Council backs ALMO opposition to rent rise
Newcastle Council has confirmed it is backing moves by its arm’s-length management organisation to oppose sharp rent increases for its tenants.
At a council meeting last week members endorsed a letter sent to the Communities and Local Government department protesting about the 8.2 per cent rise faced by tenants in 2012/13.
Rent rises are set according to a formula of retail price index inflation for September, plus 0.5 per cent, plus up to £2 a week to bring council rents in line with those charged by housing associations.
Newcastle feels the resulting 8.2 per cent rise is too high, but that the potential loss of income prevents it from setting a lower rate.
The debt Newcastle is set to take on as a result of the reform of the housing revenue account subsidy system has been increased by £42 million to reflect the rent rise, so setting a lower rent could leave it out of pocket.
It is calling for the government to step in and limit rent increases.
Newcastle is the latest council to publicly express its opposition to the rise, which has also been opposed by Ipswich and Cambridge. Last week it emerged the majority of councils that responded to a government consultation on reform of the housing revenue account also raised concerns about rents.
The motion passed by Newcastle states: ‘Concern and indeed anger has regularly been expressed about the situation and in particular the disincentives for tenants to keep or seek work, which result, but that board members have so far believed that the loss of housing subsidy obliges them to endorse government recommendations.’