Guest post: As part of a series on Wandsworth’s housing crisis, my colleague Councillor Peter Carpenter explains how Wandsworth sets the country’s highest council housing rents – and does it in a way that penalises tenants who go out to work.
(Earlier posts in the series explain how Wandsworth is ignoring the chance to build 4,000 affordable homes for local people and how the housing crisis hurts residents whether they own a home, are in social housing or rent privately)
HOW WANDSWORTH SETS THE COUNTRY’S HIGHEST RENTS – AND MAKES WORKING FAMILIES PAY EXTRA
The Leader of Wandsqworth Council this week announced, with much fanfare, the Open Council initiative, but nowhere in the 27 key indicators will you find Council Rents or Council Service charges. Nor will you find them in the longer list of 90 key indicators. I would suggest that there is a reason for this.
Wandsworth has the highest council rents and service charges, not just in London, but in the country. Not number one for service and value, but number 169! So much for the openness and transparency trumpeted by our Dear Leader.
If we look at the detail of Council Rents, we see that the Council’s proposed average rent increase of £8.33 a week or £433 pounds a year, takes the average council rent to £121.70 or £6,270 a year. Quite a lot of money for anyone on a modest income.
However, the government has set a limit rent of £113.26 a week, close to Wandsworth’s current average rent of £112.38 a week.
What does this mean? It means that the government will not reimburse Wandsworth for housing benefit paid above one hundred and thirteen pounds twenty six a week.
According to the Housing Department’s figures 73 per cent of the proposed rent increase will be paid back by Wandsworth in Housing Benefit, only 27 per cent will be retained to spend on our housing estates. So out of total rent increases of £7.4 million, Wandsworth will retain only £2 million.
I would submit that this is a very inefficient way of raising money. If any one of us were donating to a charity and we were told that 73p of every pound we donated was going to be spent in administration costs, I suspect that we would very soon cross that charity off our list.
But that is exactly what the financial wizards of Wandsworth are asking us to do.
The only people who actually pay the £433 rent increase are the hard working and aspiring families who are not in receipt of housing benefits.
Precisely the people who have been squeezed hardest by the government’s austerity measures. People whose votes one would have thought the Tory Party aspired to.
Indeed the only time I can recall this Tory council reducing rents was immediately before the 2010 election, and that didn’t do them any good because they lost four seats.
What is even more peculiar is that the Housing Revenue Account doesn’t even need the two million pounds that will be raised by this rent increase. It is in rude good health with ample reserves of one hundred and eighty five million pounds. These will be boosted by the new financial settlement with the government to well over a billion pounds by the end of the 30 year planning period.
I really am at a loss to understand this policy. It seems to me that by pursuing these reckless rent increases, the Leader has shot himself in the foot.
We see the same thing when we look at some of the service charges. Charges for communal heating and hot water to some 4,000 of our tenants and leaseholders are to rise by an average of 20 per cent, reflecting the increase in energy prices last year.
But this average disguises some individual increases of over 60 per cent, £5 a week or £250 a year. At the Housing OSC I proposed that increases over 30 per cent should be phased over two years to mitigate the impact on hard pressed tenants and leaseholders. There aren’t that many of them, and the council is unlikely to be out of pocket as the current fall in energy prices means that its costs are likely to be over recovered next year.
But the hard faced Tories on the committee said No.
I would ask the Leader of the Council to look again at Wandsworth’s rent and service charge policies. It is currently proposing to impose rent increases which are not financially justified on those hard working council tenants who are most affected by the current squeeze on living standards.
Why make their life even more difficult, just for the fun of it?