Administrative headache for authorities after government decides to rein in rents
Rents U-turn to cost councils £10,000 each
Councils will have to write to all their tenants and may have to provide some with refunds after the government staged a dramatic U-turn over plans for inflation-busting rent increases.
The government made a surprise announcement on Friday - 48 hours after indicating there would be no change - that it was willing to offer financial help to councils to enable them to halve predicted 6.2 per cent rent increases.
The surprise move, which the government predicts wil cost up to £175 million, came after councils across England had completed the onerous tasks of setting budgets, printing rent notifications and calculating benefit entitlements. Now authorities will have to do the same all over again, a process which they say will cost them around £10,000, with one council predicting a cost of £50,000. And they warn it could be the summer before tenants see reduced rents.
Paul Langford, chief housing officer at Leeds Council, described the timing of the government’s decision as ‘not good’. ‘Councils will have written to every tenant in the country saying: “This is your rent increase.” The vast majority will have gone with the guidelines. So it will be a bit confusing for some tenants,’ he said.
Barry Kendler, head of housing at Havering Council in east London, warned that councils would need amended subsidy determinations from the government and would then have to give tenants notice of the changes. It could therefore be another two months before tenants benefitted, he said.
Councils say they are pushing for answers from the government about whether it would foot the bill for the cost of rewriting rent plans. They also want assurances that the financial help promised by the government will cover them for all 52 weeks of 2009/10, allowing them to compensate tenants who have had to pay the 6.2 per cent increase until the reduction takes effect.