Sandwell Council homes to lose out after 'insane' government rent reduction
Cash-strapped Sandwell Council will miss out on £33 million after being forced to lower rents by the Government – meaning planned improvements to council homes across the borough could be scrapped.
Deputy leader Steve Eling called a Government policy forcing the authority to reduce council home rent rates by one per cent 'insane'.
While the decision is a boost for families living in council homes, Councillor Eling said it would have a major impact on the Labour-controlled council's ability to build much-needed council houses and put planned improvements to its current stock in jeopardy.
Bosses had planned on increasing rents until 2020 and had drawn up housing improvements on the assumption they would be receiving the extra cash.
But the decision from the Government has now thrown a spanner in the works.
Instead of the planned hike, rents will come down by around 89p a week – a yearly saving of £46 – from April making the average weekly rent in the borough £87.98.
The drop in income from rent will mean the council will receive £33 million less over the next four years than first thought.
It is another blow for the authority which already needs to save £40 million over the next two years due to a reduction in Government grants.
Councillor Eling attacked the Government over the move.
He said: "We won't be able to do improvements.
"It will either mean they are delayed or don't happen at all.
"They are taking money from improvements and new houses. On one hand they say building houses is essential and in the next breath they are taking away money for building houses.
"I can only describe what the Government is doing as insane.
"They are totally contradicting everything they said in relation to their housing policy. They are taking away the ability to build new homes. It's totally unnecessary."
Garage rents and various other housing charges will rise by one per cent but Councillor Eling said those increases would bring in 'diddly squat' and make 'no difference'.
He also said savings made by current tenants would be outweighed by the blow of losing cash to be invested in new homes.
He said: "The cost of not building new homes is more than the gain of these rent reductions.
"I don't think they've done it to help people out at all, I think they are trying to reduce housing benefit costs."
