New policy could put millions of pounds into council house pot

Council Leader Linda Neal.
Council Leader Linda Neal.
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COUNCIL house tenants look set to benefit from a new housing policy likely to bring millions of extra pounds into the council coffers.

The new self-financing housing model will mean the district council will no longer have to send millions of pounds of collected rent - £7.7 million in 2011/12 - to central government.

However, in exchange, SKDC must pay £122 million to central government over the next 30 years to help clear the national housing debt.

Overall, the council looks set to benefit from an extra £3 million a year in its Housing Revenue Account - potentially saving the council around £100 million over the next 30 years.

The savings will give the council money which can be spent on improvements and repairs to council houses throughout the ditrict.

Coun Leader Linda Neal said: “£122m is a significant burden on the Housing Revenue Account but the early projections are that, potentially, the servicing of the loan should be less than the amount we currently have to pay into the national pot.”

While it appears the shake-up will benefit tenants in South Kesteven, Coun Neal has urged restraint as predicting how the economy will shape up over the next 30 years is extremely difficult.

Coun Neal said: “We are currently looking at a range of options of how to manage this debt and better understand any impact this will have on our housing budgets, although it should give us more certainty about the costs of this service over the longer term.

“As we work through this we will be getting views from tenants about their priorities for repairs and improvement and in particular we will be exploring the opportunities that may be created to deliver more affordable housing across the district.”

l Some tenants could face council house rent increases of up to 9.92 per cent, it was announced this week.

The district council will increase rents by an average of 7.65 per cent from April - an average weekly rent in the district of £71.08. All council house rents will pay between £48.47 and £101.67 a week.

The average rise is in-line with Government guidelines of 7.8 per cent.

What has changed?

l Previously the district council collected rent from its tenants but then paid around £7.7 million to help with the cost of housing at other councils.

l Under self-financing SKDC will no longer pay out £7.7 million per year.

l But ithe council must instead pay £122 million over 30 years (around £4 million per year) to help pay the national housing debt of £25 billion.