The DCLG has published their response to an earlier consultation
on the introduction of a mandatory 'pay to stay' scheme for council
The government has decided that social housing tenants with
household incomes of £30,000 or more (£40,000 in London) will
require an increased level of rent for their accommodation.
The scheme was originally proposed to be mandatory for both
council tenants and housing association tenants, however it will
now only apply on a mandatory basis to council tenants. Under the
proposals contained in the Housing and Planning Bill, it has
subsequently been announced that housing associations will have
discretion as to whether to introduce the scheme for their
The government received a total of 509 responses to the
a response from ARCH.
In their response to the consultation the government has now
- They will apply "tapers" to incomes above the minimum income
thresholds of £30,000 (£40,000), however, they have not given any
firm indication of what those tapers might be other than they will
be designed so that households at the lower end of the income,
above the proposed minimum thresholds, will see their rent rise "by
only a few pounds per week".
- Households in receipt of housing benefit will be exempt from
the policy and the government will consider links to Universal
Credit as it is rolled out.
- Before paying over any additional rental income collected from
tenants, councils will be allowed to retain "a reasonable amount
for administrative costs" from any additional rental income. This
is to cover costs relating to updating IT systems, additional
staffing costs, collection of income data and creating new rental
agreements. The government has not said what level of costs may be
retained stating this will be subject to further discussion with
the sector about what a reasonable level would be.
View the government's consultation response "Pay to Stay: Fairer Rents in Social
"The response from the government on these issues clearly
underscores their intention to press ahead with the introduction of
a mandatory 'pay to stay' scheme. It is particularly disappointing
that the government has failed to listen to calls from ARCH for the
minimum income thresholds to be raised and unless they are the most
dual earning households in receipt of the new National Living Wage
will soon find themselves having to pay more rent.
The exemption of tenants in receipt of housing benefit will
reduce the administrative burden on councils and the acceptance of
the need for some form of taper to reduce the impact on hardworking
tenants is to be welcomed. However, this will only add to the
complexity of administering the scheme as tenants incomes change.
The introduction of Universal Credit (UC) may yet complicate
matters as tenants transfer onto UC.
The failure to provide any details of the proposed tapers is
equally disappointing - the government has had long enough to think
about this and at this stage they ought to be more open and
transparent in their response to enable councils, and more
importantly their tenants, to understand how this will affect