Members of the local authority’s Cabinet Committee were told last week that anything less than a 7% rent increase next year will result in unspecified service reductions.

The survey will ask council tenants about rent increase options of 5%, 6% and 7%. Tenants will also be asked about their priorities for housing services they wish to see protected.

The Housing Revenue Account (HRA), which is the account responsible for income and spending associated with the council’s role as a landlord, is looking at a projected £8 million shortfall for 2024-25 if rents are not raised and/or savings are not made.

Councillors were told that the HRA is experiencing a “difficult financial situation” as a result of high inflation over the last two years. The council said it has until now managed the challenges, but a rental increase or cost savings must now be identified going forward.

“The [projected] budget gap of £8.055m is a result of increasing financial pressures faced by the HRA. This gap will require to be funded through increased rental income, savings or a combination of both,” the committee report stated.

“Taking into account the financial pressures facing the HRA, a decision has been made not to consult on any rental increase below 5%. It is council officers’ opinion that a rental increase of between 5 per cent to 7 per cent balances both the need to maintain rents at an affordable level for tenants and the financial requirements for the HRA.”

The report continued: “A rental increase of below 7% will create a budget gap which will require further savings to close.”

The final decision will be evaluated in February as part of the full HRA Budget report for 2024-25.

Fife Council’s spokesperson for housing Cllr Judy Hamilton said: “Every year we consult with tenants on rent options and it’s a really important decision for every household. Although December and January is a busy time of year, I hope that tenants will take this opportunity to have their say on rent options and let us know their housing priorities.

“We know people are under financial pressures. Prices are rising, heating your home is more expensive, all the services we require cost more, and most importantly the cost of the food we need to feed our families has increased.

“With the increased financial burdens being faced this year, it is more important than ever that tenants use their vote and tell us how they feel about the rent they pay. These votes will help us make informed budget decisions in February next year.”

Cllr Hamilton added: “For the past two years we’ve managed to keep rent increases below the rate of inflation.

“Although inflation is starting to come down we are still facing increased costs and the budget gap has grown to an estimated £8 million before any rent increase is agreed. Any increase below 7% means savings will need to made elsewhere and there will be challenges and pressures on the housing service to continue delivering services in the same way. There are difficult choices ahead.”