| Previous Section | Index | Home Page |
“I would like to know if there is anything the parliament can do to intervene against the Rent Increase planned to begin in April 2009 in Lambeth. I usually expect an annual increase in rent but when I received a letter stating that the increase would be £15.00 per week on top of weekly rent I was more than unhappy. The letter from my housing office stated that this is because of mismanagement of funds and basically we have to pay. I work...and am on an average income with two children to support and just cannot afford to pay this huge amount. I think this is wrong, because we the people who live within Lambeth are not responsible for handling the funds that come through and don’t think we should be made liable to pay for the council’s mistakes. If it is at all possible I would like this to be pushed as far as it can to ensure Lambeth Council clean up their own mess and don’t dump the bill on us residents who are already financially strained.”
That is a reflection of the very many—the hundreds—of responses that I have had. People feel very upset, as one would imagine.
I know that my right hon. Friend has looked at the issue and been willing to meet me, and I am very grateful for all the meetings that we have had. My right hon. Friend the Member for Streatham has been a Lambeth Member for a very long time, although not quite as long as I have, and we both want Lambeth to be on a level playing field and its housing department to be restored so that we can feel confident about its financial situation. Whatever my right hon. Friend the Minister says today, she should note that we would definitely welcome the Government’s greater oversight of that Lambeth department. Tenants asked some time ago for inspectors to go in and try to sort out Lambeth housing, although that request perhaps went a little too far. I accept, however, that anything the Government offer has to come with strings attached—a call for greater oversight to ensure that good practice is followed and the old complacent failures in the department are weeded out.
I know that my right hon. Friend is busy, but she might like to meet representative tenants in the borough so that she can hear directly from them. I also remind her that the Government have taken quite a lot of money—£712 million of subsidy surplus—since 2003-04 from the housing revenue account system. Tenants feel that if only they could get some of it back, it would help their situation.
I thank the Minister for all the time that she has already spent on this issue, but I hope that she can respond today in a way that will give us some hope. I cannot express strongly enough the anger, upset, misery and desperation in the homes of many of my constituents just down the road from Parliament. They feel that they can do nothing to stop this incredible increase and that the last resort has to be for me and my right hon. Friend the Member for Streatham to come here and speak directly to the Minister for Housing to see what the Government can do. I know that the Government want to help, and I hope that between us all we can find a solution.
2.45 pm
The Minister for Housing (Margaret Beckett): I begin by acknowledging at once the real concern that has been expressed by my hon. Friend the Member for Vauxhall (Kate Hoey) and my right hon. Friends the Members for Streatham (Keith Hill) and for Dulwich and West Norwood (Tessa Jowell) not only in this debate, but over the weeks and months. All Lambeth MPs share the same concerns, and my hon. Friend the Member for Vauxhall has made a powerful case today on the long-standing nature of the some of the problems in Lambeth, about which I have heard on many occasions over the years. As she has rightly and powerfully said, those problems are in no way to be laid at the door of the tenants, who are most impacted by the failures of service and the proposals that the council is making.
I also acknowledge at once that, as my hon. Friend has said, the reason for the rent increase that the council is considering is the need to balance the housing revenue account and the real difficulty in so doing. My understanding is that the council’s rises come against a background of what have historically been some of the lowest rents in London and that, in addition, the council has experienced a number of challenging issues in respect of its housing service and management of stock.
Incidentally, I entirely accept my hon. Friend’s point that such issues have happened under Administrations of all political shades.
Because the problems are of long standing, they can be difficult to resolve. However, I also recognise that the current council has begun to take significant steps forward, and I congratulate it on its progress. For example, it is working hard with the arm’s length management organisations to reach a position at which they can qualify for funding to deliver a decent homes investment programme. I hope that the council will ensure that the ALMOs keep the Homes and Communities Agency advised of their progress and of any problems to make sure that there is a full understanding of the position and so that support that might be made available can be discussed.
As my hon. Friend has pointed out, we have recognised the general concerns raised by councils, including Lambeth council, about the current system of providing subsidy for council housing, and its impacts, including those on rents, for this year. The system is complex, and if there is anyone around who sees it as fair or transparent, they are keeping very quiet about it. The Government want to ensure that there is a long-term sustainable system for the future that is fair and affordable for councils, tenants and taxpayers, so a widespread review has been looking in depth at the cost of the landlord business, rents and the use of surpluses, redistribution and the background issues that influence the position in Lambeth and elsewhere. I hope that we will have the report of the review soon.
Whatever comes out of the review, I accept that it is vital that the council puts its housing finances on a better footing for the future. I am grateful to my hon. Friend for saying that both Lambeth’s Members of Parliament and its tenants have concerns about that. As local authority and landlord, that is something for which the council has full responsibility. However, I share the concern expressed by my hon. Friend about how working council tenants, many of whom are among the least well-off in the community, can be expected to cope with very high rent increases in the present economic conditions.
