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ARCH annual report

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The ARCH annual report for 2015-16 is now available to view.

 

Download it here.

Compulsory "pay to stay" 04/09/2015

In the last bulletin, we asked if any of our members operating a voluntary "pay to stay" scheme could let us know so that we could learn the lessons from that scheme to help inform our response to the government's detailed proposals for the introduction of a compulsory scheme. We're grateful to those councils who have responded and would still be interested in receiving information from other members. Click here for information on how to respond.

 

ARCH members are generally concerned at the plans to implement a mandatory scheme and the ARCH policy stance is that we would much prefer that the introduction of such a scheme should be a matter for local determination. However we recognise the government's determination to press ahead with the introduction of a mandatory scheme and we've contacted DCLG officials to confirm that we would be interested in working with them to address the practical mechanics of how such a scheme may be designed and implemented to avoid unnecessary bureaucracy and administrative work and costs.

 

Our members are particularly concerned that the proposed lower income thresholds will significantly increase the number of households impacted by the mandatory scheme. The original pay to stay consultation paper (June 2012) estimated that only between 12,000 and 34,000 households earned more than £60,000pa. The much reduced threshold of £30,000 (£40,000 in London) will inevitably bring a much greater number into the net and add significantly to the administration costs in assessing income, collecting additional rent and monitoring compliance - even more so if some form of "tapered" progression to market rent, based on income, is to be proposed.

 

We're also concerned that the lower "high earning" threshold proposed for the mandatory scheme, when linked to the government's agenda to substantially increase the National Minimum Wage/introduce a National Living Wage (NLW), will mean that unless thresholds are increased in line with the move to NLW, most dual earning households will quickly exceed the proposed threshold and will soon see any benefits of an increase in NMW or move to a NLW eroded. The government's own forecasts contained in the summer Budget papers show that the impact of the announced changes of personal tax, welfare and the National Minimum Wage/National Living Wage will mean that a dual earning family - couple with two children each working 35 hours per week for the new National Living Wage will have a net income of £33,730 by the end of this parliament - way over the £30,000 threshold beyond which they will be expected to pay a market rent.

 

We've contacted DCLG officials to seek a dialogue on these and other practical issues in implementing a compulsory "pay to stay" scheme based on relatively low income thresholds of £30,000pa (£40,000pa in London) - particularly as in most regions household income at those lower income levels will not support a move to owner-occupation resulting in many hard-working families facing a significant additional tax in the form of big rent increases far outweighing any increase in the NMW/NLW and providing a huge (I'm sure unintended) disincentive to work.  

 

The ARCH views are echoed to some extent in a House of Commons Library briefing paper on pay to stay for MPs published last week which ARCH members may find useful. This briefing paper highlights the fact that the English Housing Conditions Survey 2012/13 recorded some 484,000 households in social housing with incomes of over £31,200 indicating that a significant number of tenants (1 in 8) may be affected by the introduction of a mandatory "pay to stay" scheme and be forced to pay higher market or near market rent. 

 

House of Commons briefing paper: pay to stay.

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