CROYDON IN CRISIS: Some of the poorest people in the borough face another cost-of-living increase – and one which the cash-strapped council doesn’t need to impose. By STEVEN DOWNES
Croydon’s Labour-run council is preparing to hike rents to all its tenants by 4.1per cent. This is despite recommendations from the scrutiny committee to postpone any rent rises to avoid the impact of cost-of-living increases and steepling energy prices on its tenants.
And the rent rise is expected to be approved at a cabinet meeting to be held at the Town Hall tonight despite the fact that there is no need at all to increase council rents.
The rent rises will heap insult on to injury for thousands of Croydon residents, and comes less than a year since the council’s housing service caused a national scandal when the appalling conditions some tenants were living under were exposed on national television.
One housing expert described what they witnessed in the Croydon Council-managed flats as “the worst conditions they have ever seen”.
A report from the council’s scrutiny housing sub-committee which goes before tonight’s council cabinet meeting notes that the pace of repair and re-housing for those worst affected by the mouldy and damp flats in the blocks on Regina Road, South Norwood, “had not been as quick as envisaged”.
The scrutiny committee also expressed “significant concern” about the ability of many tenants to be able to afford their rent increase “especially in light of the rise in the cost of living nationally”, they said.
The cash-strapped council reckons it will raise an extra £1.7million through the rent increases. In its housing budget for 2022-2023, it is increasing its housing staffing costs in the next financial year by £3.4million.
For a council tenant in a three-bedroom home, the rent increase will see them paying an extra £21.80 per month. For those living in the council’s new flats in Malcolm Wicks House, across the road from the Town Hall and under the more expensive London “Affordable” Rent, their accommodation bill will be going up by £29.64 per month.
Croydon’s housing stock consists of approximately 13,432 homes, according to the council’s own figures. In addition, there are approximately 800 homes that are managed on behalf of the council’s general fund, for private landlords and the arm’s length company set up alongside Brick by Brick, Croydon Affordable Homes.
In common with other local authorities around the country, the council manages its housing stock through its Housing Revenue Account, the HRA, a pot of cash funded primarily from the rents and service charges it receives, and which is ring-fenced and legally separate to the council’s general fund.
It should be, therefore, relatively unaffected by the council’s financial collapse which saw it issue a Section 11 notice in November 2020 and is seeing £38million-worth of cuts to other services being pushed through in the Town Hall budget.
According to one well-placed Labour Party source, “The council rent increase is totally unjustifiable.
“The council has no need to make cuts or savings in the Housing Revenue Account.
“Rents go straight in there to fund services for council tenants, and Croydon’s HRA is relatively healthy.
“One argument they could make is that as inflation is 5.4per cent, so this is still a real terms cut in rent. But for many council tenants, benefits and pensions are only going up by 3.1 per cent this year, so it’s a real terms rise.”
Another argument expected to be used at the cabinet meeting tonight is that the HRA’s reserves need to be maintained so that there is money available to pay for fire safety work expected to be required under forthcoming legislation and “major refurbishments of old stock”.
One senior Labour councillor has briefed Inside Croydon that they believe that the rent increase is necessary, otherwise Croydon will not qualify for government grants. But as the budget papers show, Croydon has received no government housing grants in 2021-2022 and is not expecting to receive any grants in the next financial year, either.
Another is feeling increasingly uncomfortable with many of the financial measures being pushed through in the past couple of weeks, in the final days of their administration.
“I hate to say it, but it feels like we’re doing the Tories’ dirty work for them,” they said.
But none of this appears in the report going to the cabinet tonight.
What has been released to cabinet members and councillors alike are recommendations from last week’s housing scrutiny sub-committee, which states, “There was agreement amongst the sub-committee that it would be difficult for tenants to understand why a 4.1per cent rent increase was being proposed when they would not have seen any improvement in the level of service provided.”
And there is this, too: “The sub-committee highlighted a number of risks to the budget that would need careful monitoring in the forthcoming year. The major risk arose from neither a business plan nor a capital works programme being available to scrutinise alongside the budget, which meant it was difficult to have confidence that the proposed budget would be sufficient to support the programme needed to improve the service to the
level expected by residents.”
Handed this steaming turd of a rent rise proposal is Patricia Hay-Justice, who has been the cabinet member for homes for barely a year, inheriting the toxic legacy left by Alison Butler, the disgraced Tony Newman’s former deputy leader.
During her six years on housing, Butler managed to introduced Brick by Brick, she oversaw the housing aspect of the potentially fraudulent Fairfield Halls refurbishment, and just months before the Regina Road scandal broke, Butler handed a contract extension to Axis, the council’s much-criticised housing repairs contractors.
Part of the case Hay-Justice is expected to present tonight is that every other borough in London, bar one (Tory-run Wandsworth), will also be increasing its council rents this year.
But just because other councils are doing something does not make it the right thing for Croydon to be doing.
The cross-party scrutiny committee’s report says, “significant concern [was] raised about the ability of individuals to afford the increase, especially in light of the rise in the cost of living nationally”.
The report states, “The possibility of deferring the rent increase, if only for a short period, needed further exploration and if not viable, there needed to be a greater level of engagement with residents to explain why the increase was needed.
“The sub-committee recommends that work is undertaken prior to the cabinet’s consideration of the rent increase to establish whether deferral of the increase would be viable from both a regulatory and financial perspective.
“In the event that deferring the rent increase is not possible, the reasons for this need to be confirmed at the cabinet meeting.”
Deferring a rent increase, the committee said, “would be a means of acknowledging to the council’s tenants that the performance of the Housing Service had not been at the level the council would want for its tenants”.
In a separate recommendation, the committee report states, “If viable, the cabinet is asked to consider deferring the rent increase for a to-be-determined period of time, as an acknowledgement that improvement in the customer experience had not progressed at the pace expected.”
There is no trace of any such consideration for a deferral to be found in the official report going before tonight’s cabinet meeting.
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