Government Abandons ‘Pay to Stay’ Proposal

Becky's BlogSERTUC ‘Decent Homes for All’- Update 1.2: Government Abandons ‘Pay to Stay’ Proposal

The government has scrapped its plans to force councils to charge tenants who are ‘higher earning’ rents of up to market rates. ‘Pay to Stay’ is dead. But the proposal for fixed term tenancies for social housing tenants remains, and household income will be one of the determining criteria for renewal applications, so the threat of a variant of ‘Pay to Stay’ still exists.

Housing Minister Gavin Barwell announced the ‘Pay to Stay’ policy was being dropped in a Parliamentary Statement, 21 November 2016.

The policy was proposed by then Chancellor, George Osborne, in July 2015, and would have seen social tenants with a household income  over £31,000, or £40,000 in London, charged market rents.

But the government has backed away from forcing the policy on housing association tenants in December. The policy had been vigorously opposed by trade unions and progressive housing campaigns, such as Defend Council Housing and Axe the Act. It is clear that there was considerable opposition to the proposal in the House of Lords. Local Authorities had called the proposal ‘unworkable’.

More than 70,000 households were set to be affected by the changes, pushing tenants’ annual rent up by more than £1,000 a year on average.

Barwell announced that the ‘Pay to Stay’ policy would no longer be compulsory for councils. He said: “We have listened carefully to the views of tenants, local authorities and others and as a result, we have decided not to proceed with a compulsory approach. Local authorities and housing associations will continue to have local discretion. The Government remains committed to delivering its objective of ensuring social housing is occupied by those who need it most. But we need to do so in a way that supports those ordinary working class families who can struggle to get by, and in a way which delivers real savings to the taxpayer. The policy as previously envisaged did not meet those aims.”

However, the government intends to continue with its plans to enforce mandatory fixed term tenancies for council tenants.

On this Barwell said: “This will better enable councils to give priority to people with the greatest housing need. Councils will review tenancies at the end of each fixed term to ensure that tenants still need a socially rented home. The government’s guidance to councils will make clear that they should take into account a household’s financial circumstances when looking at this.”

Lord Gary Porter, chair of the Local Government Association, added: “We have been working hard with the Government to make sure it was aware of the difficult, lengthy and costly process in seeking to implement the policy – which was likely to cause anxiety for families and be hugely unpopular with tenants.”

‘Pay to Stay’ has been a voluntary option for ‘registered social landlords’ for many years, with few taking it up, citing the logistical and administrative difficulties. Under the current rules, social landlords can charge tenants with an income of over £60,000 market or near-market rent.

Source of information: Inside Housing: see http://www.insidehousing.co.uk/ihstory.aspx?storycode=7017754 and BBC at http://www.bbc.co.uk/news/uk-politics-38058402

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