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Pay to stay consultation – how should ARCH respond? Matthew Warburton - 12/07/2012

PayToStay300According to the DCLG there are between 1,000 and 6,000 households living in local authority and housing association homes with incomes above £100,000 a year.  A rather larger number, perhaps 12,000 to 34,000 households, earn more than £60,000. 


The government believes that it is not appropriate for people on very high incomes to enjoy subsidised housing and is consulting on proposals to require or allow landlords to charge such tenants higher rents.


Estimates of the numbers involved are so vague because there are no reliable data on the incomes of social tenants who are not eligible for HB.  Nor is it clear whether councils and other social landlords have adequate powers to require tenants or prospective tenants to disclose income data. 


Consequently the government is contemplating primary legislation to provide such powers, but meanwhile proposing to issue guidance to provide encouragement to councils to charge higher rents to high-income tenants should they choose, which seems a rather back-to-front way of proceeding.


The consultation paper asks whether councils should be allowed or required to operate a pay to stay scheme - but makes no attempt to review the arguments for and against.  If any such scheme is to be introduced, the case for local discretion is overwhelming, at least as far as council homes are concerned.  Local circumstances and local policies vary widely.  While some councils may agree with the government that social housing in their area is a precious resource that should be carefully rationed; others may take the view that better-off working tenants are the precious resource they don't wish in any way to discourage from living in certain local neighbourhoods.


Current government policy is that individual rents are largely a matter for local discretion - at least where HB subsidy calculations are not affected - and it should stay that way.  The consultation paper asks questions about the income above which higher rents might be chargeable and the level of rents which should be charged.  A consistently localist approach would hold that these should be matters for local decision - different answers could well make sense in different areas.


These are just first thoughts.  ARCH will be developing them over the coming weeks with the intention of submitting a response by the deadline of 12 September.  Member councils are strongly encouraged to submit their own responses direct to DCLG, and to tell us what they think ARCH should say.


Please post your views here in the members' area.

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