Having recognised that, on 6 March I announced that the Government would consult on the overall position with regard to local authority rent increases. Guideline rent increases of just over 6 per cent. for 2009-10 and 2010-11 had initially been agreed with local authorities, after consultation, in order to give what was felt at that time to be much-needed certainty to local councils in planning their future budgeting and their spending on housing. Since then, of course, inflation has fallen very sharply, and it became clear that it would be wise to look again at the position to see whether we could provide help and assistance to council tenants. We had many representations expressing concern about the widening gap between the assumptions made by the Department last September and current levels of inflation.
Because, as a Government, we listen to the concerns that stakeholders express, we accepted that, if at all possible, something had to be done to address the situation, and we reacted quickly. First, I promised to look again at the guideline rent increase for the second year—2010-11—in the full understanding that the certainty that had been thought to be more desirable than anything else was beginning to look less desirable. I then began
urgently to investigate the options to offer reduced guideline rents for 2009-10. The system is, as I have said, very complex, and we had to spend some time exploring the financial consequences of the different options. Having done so, and having successfully negotiated the necessary resources, I immediately announced our decision. It is our intention that any council reducing its actual rent rises for 2009-10 in accordance with the level of its average guideline rent reduction—from just over 6 per cent. to just 3 per cent.—will be compensated through increased subsidy, to pass on to the tenant through reduced rent rises.
I will take this opportunity, if I may, to refer to the point that has been raised on this issue—we have not revisited local authorities’ allowances, which were set in the original subsidy determination last autumn. They were set, as were the guideline increases, according to inflation assumptions at the time, which were at a significantly higher level, and consequently the allowances are much more generous than they would be if they were calculated now.
Overall, this is a generous offer of improvements for tenants on the maintenance of the funding available to councils to help them to manage their own administrative responsibilities. I hope to see all councils take advantage of this opportunity to help their tenants by lowering their rents in these difficult economic times. I fully accept that, as my hon. Friend has said, against that background the dilemma faced by a council in Lambeth’s position is particularly acute. It wants to help its tenants, which neighbouring boroughs may be able to do, but it needs to raise significant sums to tackle the complex and serious underlying problems in its housing finances.
Of course, whatever the guidelines, all councils are free to make their own decisions on the actual rent levels that they set in their particular circumstances. However, we are keen to see what can be done to help councils that wish to provide a better deal for their tenants to lower their rent increases. Our general consultation on the guideline rent reduction ends today, and we are now analysing the responses, so I have yet to establish the level of take-up of our offer or to fully assess the issues that councils have raised in responding. We will carefully consider all the responses, particularly Lambeth’s, when we make the final subsidy determination.
My hon. Friend was kind enough to say that she believes that I want to help find a way forward, if at all possible. She is absolutely right about that, because I recognise the strength of the case that she has made. She referred particularly to the rental constraint allowance and to Lambeth’s request for a special determination to make an adjustment to increase its rental constraint allowance bearing in mind that it uncoupled service charges from rents in 2007-08. She touched on the fact that that could perhaps deal with councils that are in that general position
It might help if I try to clarify the position. The rental constraint allowance was introduced for a limited period only, between 2006-07 and 2007-8. The purpose of that introduction was to meet a specific Government aim of enabling councils to keep their actual rent increases down to 5 per cent. in those years. Although I recognise the argument that Lambeth is putting, I understand that there was never any intention that the rental constraint allowance itself should be a means of encouraging local housing authorities to separate service charges from
rents—de-pooling—in the way that some authorities, although not Lambeth, did at the time. Any benefits that authorities might have derived from de-pooling during the relevant period when the allowance was in place were coincidental.
That suggests that Lambeth has not been treated differently from other local authorities. I know that my hon. Friend will recognise, however reluctantly, the problems that would be caused if Lambeth were treated differently. It is impossible for any Government not to treat all councils fairly and to make particular exceptions because of unique circumstances. However, I assure her that we are prepared to listen and have been doing so, as she was kind enough to acknowledge.
We are already providing sector-led support through the Government office for London to help Lambeth to take forward the progress that it has made and build on its achievements so far. As my hon. Friend acknowledged,
Department for Communities and Local Government officials have very recently met council officers, and we are considering very carefully all the issues that they put to us.
I know that it will be disappointing to my hon. Friend that I cannot say today that we have found a way forward through the path that she identified, but I assure her that I will continue to examine these issues very carefully with officers, representatives of the local authority and my parliamentary colleagues. We will reply quickly to Lambeth’s response to our subsidy consultation, and I will continue to explore whether there are ways in which, without breaching the normal methods of handling problems that arise in local authorities, we can alleviate the real problems for Lambeth’s tenants that she so eloquently identified.
2.57 pm
| Index | Home Page |