Councillors demand clarity on rents for new council homes

Backbench councillors have called for more clarity on housing affordability after campaigners again pushed for a rethink of plans to hike rents for council-owned homes.

Haringey Council’s plans to allocate 870 homes in its housebuilding programme for London Affordable Rent – a higher level than council rents – were revealed in draft budget papers approved by cabinet members last week.

The move prompted campaigners and local Labour members to accuse the administration of breaking a key manifesto pledge to build 3,000 homes at council rents. Up to now, the council has used lower-cost ‘formula rents’ but claims worsening economic conditions mean it needs to change its approach to ensure financial sustainability.

The plans were discussed during a meeting of the council’s housing, planning and development scrutiny panel on Monday. Paul Burnham, from campaign group Haringey Defend Council Housing, told the panel that the cost-of-living crisis was “not the time to be promoting much higher rents for 870 Haringey Council new-build council homes”.

He added: “There is a large and widening gap between new homes rent and the rents of the existing stock, with new homes now more than £60 per week higher on average. This is a bad thing, and it should be an objective of the council to prevent this from happening.”

Paul claimed London Affordable Rent was a “discredited” model that was being “withdrawn by the mayor of London for new tenancies”. He also called for tenants to be consulted on “the £98million in rents and £12m tenant service charges within the annual budget”, before urging the council to “stand up to government and to lobby government for the investment that local people need”.

During a discussion of the proposals, Labour panel member Charles Adje asked what the council was doing about the mayor’s plan to withdraw the London Affordable Rent model.

Ruth Gordon, cabinet member for housebuilding, placemaking and development, said in response that the council understood London Affordable Rent would only be available until March next year. After that, the authority would have to use formula rent “unless the mayor [of London] comes forward with another alternative”.

Cllr Gordon added: “We are essentially using it where we can. That is why it is going to cover 870 homes. Obviously our ambition is to build 3,000 homes, so it is a sizeable minority, but a minority of the homes will be at London Affordable Rent.”

Liberal Democrat panel member Dawn Barnes raised concerns over the draft budget’s provisions for bad debt for tenants – estimated at more than £3m during the next two financial years – suggesting there would be a “shortfall” and people would “struggle” following the move to higher rents.

Cllr Gordon said London Affordable Rent was “well below the local housing allowance, so those people who are on housing benefit or the housing part of Universal Credit will be covered by that”. She added: “We think there might be a small number of residents that are affected by the benefit cap, but we think that is a very small number of about ten.”

Cllr Gordon said the local authority could provide advice, and sometimes financial support, to people struggling to bid for the new homes.

Dana Carlin, cabinet member for housing services, private renters and planning, said utility bills would be lower because new homes are built to better environmental standards. She also claimed residents would be paying “far less” if they moved from temporary accommodation to a London Affordable Rent property, and that for residents on housing benefit “the government is going to be paying the higher rates”.

Labour panel member Tammy Hymas said Labour had committed to 3,000 council homes at council rent, and that London Affordable Rent was “a different type of product”. Cllr Hymas said the budget papers stated there was no “requirement” for consultation on rent levels but pointed out that the council was committed to “co-production” and asked what consultation would be carried out.

Cllr Gordon said the London Affordable Rent homes would be offered on secure council tenancies, only those on housing register would be able to apply for them, and the grant funding used to build the homes would come from the mayor’s ‘building council homes for Londoners’ scheme. She said: “I think on all of those measures it is council rent”, adding that London Affordable Rent was “accepted in terms of planning as council rent”.

Despite the assurances, the panel agreed to recommend that the council provide clarity on the specific rent levels being offered – such as London Affordable Rent and formula rent – rather than referring generally to ‘council rent’ in its communications. They also asked for more details on the affordability of the different levels. However, members did not formally object to the proposal to charge London Affordable Rents.

Panel members raised further concerns over a savings proposal in the budget papers to “use more one-bedroom social housing as temporary accommodation for families with a baby or young children”. The panel agreed to call for the proposal to be limited to families with one child only and for the council to carry out an annual review on the suitability of the size of the accommodation.