MHCLG Rules Out Pay To Stay Comeback

MHCLG isn’t putting money on a Pay to Stay comeback. The Ministry has put out a statement amounting to a straight denial of a ‘government source’ saying “options around this remain under consideration”. The statement said: “We are not currently working on these plans. The government announced that the policy would not be taken forwards in a written ministerial statement made on 21st November, 2016.” Vaguery around a return for Pay to Stay arose out of a news story on Labour MP Kate Osamor ‘maybe’ having to pay more rent living in a housing association property in north London. Read more on 24housing.

https://www.24housing.co.uk/news/no-money-on-pay-to-stay-comeback/

Compulsory Pay to Stay Scrapped – Parliamentary Statement

Gavin Barwell: “Social housing has a crucial role to play in supporting those in most housing need. To that end, powers were provided for in the Housing and Planning Act 2016 to introduce an income based rents policy, requiring local authorities to set higher rents for higher income council tenants. Since the summer, the Government has been reviewing this policy. 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.” Read more on the Parliament website.

Pay To Stay Meetings Cancelled As Policies Face Delay

Meetings of the government’s Pay to Stay working group have been cancelled as several key measures in the Housing and Planning Act look set to be delayed. The government has cancelled scheduled meetings despite the policy- under which higher earning tenants pay up to market rent- originally being planned for implementation in April next year. It is not clear why the meetings have been cancelled, but sector figures this week said it suggested a delay. Councils have been urging ministers to put the start date back to give them time to prepare. The news emerged days after a senior civil servant admitted the Right to Buy (RTB) extension to housing association tenants is set to be delayed as a result of the Brexit vote. Read more on Inside Housing.

Government Must Delay ‘Shambles’ Pay To Stay

Thousands of Council tenants could face just weeks’ notice of rent hikes of more than 300% unless the Government delays Pay to Stay, Hackney Council has warned. Families with a household income of more than £40,000 (£30,000 outside London) will have to pay extra rent under the new rules. These rent increases are due to be introduced in April, but the Government has still not set out how the system will work or how rent will be collected – leaving the Council just a few months to write to around 20,000 people living in Council housing to ask what their income is, calculate increases and give affected residents notice. Read more on the Hackney Council website.

Council Rents Could More Than Double

Tenants in social housing looking to upgrade to a new home as part of the Slough Borough Council’s £40m investment could have to fork out more than double in rental costs. The council will invest £40m in building new properties for social rent. But the amount tenants pay for these properties is set to sky rocket, as the council says it has to generate its own funding for affordable rental homes as there is no national funding available and the ‘Pay to Stay’ policy means that prices will rise anyway. Councillor Rob Anderson said: “For someone who has a two-bed house and has been on the waiting list for 10 years for a three-bed home, their rent will rise from £474.80 a month to £1,061.19. Nobody on a low income is going to be able to afford that.” Read more on the Slough Observer.

Government Issues Commencement Order For Pay To Stay

The government issued the Housing and Planning Act 2016 (Commencement No. 3) Regulations 2016 on 3 October 2016. These Regulations bring into force various provisions of the Housing and Planning Act 2016 on 1 October 2016. Regulation 2(a) brings into force the part of the Act covering Pay to Stay which makes provision relating to rents for high income social tenants of local housing authorities and private registered providers of social housing. Publication of this Commencement Order has caused concern among some ARCH members as the government is yet to set out detailed Regulation and Guidance on how the scheme will operate. Read more on the ARCH website.

Ministers Consider Pay To Stay Exemption

The CLG will consider exempting council tenants from Pay to Stay in areas where social rents and market rents are similar. Civil servants from CLG have drawn up draft regulations for ministers which include an exemption in areas where the difference between market rent and social rent is very small. Under the latest regulations, councils would compare the market and social rents in the area, deduct an administrative cost per tenant which is likely to be set by the government, and if the difference between the rents is small then a council could receive an exemption. Read more on Inside Housing.

