On Friday the Department of Health and Social Care announced a 5% rent hike for tenants in public sector housing.
As a local authority Ramsey Town Commissioners had (along with some other authorities) recommended a freeze on public sector rents this year, until an appropriate form of means testing was introduced to make sure that those who would need assistance to pay the increased rents could get the financial support they need. Public sector rents have increased by at least 25% since 1st April 2012, and many authorities went along with these increases because Government promised to introduce means testing. As we have come to expect, Government has ignored the requests of these local authorities.
Public sector housing by its very nature has to be subsidised by the taxpayer, this subsidy comes through either the deficiency arrangement (keeping rents lower than the private sector), or through the benefits system (helping people pay their rent). Currently the Island operates a mixture of these two approaches, both of which are paid for by the taxpayer.
All the taxpayer asks in return for this subsidy is that the money is targeted effectively, that it goes to those most in need, and means testing is the fairest way of doing this.
Those on the lowest incomes should not be hit by the increase in rent, as they are likely to have their rent paid by the state through housing benefit. It is those who are not eligible for this level of support, but who can’t afford to live in privately rented accomodation, who will be hit hardest by this rent increase. These tenants tend to be working people, who often rely on some form of Government support to help make ends meet.
The financial assistance that this group of tenants are eligible for won’t be increasing to cover their higher rents, and so Government’s saving on the deficiency here will be paid for directly out of their pockets. Incomes are already being squeezed by a whole raft of new Government charges, like increased bus fares, parking charges and the toilet tax. This is why a number of local authorities were pushing for the introduction of means testing before any further increases in rent levels.
How can the Government justify cutting assistance to social housing tenants without assessing if the current systems to provide this assistance are fit for purpose?
Instead of dealing sensibly with the issue of means testing Goverment has decided that they would rather push another charge onto working families.