WAVERLEY Council, which this year expects to hand over £10.8m of housing tenants rents to the Government, has spearheaded an alliance of 60 local authority landlords against the "stealth tax". Treasury coffers will this year receive a £194m boost from the measure, which councils say is hitting England's poorest households. Each year more than 150 councils are forced to hand over a large share of the rent they collect from their tenants and pay it into a Government pot. This money is redistributed to around 50 other council landlords, who use the funds to provide housing services. Waverley owns and manages 5,000 homes, which generate rental income of £22.2 million, but has to pay £10.8 million to the Government as negative Housing Revenue Account subsidy. Affected councils complain that the tax on the least well-off members of society is made even more unfair by the fact that this year, the Government will keep nearly £200 million to fund public services that do not directly benefit tenants. To achieve a fairer deal for tenants, 60 local authority landlords have met at the invitation of Waverley and have pledged to join forces and to submit evidence to the Government about the impact the unfair practice is having on tenants countrywide. Mary Orton, Waverley's chief executive, said: "Being located in Surrey, Waverley is generally thought of as an affluent borough. "In reality, with house prices among the highest in the country, affordable homes are in short-supply and high demand. "Despite the fact that we have a very real housing need, the Government continues to penalise our tenants by using a complicated calculation that means we have to hand over nearly 50 per cent of their rent. "This is money that could be better spent on basic maintenance to our tenants' homes." Leading national housing finance expert Steve Partridge addressed the symposium of local authorities and gave details of the Government's pending review of housing subsidy. Waverley Council leader Richard Gates said: "One of the aims of the Government is to improve the country's housing yet, when it comes to calculating the resources to maintain council homes, they use an unrealistic formula which is completely out of step with actual costs. "It is like being instructed to buy a quality bathroom for £1,000 but only being given £500 to do so - the figures do not add up. "Indeed, the Government has admitted in a letter to me that the system is 'widely regarded as unfair and unpopular'. This, together with the claw-back of 50 per cent of our tenants' rent, is something that we have been grappling with for some years and is an issue that has obviously struck a chord with many other local authorities. "This formula is dastardly complicated and for far too long the Government has been hiding behind the mysteries of this system. "We need to show how unfair the funding system is on the poorest people in our community." This view was shared by the more than 100 people from 60 authorities representing, among others, the Midlands, London metropolitans, the South West, Yorkshire, Dorset and Lincolnshire, that have joined Waverley to campaign for a better deal for council tenants. The next stage will be to develop a range of arguments and to submit supporting evidence to the Government, which can be considered as part of their review of housing subsidy.
