The government has decided to abandon plans for the introduction
of the mandatory pay to stay scheme for council tenants.
The government introduced powers in the Housing and Planning Act
2016 to provide for an income based rents policy, requiring Local
Authorities to set higher rents for higher income council tenants
with household incomes of over £31,000 (£40,000 in London).
Councils have been waiting for detailed Regulations since the
Act received Royal Assent in May 2016. Following the appointment of
Theresa May as Prime Minister and the appointment of a new
Ministerial Team at Department for Communities and Local Government
(DCLG), Ministers have been reviewing this policy.
In a Written Ministerial Statement to the House of
Commons made on 21 November, Gavin Barwell, Housing Minister, said
the government had listened carefully to the views of tenants,
local authorities and others and as a result has decided not to
proceed with the policyin its current compulsory form.
In the Statement, the government goes on to say it remains
committed to delivering its objectives in social housing and
ensuring that it is prioritised for those in most need of housing;
but in a way that supports those ordinary working class families
who can struggle to get by, and in a way which delivers real
savings to the taxpayer. The new government under Theresa May,
accepts that the policy as previously envisaged did not meet those
Local authorities and housing associations will continue to have
the discretion to implement the policy for tenants with incomes
The Ministerial Statement makes it clear that the government
intend to press ahead with other provisions in the Housing and
Planning Act 2016 to introduce mandatory fixed-term tenancies. In
doing so, they will make it clear that councils should take into
account a household's financial circumstances when reviewing
tenancies at the end of each fixed-term to ensure tenancies are
still targeted on those on lower incomes.
The Ministerial Statement came on the day that ARCH Chair, Cllr
Paul Ellis, and ARCH Chief Executive, John Bibby, met Gavin Barwell
in Marsham Street.
"In seeking a
meeting with the Housing Minister, we argued that pay to
stay was not a manifesto commitment and urged the Minister to
consider making the scheme discretionary for local authorities as
it is for housing associations.
"The decision not to impose the scheme on councils is the
right one in all the circumstances and will come as a relief to
many hardworking council tenants who would have otherwise faced
significant rent increases. Ministers should be commended for
being prepared to rethink this policy.
"Clearly the government intend to press ahead with the
provisions for fixed-term tenancies, and in doing so, it seems
sensible that the review at the end of a fixed-term tenancy is the
right time to assess and take into account households' financial
circumstances and ability to access owner-occupation or other
tenures in the locality to ensure that social rented accommodation
remains targeted on those most in need.
"We've been in touch with DCLG officials to continue a
dialogue with them on drafting guidance for, and implementing the
provisions of, the Housing and Planning Act relating to the
introduction of fixed-term tenancies."