Councils that charge more rent than the government thinks they should will lose out under rent restructuring, the government has admitted.
A briefing paper on the coming year's rent restructuring formulas says the councils have enough time to adjust and will not get any special help.

Councils warned last summer that they would be forced to make drastic cuts in services to stay solvent (HT 15 August 2002, page 7). Some could even be forced to transfer their stock.

But the Office of the Deputy Prime Minister has insisted that the new system will be fairer to all.

It said councils that raised their rents over the last decade had an unfair advantage.

"Some authorities could be seen to have received rather more than their fair share of the subsidy pot in the past. It is only fair that stops," the paper said.

The ODPM said the total amount lost by councils in reduced subsidy is being used to boost management and maintenance allowances. The government is committed to ensuring there is no net loss in the coming year, but some councils will gain and others lose.

Adrian Waite, a director of consultant AWICS, said councils with historically low rents, which stand to gain under restructuring, were also not universally pleased with the new system. "The system may be fairer but it undermines local autonomy," he said. "Some councils opted for low rents to keep them affordable."

Source

Housing Today