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Government abandons mandatory pay to stay 24/11/2016

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 aims.


Local authorities and housing associations will continue to have the discretion to implement the policy for tenants with incomes over £60,000.


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.


John Bibby comments:


"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."

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