Though the burd hopes they bloody well roar, preferably at the ballot box.
Every year, the annual budgets for Housing Revenue Accounts (HRA) sneak through, with scarcely a comment from the media. Yet, there are still significant numbers of Scots living in council housing, with 323,100 homes owned and rented out by local authorities. Despite the much vaunted trend for stock transfer in the first half of the decade, only six of a possible 32 – Comhairle nan Eilean Siar, Dumfries and Galloway, Inverclyde, Argyll and Bute, Scottish Borders and perhaps most controversially, Glasgow – took the plunge.
In setting rents, nearly every local authority follows a formula, whereby annually rent charges are increased by RPI (Retail Price Index) + 1%. The figure for RPI is taken from the end of September every year and in 2010, this amounted to 4.6%. Interestingly, local authorities use the RPI that includes mortgage interest payments and has not followed the UK Government’s lead in shifting to using the CPI (Consumer Prices Index) as its inflation monitor. This latter point matters because in September last year the CPI stood at 3.1% which in theory might have led to lower rent increases.
So, same formula leads to same rent increase nationwide? Eh, no. Local authorities do the sums then tend to ignore them. The marginally good news for tenants is that many do so in order to keep increases lower. This happened for 2011-12 with a Scotland average rise of 4.9%. But there are many extremes to be found in order to reach this, as the table below sets out (with apologies for rubbish pasting).
|Local authority||%age||Local authority||%age||Local authority||%age|
|Aberdeenshire||5.5||Edinburgh||7.6||Perth and Kinross||5.1|
|East Ayrshire||5.7||Midlothian||6||South Lanarkshire||4|
|East Lothian||4.3||North Ayrshire||5.5||West Dunbartonshire||4.5|
|North Lanarkshire||1.5||West Lothian||4|
No council froze its rent levels this year; North Lanarkshire – who would have thunk it? – came in with the lowest increase of 1.5% while Orkney voted through an eye-watering 10.6%. The mythical formula should have produced increases of 5.6%, yet 21 local authorities introduced rises below that level. Special mentions deserved for East Ayrshire (5.7%), Edinburgh (7.6%), Clackmannanshire (6.6%) and Midlothian (6%) who also ignored the formula in order to punish their tenants more.
But few deserve any praise. The maxim for rent setting this year should have been to do better with less, to notice that tenants are likely to face financial pressures elsewhere and commit to protecting them as much as possible. Instead, tenants will have to pay more to keep a roof over their heads, resulting in scrimping and scraping on other essentials for many. Worse, some councils have decided to charge tenants more while cutting expenditure on repairs and maintenance. Some have even had the cheek to raid the HRA reserves to move money into General Fund expenditure, which benefits all residents.
Local authorities can, and do, justify the need for rent increases. They have enormous debts to service (just when is a Scottish Government going to do something to help get this written off?); there are minimum housing standards set by the Scottish Government to be met by 2015; there are wages to be paid; and aspirational refurbishment programmes to be completed. And of course, tenants support the increases. They were asked, though let’s conveniently ignore that the level of survey response was in single figures and the fact that sadly, too many tenant representative committees fail to represent much more than their own views.
The hoariest of all the excuses is that few tenants actually pay full rent: over 60% of tenants have their rent subsidised in whole or part by housing benefit (now local housing allowance) and most will be unaffected by a rent rise. But such an approach does a disservice to the not insignificant minority who do pay rent. They tend to be older people on small private pensions that take them over the benefits threshold, resulting in them paying through the nose for everything. They tend also to be the working poor – people on low incomes, dependent on tax credits to get by, often families with children, and the Joseph Rowntree Foundation has already indicated that child poverty amongst such families is on the rise.
Reading HRA budget reports is like visiting another planet. There is scant regard for the financial pressures affecting tenants and their families and precious little analysis of how the forthcoming radical reshaping of welfare might or might not affect them in the longer term. Instead, there is considerable detail on the fiscal constraints facing local authorities and technical analysis of the various funding and rent options. It is an approach aboslutely intended to curtail elected members’ curiousity and usher in consensus, all the while ignoring the needs of the real people councillors and officials are purportedly there to serve. Succinctly, the whole process captures all that is wrong with the public sector and emphasises the need for reform.
Wearily, we might expect such callous indifference from officials grown fat and comfortable on salaries well in excess of the national average, but for elected members, who are supposedly politicians, in this an election year, to lose sight and touch with the people who vote for them and their party colleagues, is bemusing. Or it would be if it were not for the very real distress these rent hikes will cause to many tenants.
Bemusing? Sorry, that’s the wrong word. How to describe the squeezing of council tenants through massive rent increases in the current economic environment? Shameful.