Beckett makes U-turn on council rents
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The government has made a dramatic last-minute U-turn on its resolve to push through 6.2 per cent council rent increases from April.
Housing minister Margaret Beckett announced she would be making extra funding available to help councils halve the average government-imposed rent increase from 6.2 to 3.1 per cent. This will mean the average rent increase being slashed from £4 to less than £2, she said.
The announcement followed angry lobbying from councils up and down the country, who piled pressure on the government to help them avoid the unpopular increases from April.
It signals a dramatic turnaround from a statement Mrs Beckett’s department issued to Inside Housing last Wednesday, in response to the question of whether the government would be bringing in new measures between now and April to help councils ease the expected rent increases.
At that time the government merely stated that it was looking again at the guideline 6.1 per cent rent increases for April 2010.
‘This is nowhere near a long-term solution and we believe that it is the job of local councils to set local rents and not the government’s.’
Phillipa Roe, cabinet member for housing, Westminster
But on Friday Mrs Beckett said the global downturn had persuaded her to issue new guideline rents for all councils for the coming year. She said: ‘We have listened to what councils and their tenants have said to us about the planned rent increases, and we are determined to help tenants get a fair and affordable deal.
‘Ultimately, it is for each council to take up this offer of support, but I would expect them to ensure their tenants receive the full benefits.’
The last-minute pledge of financial assistance received a surprised welcome from councils which had lobbied for government assistance but had received no indication that help was on its way.
Phillipa Roe, cabinet member for housing at Westminster Council, which spearheaded a campaign against the rent rises with seven other London boroughs, said she was very pleased that the minister had finally recognised that her department’s proposals for the rent rise ‘were totally unacceptable when we are facing a severe economic crisis’.
She added: ‘However, this is nowhere near a long-term solution and we believe that it is the job of local councils to set local rents and not the government’s. We therefore would ultimately like to see the current rent setting regime completely overhauled and replaced with a system that is far fairer and more transparent and where the needs of local people are put first.’
Steve Murphy, chair of arm’s-length management organisation Your Homes Newcastle, where tenants faced a 6.31 per cent increase, said he was ‘delighted’ at the opportunity to pass on lower than expected rent increases to tenants.
He added: ‘It may take a while to implement, but we will do this as soon as we can. However, we need more detail so we can work out the practicalities of the bidding process and how it might work.’
Councils have until the end of April to announce whether they will be taking up the government’s offer.
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Readers' comments (8)
Alexander Roy Johnston | 08/03/2009 2:54 pm
Apart from the fact there should be no rent increase considering they have been robbing us for years in return for sub standards housing what about the tenants of RSL's eg: Somer Community Housing Trust (SCHT)has just sent me a s13 notice notifying me of a 7.2% rent rise in April which is odd as I have never signed an assured tenant with SCHT whilst it has never issued me with a s3 notice of assignment of the old landlords interests under the Landlord and Tenant Act 1985 failure to issue such notices being a crimminal offence and which means I am still a secure council tenant with my landlord B&NES Council!
Wheres my 2.5% rent increase then ?
Regards,
Alexander Johnston
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Junior | 08/03/2009 4:06 pm
What about the Customer of Housing Association are rents just gone up by seven pounds extra a week what about the people of minumum wages who cannot afford to pay the council tax - I say what about us
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Joe Halewood | 09/03/2009 4:20 pm
A simple point. If rent increases are halved because the economy is in recession, does this mean increases will be doubled in times of economic boom?
Of course not - but that is precisely the precedent this knee jerk reaction sets. Target rents were set a few years back to remove the disparity between social housing rents and private ones / market value as the way to ensure social housing met the decency standards. If there was a need to increase social rents to improve social housing stock but now no increase in revenue to meet this need......
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Isidoros Diakides | 10/03/2009 0:14 am
Firstly there is more than one link with the recession (ie not just because the average low income person needs all the help the government could provide). The original formula (leading to the average 6.2% increase) was based on last year's RPI (5.6%); the fact that the RPI increase next year is now suddenly predicted to be much lower (even 0% according to some predictions) as a result of the recession, has provided us with an added powerful argument in our negotiations with the government, which proved crucial.
Secondly, rather than talk about kneejerk reactions and so on, I would rather hail the fact that, in Margaret Becket, we have for the first time in decades a Housing Minister who seems to be genuinely on the side of social housing and tenants; it's not just this rents issue - it is also her determination to enable councils to restart building council housing and to provide mortgages to low income households and also to restore the balance of presentation in cases of proposed stock transfers to mention just a few recent examples.
Lets be positive for once and help her on all these things in her inevitable battles with the treasury.
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john richardson | 26/03/2009 6:15 pm
the decision to exclude rsl tenants from the rent rise reduction is most unfair they are in social housing just as council tenants but because they have no political clout they are being discriminated the effects of the financial crisis is just as bad for them and it should be a warning to any council tenant that moving to an rsl is bad news
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Junior | 27/03/2009 6:38 pm
Well done John - I agreed with you well done and lets see the affect it has on Housing Association Tenant's by the end of the year how many will be in Arrears due to Rent Increases, Utility Bill's and Council Tax - God help the Tenant's of Housing Association
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D barrett | 08/05/2009 11:58 am
This government will spout hot air about helping the poor and then thieve off us bybackdoor. This government holds some £20MILLION pounds raked off from council rents in there coffers.Well that is before they spent it all and then had to borrow more.
Coucil housing is supposed to be for the poorest of society and the rent should reflect that.
Taking into account my house was built in 1950 for around £2000 and has been rented out by council since then. I would have thought they had money to repair it when needed, but oh no they keep pleading poverty , and then they waste money when they send someone to bodge it up.
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D barrett | 08/05/2009 12:07 pm
Who is telling lies again? according to the government website it is the councils who decide what rent to charge.
http://www.direct.gov.uk/en/HomeAndCommunity/SocialHousingAndCareHomes/CouncilRentAndOtherCharges/DG_10029760
Once again we have the situaton where one hand does not know what the other hand is doing.
This government is walking in a dream.
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