Local authorities could have to slash spending by £269m over four years, according to research by the London Councils coalition
The London Councils group has pushed for a rent convergence rate of at least £3 a week, ahead of the government’s autumn budget announcement.
Recent analysis from the cross-party coalition suggests that local authorities in the capital will have to cut spending on council housing repairs, management and resident services by £269m over the next four years due to dwindling resources.
While boroughs have emphasised rent convergence as their “top priority”, the group has also called for the introduction of a “London formula rent reset”, which gives boroughs extra flexibility over setting social rents to reflect London’s high property and maintenance costs.
Grace Williams, London Councils’ executive member for housing and regeneration, said: “Boroughs are determined to build new council housing and to improve standards in existing homes.
”However, at a time when boroughs want to invest more, the squeeze on our housing resources mean we are instead in a state of managed decline, and we find ourselves forced to plan significant spending reductions.
“London faces the most severe housing pressures in the country, with one in 50 Londoners living in temporary accommodation and in need of a permanent home.
”We are keen to work with ministers in ensuring that a renewed approach to rent convergence is fair for tenants, puts council housing budgets in a healthier position, and enables the investment in standards and new social homes we all want to see.”
>>See also: LGA calls for ‘minimum’ £2 a week rent convergence with flexibilities for further increases
>>See also: Rent convergence and decent homes: getting the balance right
London Councils has argued that a £3 convergence rate could raise an additional £588m for council housing budgets in the capital over five years. It also emphasised the need for fairness and consistency for tenants, who could be paying varying amounts of rent for identical, neighbouring socially rented properties under the current rental model.
Local authorities own and let around 390,000 social homes and house more than one in 10 London households.
The G15 group of London’s largest housing associations also supports the call for a £3 rent convergence mechanism, citing the need to restore social housing finances and address inequities in the rent system.
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