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Rent rises

February 20, 2009

Our too centralised system of government means that just when councils really need the flexibility to take action to help people in their commuities, they are hamstrung by government guidelines, laws and financial arrangements.   The current controversy over rent rises illustrates the problem.

The Government’s rent guidelines will lead to rent rises of around £6 a week for most council tenants, way above inflation.   Many councils are delaying setting the increases and notifying tenants in the hope of a change of heart by Ministers.    One of the problems is that the rent guidelines set by government are based on last September’s Retail price Index, which was 5%, based on which, the government announced a cap of 6%.   The RPI is now 3.1%.   So why can’t councils just decide to set a lower increase?


Well the answer is that they can, and some will, but they will have to fund this by moving money around within the Housing Revenue Account.   The effect of this is to eat into funds which are already allocated, leading to cutbacks in tenant and neighbourhood services and repairs and improvement of existing homes.   The alternative is for the government to look again at the rules and guidelines, allow councils more flexibility about how they manage their finances, and provide a small amount of financial assistance – the Treasury do after all take £194m from the rents.     

Ministers have promised to look again, it is not too late to change the guidelines and even at this 11th hour we hope they will listen.

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