Should better off council tenants receive subsidy

Guest101

TheGardener wrote: »

So in terms of cost - how is this administered then? So you get a family to move out - 18mths later the main earner is made redundant/killed in an accident/gets cancer - the family cant afford the rent/mortgage so they end up back on the housing list - it would just become a revolving door for some. Once you had council housing - then you can't ever apply again then? Well that just creates a load of folk who end up homeless.

Then you fill all the empty houses with unemployed/elderly/single mums - then you have an unbalanced community where those working were paying full rent and keeping their gardens/doing their own repairs and improvements are moved on and the housing repairs bill goes up. Moving out those who are earning decent money simply take us back to the days of 1970's sink estates.

I wish people would think these things though before they start on beating up anyone who has something they haven't got. The fact the government have kicked 'pay to stay' into the long grass is testament to the question; how do you administer it - have an army of staff who wade though 1000's of P60's every year - and an army of tenants who deliberately reduce their income to prevent being evicted? Where is the cut off point - 30K, 40k??
The real answer is more social housing.

Whilst I agree with most of what you said, tax records are (and have been for a while) electronic, there would be no need to wade through P60s

TheGardener

Guest101 wrote: »

Whilst I agree with most of what you said, tax records are (and have been for a while) electronic, there would be no need to wade through P60s

missing the point a little - moving tenants on is and releting a property is a process that needs a great deal of administration overall - at a time when there a significantly less LA staff to deal with it.

molerat

Guest101 wrote: »

Which council - I'm keen to see this. (that means a 225m housing budget funding solely on council rents)

No it doesn't. It means raising the rents by 4% will allow them to fund a £9M project, it will not produce £9M of capital. It will add £1M to this year's rental income allowing the builds to be carried out this year, the increased income funding the project over a number of years.

Guest101

molerat wrote: »

No it doesn't. It means raising the rents by 4% will allow them to fund a £9M project, it will not produce £9M of capital. It will add £1M to this year's rental income allowing the builds to be carried out this year, the increased income funding the project over a number of years.

Hmm:


My council's housing budget is self funding from rent income, this year increasing by 4% to fund a £9M new build project.


Budget is the subject of the sentence, not rents, so that is how I read it.


in anycase - which council?

Guest101

TheGardener wrote: »

missing the point a little - its a process that needs a great deal of administration overall - at a time when there a significantly less LA staff to deal with it.

I agree with the sentiment, but there's no point creating costs that wouldn't exist.


Overall I agree with what you said

TheGardener

Most councils have self financing housing revenue accounts - the Gov told councils in 2015 that they MUST reduce council /social housing rents by 1% per year for the next 3 years. This means the revenue account takes a big hit but of course - it doesn't apply to the private landlords! Of course the real win here is that housing benefit bill nationally is reduced significantly.
If all social housing only has tenants who are in receipt of HB - then the housing associations business model would fail - the economics of it are that social housing needs people who earn enough to pay their own rent.

AdrianC

TheGardener wrote: »

Does it say the CT payer subsided it?

It's coming from somewhere... The LA's income is relatively fixed - unless they wish to go for a council tax referendum... There are a number of sources, but the bottom line is a certain amount of income per annum. And that income is spent in various directions. If £3.3m is spent on plugging the gap between expenditure and revenue, that's income that could be spent elsewhere.

Our local council show a similar account - expenditure greater than revenue - but the CT payer had nothing to do with it - environmental street improvements funded from the land fill tax made up the difference. Most HA's and councils have cost neutral housing revenue accounts.

Except you've just stated that yours isn't cost-neutral. It's a negative profit centre. It costs the council money. That money happens to come, in your LA's case, from a particular income source. But that's income that could be being spent elsewhere, if it wasn't covering the loss made on housing.

martinsurrey

molerat wrote: »

My council's housing budget is self funding from rent income, this year increasing by 4% to fund a £9M new build project.

That just means they are making no money on million/billions of assets.

Renting a house out that you own for £100 a month, with costs of £90 a month would "cover the budget", but if you could rent it out for £1,000 a month on the open market, you are subsidising the tenant to the tune of £900 per month.

Tammykitty

martinsurrey wrote: »

That just means they are making no money on million/billions of assets.

Renting a house out that you own for £100 a month, with costs of £90 a month would "cover the budget", but if you could rent it out for £1,000 a month on the open market, you are subsidising the tenant to the tune of £900 per month.

No you are not subsidising the tenant to the tune of £900 a month - you are not giving the tenant money, you are making £10 profit.


Being not for profit is not the same a subsidising.


Subsidy -
a sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low






Housing benefit in my area caused private rentals to increase - as all landlords charged a minimum of the local rent allowance

martinsurrey

Tammykitty wrote: »

No you are not subsidising the tenant to the tune of £900 a month - you are not giving the tenant money, you are making £10 profit.


Being not for profit is not the same a subsidising.


Subsidy -
a sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low



Housing benefit in my area caused private rentals to increase - as all landlords charged a minimum of the local rent allowance

world trade organisation defines subsidy

the world trade organisation definition of a subsidy includes the provision of goods, in this case goods of value £1000 a month are provided for £100.

i'll take the internationally agreed definition.