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.
Cllr 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.”