warden service is fully recovered by the service charge and as almost three quarters of the expenditure for the service relates to staffing, it is very sensitive to any changes to these costs. After taking cognisance of the pressures noted in paragraph 5.3, in respect of staff pay increases, it is anticipated that the overall staff costs will increase by £0.142m. This together with this inflationary increases for other costs e.g. property mean that in order to provide a balanced budget in 2027/28 the service charge would require to be increased by 6%.
In addition, these charges propose an increase for car parking in garage / lock ups and garage sites by 3.00% to recover the cost of maintaining these properties. Details of all these charges are included in Appendix 2.
The budget 2027/28 detailed in Appendix 1 currently shows a deficit of £4.479m. This deficit would be removed by applying a rent increase of 7.00%. As with previous years, it is proposed that council house tenants are given the opportunity to indicate their preference on other rent increase options that would provide for additional expenditure in key priority areas in exchange for a greater rent increase. The available options are summarised below and further details including the specific impact on service delivery are provided in Appendix 3.
| Option | Increase (%) | Average Weekly Increase |
| 1 | 7.00 | £6.89 |
| 2 | 8.00 | £7.87 |
| 3 | 9.00 | £8.85 |
As noted above, the budget detailed in Appendix 1 shows a deficit of £4.479m. To set a balanced budget, this is the level of savings that would require to be made if a 0% rent increase was proposed.
Dundee City Council house rents have increased by 20.5% over the past five years. The five-year change within the Private Rented Sector is 44.5% according to City Lets published statistics. Over the same period, Local Authority rents have increased on average between 25-30% based on published statistics from the Association of Local Authority Chief Housing Officers (ALACHO). Registered Social Landlord rents in Scotland have increased by approximately 17.7% based on published statistics from the Scottish Housing Regulator.
In 2027/28 the rents in Dundee will be calculated on a straight percentage increase.
In preparing the above statements, the Executive Director of Neighbourhood Services has considered the key strategic, operational, and financial risks facing the Council over the period. The main factors considered were:
- the possibility of new or emerging cost pressures and responsibilities.
- the inherent uncertainty surrounding matters such interest rates and price inflation.
- any impact of the Prudential Code for Capital Finance.
- continuing impact of the cost-of-living crisis and ongoing Welfare Reforms specifically in relation to on tenants’ ability to pay their rent.
By way of exemplification, the following table shows the potential financial impact of any variations against the current key budget assumptions:
| Budget Area | Current Assumption | Example Variation | Financial Impact |
| Pay Awards | 3.0% | +0.5% | £36k |
| Price Inflation | Various | +0.5% | £224k |
| Interest Rate (Pooled Rate) | 4.2% | +0.5% | £45k |
