Swindon Tenants Campaign Group has written to Swindon Councillors calling on them to support a 1.2% rent increase instead of the proposed above inflation increase of 2.2%. (Inflation for rent purposes is based on the September inflation level.)
I am writing to you on behalf of Swindon Tenants Campaign Group, asking you to support a Council rent increase of 1.2% (CPI inflation) for the year 2015-16.
The proposed increase of 2.2%, although it doesn’t sound too bad compared to some of our recent increases, is still 1% above the September inflation rate of 1.2%. Since then, of course, inflation has dipped further.
Whilst the Council has implemented a Council Tax freeze for the last four years, in contrast tenants’ rent has increased by an average of just under 24% over the same period. Additionally, since 2011 void properties have had their rents raised to the ‘target rent’1. Consequently increases overall have been above the percentage set for existing tenants. So for example, the increase in 2012/13 was 10.4% (according to the figures provided by the Council to the Department of Communities & Local Government).
Working age tenants on benefits have suffered a couple of blows; the ‘under-occupation regulations’ and the payment of a minimum of 20% of their Council Tax as a result of the government cut. We know how tenants are struggling. We had an increase in damp and mould which in some cases was related to tenants not putting their heating on very often because they struggle with the bills. A member of staff was struck off to deal exclusively with this problem. The choice of ‘eating or heating’ is a reality for some of our tenants.
In justification of high rent increase we are often told that it’s not a problem because ‘most tenants’ are on Housing Benefit. However, only around a third of tenants have their full rent covered by HB, and many of those who are in work are in low paid jobs. Reflecting the financial pressures that tenants are under there has been an increase in rent arrears and the collection rate declined from 98% to 96.9%. Above inflation increases are simply likely to produce increased arrears.
Last year the DHP provided by the government was around £350,000, all of which was spent. Only £12,000 of the special fund was used. However, this year the estimate given to the Cabinet was that around £171,000 would be used. The grant this year was £309,000 so that overall around £480,000 will have been paid out. This reflects the worsening circumstances of tenants. Currently we have no guarantee of DHP payments beyond 2015-16.
The Council has said that there would be a shortage of £400,000 for a programme of £16.8 million if the increase was 1.2%. However, the last Cabinet meeting was informed that there would be an underspend on this year’s programme, including an estimated underspend of £249,000 on the special fund of £420,000 in this financial year2. So the ‘shortfall’, if it materialises at all, would be much smaller.
In trying to sell the ‘need’ for a 2.2% increase the Council has said that a 1.2% rent increase would mean that ‘many’ tenants would not have their bathrooms or kitchens renewed. This is scaremongering. We have been told that around £1 million has been saved on contracts for kitchen renewals for the new financial year. The programme for last year and this is for 530 replacements. Remember we were told at the time of the ballot that the Council would only be able to renew 150 kitchens and 150 bathrooms each year for 10 years! Last year it was implied that an above inflation increase would mean more bathrooms and kitchens would be renewed but the programme didn’t increase at all despite the above inflation rent increase.
It is, of course, true that the higher the rent increase the more work the Council would be able to do, but whether tenants can afford this is another matter. Above inflation increases do not sit very comfortably with the CT freeze. The Council said that the freeze has been in recognition of the difficult economic circumstances that CT payers are under. So why are Council tenants treated differently? Above inflation increases year after year are unsustainable, both in terms of the financial pressures tenants are facing and the arrears that will result from such increases.
Swindon Tenants Campaign Group is calling on you to give due consideration of the financial circumstances that tenants face (we are, of course, CT payers too) and support a 1.2% increase for 2015-16. Such an increase is easily manageable and does not mean a smaller programme of work.
Secretary, Swindon Tenants Campaign Group
January 22nd 2015
1This is the level associated with the ‘rent equalisation’ process which was designed to push Council rents up to the level of Housing Association rents.
2This fund was financed from the Housing Revenue Account to provide monies additional to the government Discretionary Housing Grant.