This time last year it was a row over a punitive 6.2 per cent rent increase which was halved in an 11th-hour U-turn by then housing minister Margaret Beckett.

This time it’s the amount by which councils will be short-changed because of the Byzantine programme to equalise rents for council and housing association tenants, known as ‘rent restructuring’.

The sudden decision by the government to bring forward the date by which rents will converge from 2023/24 to 2012/13 is the root of the problem.

This is not the first time that bureaucrats have caused havoc in this programme and, although the policy’s ultimate aims are sound, the management of the process leaves much to be desired.

Council finance officers are right to feel aggrieved that they have to pick up the pieces on rental policy for a second consecutive year. Although rental income is higher than had been expected, for some with low rents, the gap between what they charge and their ‘target’ rent will have to be plugged by dipping into reserves - in some cases for millions of pounds.

Normally the CLG would make this good with compensation money the following financial year. Yet officials have made it clear to local authorities that, due to a potential change of government, this cannot be guaranteed.

That is not good enough. Housing minister John Healey should step into the breach and promise councils they will be repaid. The last thing he wants is local authorities (Labour-led or otherwise) resorting to raising service charges for tenants to bridge the gap.

Mr Healey should also bear in mind that if he wants councils to continue using their reserves to fund the council house building boom he hailed this week in Tyneside, the less that is tied up in funding rents the better.

Have your say

You must sign in to make a comment