Rent increases for community and voluntary groups

Recap and update:

On 10th January this year the Executive of Ipswich Borough Council  discussed a report headed “Rent Discounts to Voluntary and Community Organisations”.

This Orwellian title was probably chosen to disguise the fact that the Council’s  intention was, in fact, to greatly increase community rents.

The basic proposals were a) to charge the full market rent on the properties currently used by these organisations  b) to offer a discount on this and c) to put in place transitional arrangements to lessen the impact of these large increases.

The council’s original report recommended a 50% discount, but revised recommendations on the night saw an 80% discount proposed (referred to as Option One in the report.) This may seem a generous amount but because many of the current rents are peppercorn, the groups involved will see an increase of well over a thousand pounds and in some cases, much more.  One of the worst hit will be ISCRE  (Ipswich and Suffolk Council for Racial  Equality); under Option One their rent could  increase by £3,200 just at the point where they are already being hit by reduced funding.

The Council acknowledge (paragraph 4.2) that the provision of Council owned assets for use by voluntary and community organisations helps to ensure that the facilities are available to help facilitate community participation and that this contributes to the Transforming Ipswich priority, “Strengthening the Community” and yet they appear to be determined to push through rent increases that will most decidedly weaken community effort!

To add insult to injury the consultation letter sent out in the last few days states that the tenant shall be responsible for the landord’s legal costs. The Maidenhall Resident’s Association for instance has been told that they will have to pay approximately £250 AND “a fair proportion” of any building insurance that the council arranges (amount not stated)

The Council has proudly announced that no group will pay a rent increase in the first year because a grant will be given to cover any increase, but they have failed to mention that community groups would be stung for the legal costs of drawing up the new leases.

The affected groups now have until 10th February 2012 to respond and the matter will go back to the Executive on 13th March.

If you have been helped by groups like the Ipswich Furniture Project, ISCRE, Maidenhall Residents Association, Chantry Residents Association, Whitehouse Residents Association, the Waterfront Community Group etc then please write letters to the local Press and to the Council and make your feelings known at the new Area Committees: after all this is certainly a case where decision-making  should be brought closer to the people.

Ipswich Community Radio (ICR) kindly gave me a chance to speak on their Breakfast Show yesterday, on this issue, so they are asking for comments too.

In a move we’re told has interested George Osbourne, Ipswich’s Ben Gummer MP will today put forward a ten minute rule bill aimed at making the tax man reveal how our taxes are spent each year, providing all taxpayers with a personalised statement that would show exactly how much tax they had paid and where it was spent.

The bill, to be read after Prime Minister’s Question Time in the House of Commons this afternoon, would make certain that every taxpayer in the country received a statement explaining (a) what taxes they pay and (b) how those taxes are spent. These tax statements could be a powerful way of increasing awareness of the tax burden and therefore they could create further downward pressure on the tax burden. Mr Gummer thinks the statements would mean taxpayers would see not only how much direct tax they pay but also how this would change as a result of the government’s budget, that taxpayers would see precisely how their elected representatives decided to spend that money on their behalf and that taxpayers would see whether a government was sticking to its promises on taxation and spending.

When challenged that this scheme was being used to bash spending on benefits, Mr Gummer maintained that this was not his aim, insisting he was looking for transparency in Government spending. He also denied that it would become a job creation scheme for bureaucrats, pointing out that it would be relatively simple to administer and is really no different from the data generation used by direct mail marketeers every day.

Mr Gummer told Ipswich Spy “Few of us would part with more than a few pence without a record of how it was spent. From supermarket receipts to electricity and mobile bills, we expect an itemised breakdown of where our money goes.

“Yet for our largest monthly payment, to the taxman, we get just two numbers printed on the right hand side of a pay slip. We are not told the overall value of our taxation obligation. We are not told what proportion of our income it represents. Crucially, we are not told how the government spends the money we are made to give it.

“This must change. Just as we are under an obligation to pay tax, the government should be obliged to tell us how it spends our money. Transparency calls for this most basic view of what we pay and where it goes. Accountability demands this most simple tool with which to hold those who spend our money to account. Democracy requires that we understand what politicians promise us and how those promise affects our lives.”

Local Authorities already produce Council Tax bills that have a breakdown of who spends what part of the bill, and many produce literature that explain how they spend our money. This clarity on local authority funding leads directly to the public questioning how their money is spent, and it is no doubt with this in mind that Mr Gummer introduces his bill in the House of Commons. 10 minute rule bills have no chance of becoming law, but it is clear that Mr Gummer has considerable support from the Government on this, with carefully placed articles in The Sun and The Daily Telegraph, as well as a pre prepared mocked up tax bill sent out with the press release which was included by Conservative Home. Sources “close to the Chancellor” told The Sun that “George likes the idea a lot” and we would not be surprised to see this idea included in a Finance Bill in the future.

