Council Housing is not subsidised
11/06/2011 12:16 pm
I often hear people moaning about the relatively cheap rents charged by councils - compared to private rents and claiming they are subsidised by the tax payer. It is not the case.
See this article, from a few years ago, but the system hasn't changed too much since
also more discussion here
essentially, as there are no or small mortgages, councils don't have to charge high rents to their tenants - and in fact pay money back to the treasury -
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13/06/2011 5:14 pm
Ironically Melvin, once again, yes you are.
The confusion comes from the terminology banded around to misuse. But up until a couple of year's ago the treasury was a net contributer to the cost of social housing. Even so, this is not as straight forward as it may seem as the cost of housing benefits has not been fully compensated for many years now, meaning that local communities have been locally subsidising themselves in increasing levels. The current situation is that housing benefit is part funded from local collections and the cost of housing subsidy is completely met and exceeded by the rents paid.
Capital investment and development costs are not subsidy, but because these are grant funded or loan supported, they are sometimes referred to as subsidy by those who want to make it look as if the social sector is getting something it is not in reality, or at least no greater than other parts of society, private and public. The government underwriting of private debt, as we now know, is far greater.
It is not really a great conspiracy, but the disinformation sourced from Tory Central Office and perpetuated by the press and those stupid enough to swallow it all without question is dangerous. The latest demonisation campaign by the disgusting crowd we currently have governing us was reported today as being the suspected cause of the massive increase in hate crimes against the severely disabled.
The policies are bad enough, but the tactics must be exposed and stopped. A step in that is to challenge the ignorant, be they honest or deliberate, to stop spreading the demonisation falsehoods. In so doing at least something is being done to stop our nation from descending into to unknown horrors.
Much truth has come out this month, like the complete failure of the privatised is best lie. Now watch the forces of evil that are our government and media come together to make that a distant memory. Soon we will have loads of stories remembering the bad old days when unions ran the local council services and held the nation to ransom (but without mentioning how little we all paid back then, how much better off workers were, and how much smaller the private economy was as it could not compete either in terms of cost nor efficiency.)
Holding onto the little snippets of council housing is bad because it was subsidised avoids the debate of 'and what is so bad about subsidy if it means people can afford to work for lower wages and yet still have a decent quality of life. Ultimately, any subsidy paid by the State benefits business as the health and wellbeing of the workforce is what they depend upon.
Unless private enterprise is prepared to pcik up the decency bill it will always fall to the State to do so on their behalf. The State has no resources of its own so it needs to raise them from somewhere. That means taxation and the spending means subsidy. The decision area is therefore how much to tax and whom, and how much to spend and where.
I think there is a fair argument that a reasonable proportion of the taxation should fall on those who benefit but refuse to take responsibility, namely business. If they will not invest in the health and wellbeing of their workforce then they can contribute to a central pot and have the State do it for them.
If you want to answer the subsidy question Melvin, look to who ultimately benefits from it and you will be on your way.
14/06/2011 9:02 am
Chris. I thought the government paid 100% subsidy to local authorities for running the Housing Benefit scheme on behalf of central government?
Your main argument seems to hinge on the word 'subsidy'. Maybe change the question to 'Is Council Housing helped by investment, loans, grants, financial guarantees or central government funds in any shape or form' Then the answer is yes...
Can you keep your posts shorter? I fell asleep in the middle bit.
14/06/2011 10:02 am
Social housing receives less 'investment, loans, grants, financial guarantees or central government funds in any shape or form' than commercial businesses and private landlords. Indeed, per capita the front benches of both sides of the commons receive more. Why are you not attacking those sectors?
Your insinuation is that tenants get an unfair handout is unfair and wrong. Worst it is dangerous as it feeds into the current campaign that is seeing hate attacks against this governments demonisation targets increasing. You strike me as a civilised soul, so perhaps you would chose to stop adding to the culture of real attacks and real abuse being carried out against the most vulnerable sections of our society. I did warn you that this would be the outcome, but you seem to have been blind to the historical lessons raised. Melvin - you are adding to the modern day hate crimes of the right wing - is this what you want to be achieving?
14/06/2011 10:17 am
Chris: 'Why are you not attacking those sectors?' Because the question was specifically about Council Housing.
I'm trying to 'insinuate' that the Council Tenants do get a handout. Not that it is unfair. There is a difference. Semantics again perhaps.
As for the 'hatecrime' I'm adding to can you explain this Orwellian phrase? I prefer 'oldspeak' to 'newspeak 'myself, but maybe you consider yourself a 'goodthinker'?
