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Ealing and Northfield

Council rents to go up

Tonight we had the first council meeting since the election. This was an extraordinary meeting called by the new Labour administration to discuss one motion:

This Council resolves that with immediate effect its support for privatising the Management Contract of Ealing Homes is removed. The Council mandates officers to immediately draw up proposals to return Ealing Homes to direct management by the Council.

There was a rumbustuous debate and this evening the Conservative group issued the following statement:

LABOUR SIGNALS INFLATION BUSTING RENT HIKES FOR TENANTS WITH COUNCIL VOTE

Ealing’s incoming Labour administration this evening signalled hefty hikes in rents for Council tenants to pay for the costs of bringing housing management to direct Council control.

At the first Council meeting following Labour’s win at the local elections, Labour councillors voted to bring Ealing Homes back in-house. This changed policy from the previous Conservative administration which would have let not-for-profit organisations with housing expertise manage housing, and given tenants the right to sack their manager if they were not satisfied.

Council Officers have said that the policy of the Labour administration will leave a funding gap of around £3M as increased costs are brought in-house as a result of changing systems and funding pensions. The increased costs will add around £165 to the average Council tenant’s bill if Labour chooses not to cut the maintenance budget or the regeneration programme started by the previous Conservative administration.

Leader of the Opposition, Cllr Jason Stacey said he was disappointed that Labour had not accepted his amendment to cap rents at a rate of increase not greater than inflation. He said:

“Labour have every right to change the way they manage Council services, but it was plain from the debate tonight that when it comes to Council housing they are driven more by ideology than wanting to keep down costs or improve the level of service for Council tenants.

“In four years of control, Conservatives managed to keep Council rent increases below the rate of inflation. The reason Labour can’t and won’t make this same commitment is they know that bringing the service back in-house will be more expensive for tenants.”

7 replies on “Council rents to go up”

Phil

What you do not say is whether all the increased costs will be borne by just the Council tenants or whether some of the costs wil/may get lumped onto Council Tax.

Without a proper review of options, the decision is cynical from a taxpayer’s viewpoint.

Secondly as I know you love stats, there are some 13000 Council properties in the borough

http://www.communities.gov.uk/documents/housing/xls/table100.xls

And there are some 31,000 people (Nov 2009), excluding I think Pension Credit, drawing DWP benefits.

https://www.nomisweb.co.uk/reports/lmp/la/2038431880/subreports/dwp_time_series/report.aspx

That suggests to me that a great number of Council tenants may well not see the difference as Housing Benefit paid for by the coalition may well foot much of the bill. So for many perhaps there will be a silver lining in the cloud – as seen from the tenants viewpoint.

Thirdly 13000 tenancies times an average of £168 is closer to £2M rather than your figure of £3M. Are you having a Taylor moment? We know you love them!

Fourthly there is fairly often a difference between Council and Housing Association rents. Is it fair that a Council tenant should be better off than a Housing Assoc tenant?

The real question is will the management lose control. That is why in my recent posting I have asked if you know about how the system can be scrutinised bottom up.

Glad that you have started on a rumbustuous note. Keep blogging.

Current law means that the Housing Revenue Account has to be kept separate from the General Fund (which is partly funded by Council Tax). This means that any increase in costs of housing should be contained in the HRA and borne by tenants and leaseholders not CT payers.

There are a little over 13,000 tenancies plus close to 4,879 leaseholders making a total of just under 18,000 people who will be impacted by this decision. If the Labour Council passes costs on equally to tenants and leaseholders that is indeed about £168 per tenant and leaseholder.

The cost is obviously an important factor for tenants and leaseholders, but service is just as important.

I’m afraid it is back to the bad old days of Ealing council running housing. Labour are depending on peoples memories failing them.

When Ealing housing was last ran by the council, customer satisfaction was very low.

Why Labour think it will be any better is a mystery to us all. they certainly didn’t tell us why at last nights council meeting.

Maybe detail is not their strong point

Does the change to bring things back in-house also add a financial risk to the general Ealing CT payer (ie private home owners who are neither council tenants or leaseholders) ?

I recall that in the past Ealing (either council or ealing homes) were fingered for being particularly inefficient at collecting the rents due. I presume the implication of that is the shortfall from non-payment gets clawed back from the rest of us?

Jon,

Para 166 of the last Audit Commission report on the ALMO said:

While rent collection has improved and is close to the performance of the best ALMOs in London, there are weaknesses in the collection of service charges. Arrears of revenue service charge increased from £328,000 in 2006/07 to £1,343,000 in 2007/08; the collection rate for these charges is 72 per cent. In 2007/08, EH collected 62 per cent of the capital charges outstanding, and current targets will only start to reduce major works arrears in 2010/11. This represents a loss of potential resources to the ALMO.

So rent collection is OK but there is a problem with persuading leaseholders that maintenance bills are good VFM – hence the collection problem.

All this has to be contained in the HRA and in theory should not blow back on the general fund (ie council tax).

Report here.

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