Councils need new powers if higher earning tenants are to pay extra: ARCH

Legislation is essential if the Government wants councils to operate higher rent schemes for social housing tenants with the highest incomes, the Association of Retained Council Housing (ARCH) has said.

ARCH, which represents councils that have chosen to retain ownership of council housing and manage it directly, pointed out that councils currently have no powers to require tenants not applying for or in receipt of benefits to disclose their incomes.

This makes it “impossible to identify tenants to whom a higher-rent policy might apply”, the Association said in a response to a Department for Communities and Local Government consultation, High-income Social Tenants: Pay to Stay.

ARCH also argued in its response that:

• Council rents policy was primarily a local matter on which councils should be free to decide, with their tenants and other local stakeholders, what approach to take;
• With the implementation of self-financing, central government no longer had a financial interest in council rents. “Assumptions about future rent levels were implicit in the debt settlement for each council, but now councils are, or should be, free to decide on future rent levels and use rent income for local benefit as they choose. This principle is reflected in the fact that government guidance on rent setting is not, and should not be, statutorily binding”;
• From a localist perspective, it was not appropriate for the Government to approach the question of higher rents for high-income social tenants “as if there were one right policy which should be followed by all councils, and presumably housing associations”;
• Some councils might wish to charge higher income tenants more, others would not want to. “There should be no expectation that all will do the same, nor that all will use the same income threshold or method of calculating the appropriate rent”.

The Association added that the Government might choose to develop a model scheme and recommend it to councils, but this job could equally well be done by the sector and its professional and representative organisations.

“The question the Government should be focusing on is whether councils have adequate powers to operate a scheme for charging higher income tenants more, should they choose to,” the submission said.

The closing date for the DCLG consultation was 12 September. It invited views on the commitment made in the Government’s Laying the Foundations, A Housing Strategy for England to tackle the “problem” of households earning high incomes who continue to occupy subsidised housing.

The consultation paper invited views on issues such as: the income threshold above which high income tenants might be asked to pay a higher rent; what the higher level of rent should be; disclosure of income by tenants; and whether the policy should be voluntary or compulsory for social landlords.

Philip Hoult