THE leader of Redditch borough council has hit over Government plans that could see the authority lose £857,000 a year – equal to a £8.6 million loss over four years.
Councillor Bill Hartnett has written to the Minister of State for Housing and Planning Brandon Lewis MP raising concerns about a proposal for council house rents which could impact on everyone in the town.
The scheme was announced by the Chancellor of the Exchequer George Osborne earlier in the year and would lead to a one per cent reduction in social housing rents for four years starting April 2016.
Coun Hartnett says this would be unfair and requires proper consultation with a full consideration of short and long term implications.
In his letter, Coun Hartnett discusses the way in which the council’s 30 year Housing Revenue Account (HRA) business plan, calculated in 2012, is fundamentally and directly impacted as a result of this proposal, with the potential for the council to lose £857,000 per annum, £8.686m over four years and £138m potential loss over the 30 years.
“This proposal is unfair and could have major implications for generations to come if it is implemented in its current form,” said Coun Hartnett.
“Whilst I am not advocating that rents should increase – I am more than aware of the impact that would have on our tenants – the loss of revenue from this proposal could be just as detrimental. It is likely to seriously impact our investment programme which in turn will impact our ability to maintain decent homes for our tenants.
“Such debt is bound to affect all of our services in the long term which in my opinion is totally unacceptable.”
In response to the proposal, the Leader has formally asked for this rent reduction to be discretionary or at least compensated by grants. If the proposal is made compulsory he has also issued a formal request for a recalculation of the debt calculation of the HRA business case.