What’s the Answer?
Council housing in Shepway & across the country facing a serious funding crisis. Government policies since 2010 are responsible for a significant decline in the income local authorities collect from tenants’ rent. In 2012 a new council housing finance system, self-financing, was introduced. Under this system local authority Housing Revenue Accounts (1) receive no subsidy. Their income is overwhelmingly from tenants’ rent and service charges (around 91%)(2). In ending the old housing subsidy system, the government divided up what it said was the national council housing debt, and redistributed it amongst councils. More than £13 billion extra debt was imposed on 136 local authorities, whilst 34 had some debt relief. Councils have to repay the principal (the original ‘loan’) and pay interest annually. So hundreds of millions of pounds a year have to be paid to the government’s Public Works Loan Board. This is money which cannot be spent on the upkeep of homes. Shepway was given an extra £40.1 million debt; which will cost a little over £17 million to service, according to SDC’s own figures. Meaning £57 million will be repaid in total by SDC.
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To break it down year by year SDC will pay the following between 2013 -2031
For the introduction of the new system SDC had to draw up a 30-year-business-plan. The amount of debt each authority was given was based in large part on an estimate of their income from rent over these 30 years. But no sooner was self-financing introduced than the coalition government introduced policies which undermined these plans. They
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Changed the rent formula that councils had to apply to rent increases;
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Increased the discounts for Right to Buy leading to a massive increase in sales;
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Imposed a 1% rent cut for 4 years.
Swindon Tenants Campaign group has produced a new pamphlet, “The case for cancelling council housing debt” which updates the argument. See our website here:
https://keepourcouncilhomes.wordpress.com/2016/11/20/the-case-for-cancelling-council-housing-debt/
It’s a 20 page pamphlet. £1 plus postage
MW
If a Council home costs £400 per month, why cannot this cost be met, either by tennant contribution or by benefit, or some formula of both. Why should there be a shortfall contributing to the overall debt of Council.
Surely there is something wrong concerning the mathematics of Council leading to any shortfall within their housing budget..
There are candidates for social housing who can pay, there are those who cannot pay. The benifits system allows for those who cannot pay. Council will not be ‘Out of Pocket’ for those who cannot pay. Again I ask why Council claim any shortfall. And would ask, with prior experience, Is this the truth or SDC truth!
Why Are we paying rent for the sitting MP for shepway, when the conservatives owned it then sold it to who . Now pay rent payed for by us ….. Who owns it