DOUGLAS Council says its should be allowed to set its own rents for the social housing under its control.
It has submitted a detailed response to the government’s review report into public sector housing.
The government is consulting on a range of options, including the introduction of means testing, to tackle the growing £7 million deficit in public sector housing. The report outlines radical options such as introducing income-related rents, fixed-term tenancies, increasing rents and restricting public sector housing just to those with children or with particular needs.
Douglas Council says it is broadly in favour of the principles of the report but it is concerned the review’s recommendations do not include devolving wider powers to local authorities.
Council leader Councillor David Christian said it was regrettable that, as the island’s largest housing authority with 2,271 homes under its control valued at about £227 million, Douglas Corporation was not consulted.
He said: ‘While in the main we agree with the overall findings, we are deeply concerned there is no call for a restructuring of local government that would allow authorities to have far greater autonomy.
‘It is government, not the council, that approves rent levels which then determines how much we may spend on maintenance. This not only compromises how we can best serve our tenants but also places a reliance on deficiency funding support which, in turn, impacts on how we deliver value for money to our ratepayers.
Regrettable
‘Douglas Council is well placed to set its own rent levels. This would allow us to maintain and manage our housing stock without the need for deficiency funding from the Department of Social Care.’
He said it was regrettable that government policy had led to rent levels being kept artificially low, and this in turn had led to the deterioration of the housing stock, which required capital to be borrowed for refurbishment, rather than for providing new affordable housing.
The government’s review report indicates to tackle the growing housing deficit, rents for an average three-bedroom house will have to increase from £74 to £143 in April 2016.
But Councillor Christian said that if the council was allowed the freedom to set its own rent increases, this rent increase could be made significantly lower, to £127, saving the average tenant around £1,774 over the four-year period 2013-2017.
‘Simply put, if the council were to resume full control of its housing stock including setting rent levels and determining expenditure priorities, reliance on deficiency funding and the rate-funded housing subsidy could be eliminated within four years,’ he said.
The council says it is not in favour of the review’s proposal for a single housing authority for the island. It welcomes the proposal to review eligibility criteria but says it would not support means testing overall, but agrees tenants receiving housing benefits should be means-tested regularly to ensure those benefits reach those most in need.’