Government demands "tenant tax" from Brighton

8:56pm Tuesday 15th January 2008

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Tenants from the poorest parts of Brighton and Hove are to subsidise housing repairs in other parts of the country, it has emerged.

The Government was being blamed for diverting millions of pounds of council tenants' rent to repair and improve homes in other areas of Britain.

Brighton and Hove City Council will be giving more rent back to the Government than it is receiving in grants for the first time - and the situation is predicted to be permanent.

Some £2.5 million will be handed to the Government this year, meaning that the average council household will be paying for £210 of work outside of the city.

The council is currently facing a funding gap of at least £50 million to bring its own homes up to the Government's Decent Homes standard.

The news comes as the council agreed to increase rents by an average of 6.5 per cent, or £200 extra a year, at a meeting of a housing management sub-committee today.

The highest rise will be £360 a year while some homes will receive reductions of up to £120.

Rates are set in line with Government calculations.

Green councillor Bill Randall said: "With rent rises and the increasing costs of heating this will be a difficult year for tenants."

Councillors agreed the increase as part of the housing budget for the 12 months until March 2009.

The city council will receive £9 million from the Government for major expenditure on improving homes.

But the authority is also being asked to refund £11.5 million of rent, up £3.4 million, to the Department for Communities and Local Government .

This is because the Government believes the council receives more money from its tenants than it needs to make emergency repairs, manage its housing stock and pay for heating and electricity.

For the first time the council will become a net contributor to the Government's housing fund.

The £2.5 million surplus will be used in other councils which Whitehall believes need more money than they are receiving through rent.

Councillor Mary Mears, the council's head of housing, said: "The bottom line is that the tenants will be paying a tax to the Government."

Sue Chapman, the council's head of financial services, told the meeting today: "For the first year we are a net provider and pay back to the Government £2.5 million.

"We are not expecting to ever become a beneficiary of the system.

"We are expected to pay more and more back to the Government as years go on."

The Department for Communities and Local Government was tonight unavailable for comment.

Increases in gas, heating and electricity costs have yet to be decided as the contracts are up for renewal later this year.

But the council said that costs are likely to increase by more than the rate of inflation.

Is it right for the Government to ask our council tenants to fund housing elsewhere?