Private quotations received suggest that the cost of producing and mailing Tax Statements to the 30.5 million payers of direct tax at about £7.5m (under £0.25 per taxpayer, approximately £0.20 of which is for postage). This cost would be substantially offset should HMRC combine posting the Tax Statements with revised Tax Codes. There would be a minimal cost to setting up the systems and processes in the OBR and HMRC needed to calculate Tax Statements.

Opposition politicians criticised the scheme as an expensive gimmick, with David Ellesmere, Labour’s General Election candidate for Ipswich, saying “It beggars belief that, when essential public services are being cut, Ben Gummer is proposing to waste £7.5million on what is little more than an expensive gimmick.”

Russell Harsant, County and Borough Councillor for Bixley Ward in Ipswich, sadly passed away in the early hours of this morning, aged 78. Cllr Harsant had been fighting cancer for many months, but had managed to carry on as before until the last few weeks. His health deteriorated rapidly after Christmas and he was treated as an in patient at St Elizabeth Hospice.

Ben Gummer MP led tributes: “This is very sad news. Russell was a kind and life-enhancing friend whom we shall all miss very much. He made a considerable contribution to Ipswich during several decades of public service as a Borough and County councillor. Liz is in my thoughts and prayers.”

Russell was a long standing member of both Ipswich Borough Council and Suffolk County Council, a former Conservative group leader on Ipswich Borough Council, and between 2004 and 2010 he was a solid and devoted supporter of his wife Liz whilst she was Leader of the Council. He was proud of the fact that he had never lost an election, having taken St Clement’s ward off the Labour party in 1983 to join the Borough Council. He rapidly rose to be Conservative Group leader before standing down in the early nineties. In 1997 he was elected to be the County Councillor for Bixley Ward, before returning to the Borough Council in 2008 at a by election. Since then he has represented Bixley ward on both councils.

Educated at Northgate Grammar School, Russell was articled to a building firm in the town and recently recalled how his “old gaffer” had been involved in the building of Rosehill Library. His interest in buildings continued throughout his involvement in public life and he was on Development Control at Suffolk County Council and Planning & Development Control committee at Ipswich Borough Council. Russell also served as Vice Chairman of the Roads and Transport Scrutiny Committee on the County Council alongside current Leader of the County Council, Mark Bee.

Cllr Bee told Ipswich Spy “I know I can speak on behalf of everyone when I say we are truly saddened to lose Russell from our lives.

“Russell was a hard working person who exercised good judgement and who cared very much about his constituents. He had a wonderful sense of humour and a warm heart that was complemented by his dry wit. We made an excellent team on the Roads and Transport Scrutiny Committee and I will look back on those years with fond memories. Russell was committed to his role and took his responsibilities seriously – he always put people before politics.

“I would like to express my deepest sympathy to Russell’s family, and in particular to his wife Liz, with whom we all share sadness today.”

IBC Conservative Group Leader John Carnall said “At times politics can be very bitter but Russell’s attitude made sure this didn’t happen. Russell had the great respect of all his colleagues and officers as well and will be missed by all.”

Labour leader of Ipswich Borough Council, David Ellesmere, added “Russell was well-liked by members of all parties. He loved the political process and had a connoisseur’s ear for a well-turned phrase or debating point. He seemed to appreciate a good point made at his party’s expense almost as much as when his party got one over on the opposition. And he would enjoy discussing this, always with a twinkle in his eye. His contributions were always well-considered and worth listening to. He will be greatly missed and our thoughts go out to Liz and his family.”

For the Ipswich Liberal Democrats, Cllr Ken Bates said “The Ipswich Liberal Democrats are all deeply saddened to hear that Russell has passed away. Russell was an experienced councillor who served the people of Ipswich for nearly thirty years. This is a very sad day and all of our thoughts are with Liz and the family, he will be sorely missed.

“I personally am very deeply saddened by Russell’s passing. Though I didn’t know him that well and for very long, he was always very encouraging to me and I held him with the highest regard.”

And in the Ipswich Star, political editor Paul Geater said: “When I started Russell was already a senior councillor who soon became group leader – but he always had time to talk to a youngster starting out.

“We’ve chatted regularly, and candidly, hundreds of times since then. This is an incredibly sad day. My heart goes out to Liz and his family.”

The Ipswich Star also has the best photograph of Russell we’ve seen, which we reproduce below.

Those we remember will never die, for to be remembered is to have immortality.

