Council house tenants “taxed for Labour’s political ambitions”

Ellesmere at the waterfrontCouncil house tenants are paying for Labour’s political ambitions, according to a senior opposition councillor.

Ipswich Borough Council will be increasing council house rents at nearly double the rate of inflation under plans to be discussed at a meeting next Tuesday.

The council’s executive committee will discuss a report by Cllr John Mowles that proposes an increase of 4.5% in council house rents despite much fanfare being made last year about a move to restrict the rise to the rate of inflation. Last year the rent rises were pegged to inflation and the Leader of the Council justified the move saying “many tenants are facing very difficult financial times and a large increase would add to the hardship being caused by Government cuts.”

Cllr Ellesmere told Ipswich Spy that “The rent increase for council houses is in line with the national rent restructuring formula and the council’s housing revenue account 30-year business plan assumes the formula will be adhered to. This formula was also followed by the previous Conservative and Liberal Democrat administration. The only year it wasn’t followed was last year when the Labour administration felt that the resulting increase would have been too high and instead pegged it at inflation. This was not something that seemed to bother the previous Conservative and Liberal Democrat administration in their last year in office when they increased rents by a 6.47%.

“Council house rents in Ipswich are still significantly cheaper than the “80% of market rent” that the Conservative and Liberal Democrat Government is forcing housing associations to charge.”

The report the council will be debating next week makes clear that rent increases are applied to meet the rent convergence model to generate the income stream to fund the Council’s aspirations. The £5 million the council is raising each year from increased rents will be used to build new council homes, a key part of David Ellesmere’s parliamentary campaign for 2015.

Andrew Cann May 2012Cllr Andrew Cann, leader of the Liberal Democrats on Ipswich Borough Council, said “it does seem rather odd given that Labour are now using the Coalition Governments own legislation in order to build new council houses that they have chosen to put up rents by a large amount for two years running. The former administrations record was a lot stronger on this.

“The report is clear that the £5m for building new homes is predicated on the success of the 30 year financial business plan. Therefore the rent increase is helping to build new council homes.

“Now we all agree with building new council homes but should existing tenants be paying for it? Wouldn’t it be better to have a less ambitious council home building plan and keep rent increases nearer inflation?

“The Housing Revenue Account Business Plan. Exec Summary says “.. rent increases are applied to meet the rent convergence model to generate the income stream to fund the Council’s aspirations.

“So what they are doing is taxing council house tenants to pay for their political ambitions.

“New council homes? Yes. But taxing people on limited incomes and in a period of austerity to pay for it? No.”

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6 Responses

  1. I’m a bit confused by this article. The headline premise is that the rent rise is to pay for “Labour’s political ambitions”, but on reading further it seems that it’s actually to pay for more council houses to be built.

    Am I missing something? If the implication is that Labour are ambitious to build more council houses, what’s so sinister about that? It seems a pretty reasonable goal for the council to have.

    • It is indeed a very reasonable ambition to build council houses, Mo, but it is one that is designed to boost David Ellesmere’s hopes in 2015. The allegation from Andrew Cann is that council house tenants are unfairly paying double inflation rent rises in order to pay for this ambition.

      If it is the case that the only way the council house building program is affordable is by big rent rises for existing tenants, many of whom are on low or fixed incomes, don’t you think that’s a little unfair?

      Much has been made by Labour of their ambitious council housing program, but nobody has yet explained that it is being paid for on the backs of double inflation rent increases for the existing tenants.

      • “it is one that is designed to boost David Ellesmere’s hopes in 2015″

        Do you have evidence for that assertion? I’d be very interested to see it, if so.

        It would be easy for the opposition to claim that every positive move the council makes is ‘designed to boost David Ellesmere’s hopes’: but if the preferred alternative is that the council sits on its hands for the next two years, that doesn’t seem a very sensible way of running the borough.

  2. Mo I guess it’s a matter of opinion but David has been very prominent in all the press for the council house ambitions which is par for the course for any parliamentary candidate and of course leader of the council doing this.

    Politicians quite rightly claim the credit through the press if the can for their successes. Nothing wrong in that. But the plan is very ambitious. £5m a year is being raised partly through increased rents. The councils own paperwork says this.

    I’m simply stating that a less ambitious programme, less than £5m per year, would not result in such a huge increase in rents.

    • Yes, any council leader would make a big deal about building more houses, whether or not they were a Parliamentary candidate: it would be odd if they didn’t.

      It’s to be expected that an opposition councillor will try and spin that into a statement about Davd Ellesmere’s ambitions: slinging mud in the hope that some may stick is, I guess, part of the job. But Ipswich Spy becomes much less useful if it’s just going to uncritically parrot a party line like this. Ideally we would be able to trust it to pick out the valid arguments from among the propaganda.

    • Given there are more than four thousand on the waiting list for a council house, five million a year is anything but ambitious. It is essential. Cllr Ellesmere is bang on when he says that the council are the only show in town.

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