Government subsidy causes cutbacks for tenants

Press Release: 19/12/2008

On the House Special Edition


Winchester City Council has today apologised to its tenants after being forced to make cutbacks in its repairs and renovations programme to meet shortfalls in Council housing budgets.

Councillors reluctantly agreed to reduce the modernisation plans after hearing the Council was still required to give over £8m to the Government in subsidy despite the £3m shortfall in its own budget.

Cllr Tony Coates, Winchester’s Portfolio Holder for Housing, has today condemned the policy in a letter to Margaret Beckett, the Minister for Housing.

Members of Cabinet heard [on Wednesday 10 December 2008] that Winchester’s Councillors, Officers and Tenants had all called on the Government to give them more local control of rents and warned:  “Without this, it is difficult to see how a Council Housing service can be maintained in Winchester.”

Cabinet was told that Winchester City Council needed a minimum repairs budget of £9.8m to maintain the current repairs programme or a budget of £13.4m for an enhanced programme. In reality, the budget is £6.7m.

Cllr Coates said:  “We are in an impossible position – between the proverbial rock and a hard place – and the system is grossly unfair.

“We don’t have enough money to spend on our own homes yet the Government still expects us to pay more than £8m to subsidise council houses elsewhere in the country.

“I apologise to our tenants who will not get a modern kitchen, bathroom or boiler as a result of Government policy which penalises well-run councils.”

Winchester’s Tenants Group TACT (Tenants and Council Together) has backed the Council’s comments but says it cannot endorse the cutbacks.

Alan Rickman, joint chair of TACT, said: “TACT realises the difficulty of the position you are in, along with many other councils around the country. The fault lies at the door of the Government.

“If TACT endorses this paper we would be sending the wrong message to the Government, that council tenants are prepared to be short changed, we are not!

“TACT however will do all we can to work with the Council as much as possible, to achieve the best for council tenants.

“TACT, regret having to take this stand, but like the Council we have no other choice, and must make our feelings clear. Council tenants want a fair deal. With ever increasing rents, we should not have to see a decline in service levels."

Mr Rickman added:  “The Government has a surplus of £194 million this year through money taken from councils in negative subsidy.”

The main areas affected by the budget short fall are:

Gas Fired Heating Systems - Approximately 50% of the required boiler replacement programme will remain unfunded and would need to be deferred.

Disabled Adaptations - At existing referral rates it is estimated that at final year end 2008/09 a backlog of 80 cases will exist.  With a reduced budget for 2009/10 and similar referral rates an estimated backlog of £430k will exist at final year end 2010/11

Inflation Adjustment - No inflation adjustment will result in a reduction of repairs of approximately £870k pa, resulting in a corresponding level of disrepair generally to the stock year on year.

External Repairs & Painting - Only essential repairs and repainting will be carried out to the 1100 properties programmed per year.  Properties needing no urgent repairs will have redecoration deferred until a future date.

Internal Redecoration - The entire programme of approximately 350 properties and communal areas would be deferred until further notice.

Kitchen & Bathroom Programme - It is estimated that at financial year end 2008/09 a waiting list of 70 properties requiring kitchen replacement will exist and will be deferred.  A further 80 kitchens or 200 bathrooms will not be replaced as planned in 2009/10 and will be deferred.

Reinstatement Of Void Properties – Less money will be available to fund works to turn around empty properties and this will result in fewer repairs at re-let.  This could then result in the potential slowdown or refusal of offers of properties to prospective tenants.  Any properties with very expensive void works may not be able to be funded next year.

Pvcu Window Replacement Programme - Approximately 50% of the window replacement programme will be deferred to a later date.  This will affect approximately 40 properties.

Councillors approved the revised maintenance scheme and also agreed to an average rent rise of 6.14 per cent from April 2009.