IS/PN

Author’s note: I knew Russell well and this has been a very difficult article to write. It has been made much easier by the outpouring of genuine affection for a man I am proud to say was one of my best friends, a very loyal friend to the end and a man I greatly admire. I visited him at his home just days before he went to the hospice and he was still as engaging and sharp as the first time I met him, although he tired quickly. My heart goes out to Liz and his family, who must be comforted by the vast array of support on offer from those across the spectrum in Ipswich.

Ipswich Borough Council is proposing to keep a rise in council house rents to inflation from April this year, according to a report being presented to a council meeting next week, rejecting proposals to push rents up by 7.2% as part of Government guidelines to achieve rent convergence by 2015/16.

Ipswich Spy understands this decision was proposed, in part, because the council recognises that many tenants are facing very difficult financial times and a large increase would add to the hardship being caused by Government cuts.

David Ellesmere told Ipswich Spy:

“Everyone is feeling the pinch at the moment and we felt that the Government guideline rent increase of 7.2% would have placed too much of a burden on our tenants. However the Government still has a stated desire for “rent convergence” with Housing Associations. So there is a risk that having a lower-than-inflation rent rise would lead to a big Government-imposed “catch-up” increase in future years.

“This real-terms freeze in rents will still allow us to keep the “Ipswich Standard” of housing maintenance and to move forward on our plans to build the first new council houses in Ipswich for over 20 years”

Normally the housing rents would be considered as part of the Medium Term Financial plan, the council’s budget process, but because of the statutory need to inform residents before 5th March 2012 the council is holding a special council meeting next Wednesday. This also means, because of ongoing changes to council housing finance, it has been impossible to consult with tenants representatives. The council will be putting a 30 year business plan for the Housing Revenue Account to the February council meeting.

The lack of consultation raised the ire of Ipswich Liberal Democrat Chairman Cllr Ken Bates, who said it was not true that the council was unable to consult with tenants representatives:

“It is always possible to contact tenant representatives directly, though since the administration has abolished the Housing Management Board, it’s been made more difficult for tenants to have a say. Labour, it would appear, are removing tenant consultation piece by piece.”

Cllr Bates also expressed shock at the size of the rise, which, at 5.6%, was the rate of inflation last September.

“Labour are not only potentially putting essential community groups out of business, they are hitting Ipswich Borough Homes tenants with an over inflated increase that will take more money out of some of the vulnerable members of our communitys’ pocket.”

IS/NC

On 10th January 2012 the Executive Committee of Ipswich Borough Council discussed a report on rent discounts to voluntary and community organisations. The basic premise of this report is that new leases will be negotiated with the organisations listed in Appendix 2 (not on the Open part of the Report) and that a market rent is charged to them.

The second recommendation is that a rent discount is offered: 80% under Option One and 50% under Option Two.

The original report clearly promotes Option Two both on the front introductory page and in the closing recommendations (section 12) and this would have meant only a 50%  discount on the market rent for organisations previously used to paying just a peppercorn rent.

However on the evening itself a number of Questions were tabled by Cllr Carnall AND a whole sheet of revised recommendations was made.

Cllr Carnall asked what consultation had taken place with the thirteen community groups that would be affected by the proposed rent increases and was told that these groups would have 3 weeks from the date of the meeting to make representations to the council.

The revised recommendations made a substantial difference: paragraph 12:2 now recommended Option One – the 80% discount and the thirteen groups had shrunk to just ten, with the Head of Planning Transport and Regeneration authorized to consult separately with the three Scouts groups.

Both the main report and the revisions recommended the transitional arrangements for the rent rises, which would take place over a four year period. For the first year, and the first year only, all organisations would get a grant to cover the increase. After that they would have to make grant applications each year with no guarantee whatsoever that these would be met.

The Executive claim that with any new system there are winners and losers, but it is hard to see any “winners” here on the community side.

The amount the Council will gain from Option One (80% discount) will be chickenfeed to them but still a burden to the community groups and if the Council reverts at any time to Option Two (50% discount) then I would guess that that would be enough to sink some of the groups. The Council itself acknowledges that there will be a “significant impact on these organisations as most currently pay no rent or a rent significantly less than the market rent.”

This is, in my opinion, an eviction policy by the back door: remember that the basic recommendation is to charge the market rent, therefore the proportion of the discount, as far as I can see,  could be changed at relatively short notice. Appendix One actually states that any proposal or application to discount rent will be considered on its merits and will be reported to Executive for a decision to be made.

The groups affected are those like the Ipswich Furniture Project, various Residents’ Associations  (Maidenhall, Chantry and Whitehouse) , the Waterfront Community Groups and ISCRE.

It is therefore difficult to understand why the Council wants to undermine and discourage them with these proposed rent increases. The affected groups have just 2 weeks left now of the consultation and then the matter will be reported back to the Executive in March 2012.

IS/Sally Wainman