16 July 2004
Council rents should be increased faster to bring them into line with those charged by housing associations, says an independent review.
The review, commissioned by the Office of the Deputy Prime Minister and carried out by consultancy Hacas Chapman Hendy, says rent restructuring has worked smoothly since April 2001.
But, for local authority and housing association rents to be fully harmonised by 2011/12, the two sectors must stop using different formulas.
In particular, councils must join housing associations in using the retail price index to calculate inflation.
The review, published on July 13, recommends that councils switch from 2005. The overall impact will be modest, it says, although some council rents could rise by 40p per week in 2005/06, leading to an extra £2.60 per week by 2011/12.
The Local Government Association criticised the plan, claiming it would mean council rents rising by 19% in real terms by 2011/12 compared with an initial projection of 15%.
David Thompson, the LGA's head of housing, said the review had concluded that any difference between council and RSL rents by 2011/12 would be very small.
'The whole basis of restructuring was always that housing association rents would be held and local authority rents increased,' he said. 'This is a further increase on top of three-year-old guidelines.'