24 March 2006
Local authorities will retain less than one third of the extra money they raise in council rents during the coming year, according to a new report.
An analysis by the Northern Housing Consortium shows that rents will rise by an average of 4.7% this April. But just 74p out of the average weekly increase of £2.59 will be kept by councils, with the remainder absorbed into the housing subsidy system.
The study was commissioned by the consortium after authorities in the North complained the government had delayed a major reallocation of management and maintenance allowances that would have switched money from the South.
The report, published this week, confirms that all but four out of 54 authorities in the three northern regions are worse off than if the Office of the Deputy Prime Minister had proceeded with the changes as planned.
But it also suggests that the ODPM's change of heart, following pressure from London councils, merely compounded what was a harsh settlement for all local authorities.
The government is accused of clawing back money through the subsidy system to make up for income it is losing due to stock transfers and right to buy sales.
Many councils have begun to raise rents sharply to bring them into line with those of housing associations.
PFmar2006
