Government ‘subsidy’ system for Council Housing “disastrous” for Kingston tenants

In advance of tomorrow’s Westminster Hall Private Members' Debate on Council Housing and Rents - Kingston’s Executive Member for Housing Cllr Penny Shelton has spoken out against the “vice-like hold” that the Government’s funding system has on council housing in the Borough.

In support of the debate organised by Liberal Democrat MP Mike Hancock, Cllr Shelton said: “The system by which Councils can own and manage housing – the Housing Revenue Account – and the operation of the subsidy system act together to force the Royal Borough of Kingston to hand over locally raised income to the Government for redistribution. In effect, Council tenants are being taxed to pay for housing in other parts of the country, as well as subsidising the Treasury’s budget.”

“This system takes 31p in every £1 of rent paid in the Royal Borough - £6.7million this year. Per property this is the largest negative subsidy in London. From 2001 to 2007/8 Kingston’s negative subsidy payments have totalled a staggering £30 million. How much more we could have done to keep our homes in good condition if we could have spent the money in our communities.”

Cllr Shelton, whose ward covers Cambridge Road Estates, said that: “It is simply outrageous that the rents paid by Kingston’s tenants, often people who are the most vulnerable and have the lowest incomes, are being levied to pay for the Government’s other budgets - diverting money away from keeping Council homes in a reasonable state.”

In response to comments from Labour Cllr Steve Mama in the Kingston Informer, she stated that “RBK's current housing finance difficulties are actually caused by the ring fencing of the Housing Account and this Labour Government’s failure to understand the devastating effects of its own subsidy system and not on any local budgeting inefficiency.”

“As I have said in the past, the current financial problems are the result of many, many years of lack of investment in our housing stock and the cumulative damage of the negative subsidy. Cllr Mama should face up to reality, stop trying to pin the blame for a national disgrace on the local council and campaign now for immediate return of Kingston's £6.7 million.”

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