THE Conservative Government was compared to a loan shark at Tuesday’s meeting of Redditch council’s executive for its u-turn on social housing rents.
Back in 2014 the Coalition Government produced a paper on guidance for social housing in which rents in the sector were to increase annually by the consumer price index plus one per cent for ten years. Redditch council based its housing revenue account on this.
However the Government changed its mind, introducing from April this year a one per cent rent reduction in social housing rents for four years, effectively blowing a hole in the borough’s budget.
Over the 30-year mortgage the council took out to buy its housing stock from the Government this means a £120m estimated loss of income.
The committee also heard most council tenants wouldn’t benefit from the rent cut as the saving would go straight back to the Treasury.
Councillor John Fisher (Lab, M’boro) told the meeting: “With this Government you cannot be sure about anything – it’s like dealing with a loan shark.”
In a letter to the council following its objection to the u-turn, Brandon Lewis MP, Minister of State (Communities and local Government) said: “At the election we committed to £12b of welfare savings and the scale of the housing benefit bill means that housing benefit must play its part.
“We realise that this rent reduction will impact on councils’ housing housing finances but believe local authorities will be able to manage the reductions.”