14/06/2011 10:43 am
But council tenants do not get a handout Melvin - that is the point - and you insistance that they do is adding to the right-wing demonisation of tenants campaign. If you are happy to share responsibility for the outcomes of this hate campaign by the Tory Party and Press then that is for your conscience, but do not take humbridge because someone calls you on it.
Personally I find hate politics disgusting, and get very unhappy with myself when a fall into its grasp - but at least that is better (in my opinion) than wriggling away from responsibility for one's own actions and statements, or denying their effects.
14/06/2011 10:58 am
Council Housing is subsidised. If a flat can be rented for £400 a month at market level, but is rented out at £90 at a social rent, then it is being subsidised. The cost to taxpayers is the loss at not charging a full market rent.
14/06/2011 11:21 am
Interesting concept Frances - so subsidy is the loss of potential profit.
Does that mean that when Tesco sell you a Bogof that the tax payer is losing out from the missed VAT so is subsidising the private company?
The reality is that the total rent paid by tenants exceeds the housing cost and the treasury (tax payer) keeps the excess - there is no subsidy Frances.
The market cost of something is not its true cost, but is the cost plus whatever profit level can be made. Market cost has nothing to do with subsidy and it is false to represent it as such.
14/06/2011 11:34 am
'The reality is that the total rent paid by tenants exceeds the housing cost and the treasury (tax payer) keeps the excess - there is no subsidy'
So you beleive that once the council get to keep this money they would not need any government funding of any sort ie no investment, loans, grants, financial guarantees or central government funds at all?
14/06/2011 11:39 am
Sorry Frances, that's just wrong. Subsidy is 'Monetary assistance granted by a government to a person or group in support of an enterprise regarded as being in the public interest.'
Currently the national HRA is about in balance with 25% of councils receiving subsidy and 75% of them contributing to the Treasury. Hence the reason why both this and the last government want to change the way the HRA operates and allow councils some freedoms (although they're not ruling out coming back for a slice of any surpluses that councils generate in the future!) Overall council housing is 'not for profit, which is an entirely different concept.
Council housing is NOT subsidised.
14/06/2011 11:56 am
Did you get a persistently stupid award at school too Melvin?
There is not a subsidy.
Is that brief enough for you to understand?
14/06/2011 12:42 pm
You are reverting to your old persona then' Chris'!
Welcome back 'PSR'. Carry on slinging and slandering...
I'll simplify the question for you 'Chris': Do you think that if Councils kept 100% of the rent receipts they would need no central government assistance in any form whatsoever?
14/06/2011 1:19 pm
To answer the question again for you Melvin (this is turning into a joke telling in a room full of blondes!)
In the management and maintenance of their homes, no there is not a need for government assistance, just as an individual home owner. Where a capital outlay is required then there may be a need to borrow, just as with an individual home owner. In that circumstance then there may be recourse to public funds, if only to underwrite the borrowing.
14/06/2011 1:58 pm
Thank you for your straight answer.
So Council Homes have no 'subsidy'. But there is a 'recourse to public funds'.
I'm glad you got my point in the end.
14/06/2011 2:02 pm
What point was that Melvin?
You have recourse to public funds too as a citizen - and the point is?
Do make your point again as it seems to have either got lost, or was not made.
14/06/2011 2:35 pm
My point was made but lost on you.
Welcome back PSR. As grumpy as ever!
14/06/2011 2:40 pm
'Rent' is a payment in exchange for the use and occupation of a home. If maintenance and management bills are balanced with receipts surely this means that council tenants don't pay rent. Where is the charge for use and occupation of the property? Subsidy, that's where.
14/06/2011 2:48 pm
That's a bit semantically desperate even for you Mr P.
Hope you are still being good by the way.
14/06/2011 2:50 pm
Are you referring to the point that was proven wrong Melvin?
14/06/2011 2:55 pm
Semantically desperate or you don't have a decent answer?
Unfortunately i'm still puffing away. The clutches of capitalist consumerism are too strong. Maybe in conjunction with the nicotine patches i should move to China or Cuba to assist with giving up.
14/06/2011 3:08 pm
Persist - but when you feel motivation, Mr P.
Would it help if I said you are too much a capitalist lacky to have the strength to conquer smoking - go on, do it to spite me - prove yourself at least my equal.
Rising to the bait - your definition may apply to commercial arrangements but is not relevent to the matter of social housing. The defined use and occupation 'fee' is indeed the same as the management and maintenance costs. Therefore, yes, rent is paid, and no, it is not subsidised.