Cllr Penny Shelton has written to the Government’s new Housing Minister in support the LGA’s call for a transformation in the way that social and affordable housing is financed.
In advance of a national housing conference, the Local Government Association announced that local authorities in England should be allowed to keep all of the revenue raised by local council tenant rents.
Kingston’s Executive Member for Housing, Cllr Shelton commentated: “The LGA have carefully outlined what we in Kingston have been shouting about for years!
“A fairer system of housing finance would demand that local authorities are allowed to keep housing revenue to re-invest in the upkeep and improvement of our current dilapidated housing stock.”
“Kingston Council is forced to pay a huge tax on its housing income: more than 30p in every £1 received is given direct to the Government for redistribution, a levy which will total £6.6million this year. It is outrageous that our low-income residents should subsidise the Treasury’s budget and properties in other parts of the country.”
She added: “I have written to the Housing Minister, John Healey outlining my concerns and asking for a commitment to give our council rents back.”
Text of letter sent by Cllr Shelton to the Housing Minister
Minister for Housing
Department for Communities and Local Government
Thursday, 18 June 2009
Dear Mr Healey,
As the Lead Member for Housing in the Royal Borough of Kingston upon Thames, I’d like congratulate you on your new Ministerial position in the Department for Communities and Local Government.
I would also like express my joy in reading the recent statement you made on council housing rents, telling the BBC that you were “well-disposed to the idea of councils keeping more of their [rental] income” (BBC news site, 16 June).
I fully support the Local Government Association’s call for you to scrap the Housing Revenue Account system, and I hope you will follow up from the above remark with a robust strategy to fundamentally reorganise the financing of social housing in the United Kingdom.
Under the current system, Kingston Council is forced to hand over a huge tax on our locally raised rental income to your Government for redistribution. At present, our negative subsidy payments are set at more than 30p in every £1 of rent received and will total £6.6million in 2009. Whilst we understand the need to fund council housing throughout the country, our lowest-income tenants – many of whom live in poverty and deprivation - effectively subsidise others peoples’ living arrangements as well as the Treasury budget.
I feel and hope you agree that this cannot go on.
From 2001 to 2007/8, Kingston’s HRA levy totalled £30million: this was a huge drain on our housing budget and devastated any attempt to maintain, let alone improve, the standards of our dilapidated housing stock.
The LGA are calling for greater investment and local control in social and affordable housing projects. I echo their demands, and ask for you to clarify your intentions with the rental revenue of tenants in Kingston’s council properties and housing estates.
I look forward to hearing from you.
Cllr Penny Shelton
Executive Member for Housing