Council rents will go up by 4.95 per cent after councillors were warned by officials that anything less would mean big cuts in the money available for repairs and improvements.
The increase, agreed at Wednesday’s full council meeting, is lower than government guidelines of more than six per cent and means average rents rising in Wigan borough by just £2.96 to £62.76 a week.
At the suggestion of Wigan and Leigh Housing’s tenant board members, money from the rise will go towards a major programme to replace obsolete central heating systems across the council’s housing stock.
In the first two to three years this will involve new energy efficient boilers being installed in 8,000 council properties, saving many tenants around £6 a week on their heating bills.
The improvements will provide much needed jobs for workers in the building industry, helping to support the borough’s economy.
The council insists its freedom to make local decisions has been limited by rules which are forcing above inflation rent increases to bring local authority rents in line with those of housing associations.
Councils are not allowed to subsidise rents from council tax or balances - and if they ignore national guidelines they could be penalised by cuts in the money available to maintain their housing stock.
The council’s cabinet member for Wigan and Leigh Housing, Councillor Terry Halliwell, says:
“Our options were limited and national guidelines largely dictate rent levels. The government was suggesting an increase of over six per cent
“We have done better than that because Wigan and Leigh Housing has done a good job in cutting its own costs and those of its building contractors.”
Cllr Halliwell adds: “Last year we set the second lowest rent rise in the Greater Manchester area and we expect to be one of the lowest again.”
He said this was possible because the government had allowed for a rise of nearly six per cent in the costs for running the housing service, yet for the third year running Wigan and Leigh Housing was seeking no increase. This provides a saving of £912,000 and enables the rent increase to be reduced to 4.95 per cent. whilst still ensuring we can ensure we continue our commitment to ensure we maintain Council housing to the Decent Homes standard.
Tenant members on Wigan and Leigh Housing’s Board, who are elected by their fellow tenants, have voiced their concern over a system that is forcing up council rents to the same level as housing associations.
One of them, Marjorie Marsden, has written on behalf of tenants to the civil servants criticising the proposals. She said:
“We decided the government proposal for six per cent was too much for this difficult year. Fortunately Wigan & Leigh Housing is not raising its management fee giving some flexibility for a lower rise.”
Some two thirds of council tenants are on housing benefit which will cover all or most of the increase, but Cllr Halliwell says he was most concerned about tenants who are working, often in low paid jobs, and pensioners not able to claim housing benefit.
He says:
“There will be some who will call for no rise at all, but this would mean over £21 million cut from the housing budget over a five year period. We would be going back to the bad old days where council houses would deteriorate.
“The good news in this package is that the money from the rent rise will allow us to replace over 8,000 heating systems. We know this should save tenants over £6 a week on their fuel bills and should be welcome after one of the coldest winters in recent years.”
- During 2009 the government is expected to announce options for changing the complex national framework which largely decides rents and how much is available to spend on council housing. The council has pledged to continue lobbying for a fairer system with greater freedoms to decide rents locally.
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