£143m wiped off Colchester Borough Council’s housing budget over next 30 years by social rent cut
- Credit: Archant
A Government measure to support those in social housing has wiped £143million off the value of a Colchester Borough Council budget in one stroke, the authority says.
In the summer budget chancellor George Osborne announced a 1% reduction in rent for those in social housing, including council homes, over each of the next four years.
Now Colchester Borough Council has calculated the loss of income has removed £10m from the authority’s Housing Revenue Account over the next four years – and will cost it £143m over the 30-year period of its housing business plan.
The council is not alone in this reduction. Greenfields Community Housing, which runs social housing in the Braintree district, will lose even more – an estimated £12.5m by 2020 and £239.9m over the life of its 30-year business plan.
Tina Bourne, borough councillor for housing, said while the measure might make sense in isolation it would have potential knock-on effects for tenants.
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She warned the council had no choice but to put up some associated housing fees and charges – such as service charges paid for maintenance of communal areas – which could in some cases mean tenants would have to pay more than they receive in housing benefit.
Planned refurbishment of two sheltered accommodation schemes will still go ahead, to a lower specification, but a review of other such sites and non-essential repairs would be delayed as Colchester Borough Homes – the council’s arms-length management organisation for housing – would need to spread out its works schedule.
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Another effect would be to stop building of any more homes, even with funds generated from Right to Buy sales.
Mrs Bourne said: “We have about 6,500 properties and we pride ourselves on being good and responsible landlords. We took the decision a long time ago to keep control of our own housing stock, and have recently embarked on a council house building scheme to tackle our waiting list which saw 34 units constructed.
“The 1% does not sound a lot but it adds up. I am sure someone sits there and thinks this is a good idea, but with everything else that is going on it’s the death knell to any local authority who has its own housing.
“It is drastic and desperate for us, and for those on housing benefit – which is also being cut by 1% – it will make no difference.
“But all tenants will feel the impact because of the change in services and improvements we can fund now. Everyone suffers. We want to up-front about it.
“At the same time we are not building housing, and we are selling some because we have to, and our housing stock is being depleted.
“The fees will have to go up, we have to – though we can’t make up all of the £10m. Many will just be brought into line with other local authorities, where ours are lower. Charges will also go up in high-demand places, such as those with garages.”