Members of the Cabinet Committee were told the increase was partially linked to rent increases.
Eileen Rowand, the Executive Director for finance, revealed that the Fife Housing Revenue Account (HRA) is under “significant pressure” this year, and “bad debts” has increased by £891,000 in 2024.
“This is mainly due to a historic position on our debt regarding former tenant arrears which have increased,” she said. “And obviously the increase in rent has had an impact here.”
The information comes as more council rent increases are on the horizon.
In December, finance officers revealed that anything below five per cent would be considered “unsustainable”.
READ MORE: Fife Council tenants could face rent increase of up to seven per cent
Fife Council’s Housing Revenue Account (HRA) is projecting a £7.6 million black hole next year due to increases to operational costs, inflationary pressures, and maintaining investment levels consistent with previous years.
“To meet these rising costs, the HRA must increase rents or generate recurring savings or a combination of both,” Mhairi Mullen, a housing service manager, previously told the Cabinet.
The HRA usually raises rents in line with inflation plus one per cent, which equals about 3.7 per cent as of September. However this amount would leave the HRA with a £3 million shortfall.
“We believe 3.7 per cent as an increase is not tenable and would sadly significantly reduce the capacity of the HRA to support housing investment,” John Mills, Fife’s head of housing services, previously said.
The council is currently consulting with its tenants about options for five per cent, six per cent and seven per cent rent increases ahead of budget talks for 2025/26.