Tories' rent policy could add millions to housing benefit bill

  • Tories curtail Full Council debate to block vote on Labour amendment

The Barnet Conservatives' plan to increase council rents to 80% of average market rents or Local Housing Allowance levels, whichever is lower, could result in millions of pounds being added to the housing benefit bill.

Barnet council’s draft housing strategy states that “…we think that for many people, including working households on modest incomes, affordable will mean a rent at local housing allowance (LHA) level, which means that they will qualify for support in the form of Housing benefit if their income is low enough to merit this. In view of this the Council will seek to increase the supply of rented homes at LHA level...” 

For a council home in Golders Green, for example, the average rent for a 2 bedroom property is £472 per month, which would increase to £1064 per month at LHA level. That’s an extra £592 per month – a 125% increase. This level of rent increase could result in the housing benefit bill ballooning by as much as £78 million a year – or more - if it were applied to all 10,978 council homes in the borough. £78 million is almost as much as Barnet spends on adult social care each year and would represent a self-inflicted 36% increase on the housing benefit bill.

Housing professionals have highlighted that the policy may be unlawful and at risk of legal challenge should it be implemented, as government guidance currently sets the annual increase of council rents for existing secure tenants at no more than CPI +1%. Rent increases above the rent formula could also mean reduced housing benefit subsidy and therefore no additional income to the council.

In addition Labour councillors believe the policy to be unworkable as many tenants affected could already be at the benefit cap and unable to claim more housing benefit, while for other tenants the amount of income required to afford the higher rent would take them above the threshold for qualifying for a council home in the first place.

A survey of council tenants by Labour's 3 parliamentary candidates, Andrew Dismore AM, Sarah Sackman and Amy Trevethan, showed that 98% of respondents opposed the rent proposals with the remaining 2% not commenting - none supported it.

Labour councillors forced a debate on the issue at last night's Full Council meeting to try and overturn the policy before the Housing Strategy is agreed this summer, but the Conservative Group voted to keep the policy and curtailed the debate before all the speeches had finished.

Labour’s Housing Spokesperson Cllr Ross Houston said: “This rent policy could cause misery and hardship for many people, it may not be lawful, it looks unworkable and it will not solve the affordable housing crisis.

“The proposals should be scrapped and we should work on a new model of affordable rent linked to income, but the Tories didn't want to listen last night and shut down the debate before we could move our amendment - it was completely disgraceful.


"All three of Labour's local parliamentary candidates oppose the rent increase policy, and we challenge the Conservative parliamentary candidates to speak out against this disastrous policy too."


Ends.
Notes:
 1.   A copy of the Labour Group motion can be found here: http://barnet.moderngov.co.uk/documents/s22717/Item%2015.2%20-%20Amendment%20in%20the%20name%20of%20Councillor%20Ammar%20Naqvi.pdf

2.   A link to the LB Barnet draft Housing Strategy can be found here: http://engage.barnet.gov.uk/housing-planning-and-regeneration/barnet-housing-strategy-2025-to-2025/consult_view

3.   Comment on the lawfulness of the proposals and affordability of the proposals can be found here:
http://www.insidehousing.co.uk/barnet-council-proposes-unlawful-rent-rise/7006794.article

http://nearlylegal.co.uk/blog/2014/11/elementary-maths-lb-barnet/

To contact Cllr Houston: cllr.r.houston@barnet.gov.uk

To contact the Barnet Labour Group: 020 8359 2568
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