£1m Admin Cost Estimate On First Year Of Pay To Stay

A London borough estimates that Pay to Stay could cost it £1 million in first year administration costs alone to make IT and other system and process changes happen.  The borough of Camden has put a £1 million price on the bureaucracy that Pay to Stay will generate.  Camden concedes to “little detailed information” about how many households are likely to be affected by Pay to Stay, but estimates indicate that as many as 13% of tenants may be affected - against the government’s national estimate of 7.4%. Read more on 24dash.

LGA Calls On Government To Rethink Pay To Stay Policy

The Local Government Association is urging ministers to rethink the Pay to Stay policy. It comes as new analysis reveals that more than 70,000 social housing tenants could face rent rises averaging £1,000 a year under the policy. The LGA is warning the policy would create a bureaucracy causing stress to families, further costs to councils, and financial returns to the Government far lower than it originally forecast. It is also warning administrative complexities now make implementation from April 2017 impossible. Councils need to invest millions in new IT systems, hire new staff and write to more than a million social housing tenants to try and understand household income and approve individual tenant bills by January.  Read more on the LGA website.

Council Urges Ministers To Use HMRC For Pay To Stay

Southwark Council has written to ask the Government to use its own tax office to pick up the bureaucracy that Pay to Stay will generate. The policy appears to ask local authorities to stump up the administration of means testing council tenants. Those earning over £40,000 in London will be required to pay more council rent. But a £40,000 household income in London is the equivalent of a couple earning the minimum wage and working full time and the council values working households as they help create vibrant and sustainable communities. The immense extra administration that authorities could be required to undertake would be costly, time consuming and in direct contradiction to the Government’s own guidance in the New Burdens Doctrine. Read more on the Southwark Council website.

NHF Propose Pay To Stay Data Solution

The National Housing Federation has set out how they feel associations can best collect data for Pay to Stay.  Although for housing associations the policy is voluntary to implement, 24housing understands some housing associations are looking to compensate for some of income they are losing from the rent reduction. The Federation hopes the data solution will be able to give members enough evidence to decide whether they would like to implement the policy or not. Read more on the NHF website.

The Housing And Planning Act Is A Direct Attack On Local Government

Back in 2009, David Cameron said his party would give local councils much more power and responsibility. This agenda was the basis of the 2011 Localism Act. But those reforms have been shattered by the 2016 Housing and Planning Act. The end to lifetime council tenancies, the pay-to-stay rule increasing rents for council tenants earning more than £40,000, and provisions to force local authorities to sell off their high-value homes, will effectively kill off council housing. The extension of right-to-buy privileges to housing associations also threatens to cause a wider decline in affordable housing. But this is not just about housing. The new Act also has immediate implications for local democracy, by giving no fewer than 32 new powers to the secretary of state for housing. This means local authorities face further financial pressures and will lose vital powers once granted by the Localism Act. Read more on the Guardian website.

Government Urged To Delay Pay To Stay

Councils and arm’s length management organisations are calling on ministers to delay the introduction of Pay to Stay to avoid a ‘tight’ timetable, after the government failed to publish regulations before the parliamentary recess. Local authorities were expecting draft regulations on Pay to Stay to be published before the end of the parliamentary term last Thursday. However, the regulations, which need to go before both houses of parliament, are not now expected until September at the earliest when parliament returns. This has caused concern that without draft regulations to work with over the summer, local authority landlords may struggle to implement Pay to Stay- under which higher-earning tenants pay up to market rent - from next April as intended. Read more on Inside Housing.

Delay Likely On Key Housing Act Regulations

Publication of the Higher Value and Pay to Stay Regulations is likely to be delayed. CLG had expected the Regulations and Guidance to have been available this month (July) but could give no firm date by when local authorities could expect to see them indicating that a decision on the Regulations and Determinations on the definition of higher value voids and RTB levy was now unlikely to be made until September this year - although there was a possibility that some information on the draft Determination may potentially be available for informal consultation beforehand.  With the regulations on higher value voids subject to scrutiny by both Houses of Parliament, timing is crucial. At this stage there is a possibility that the first payments from local authorities may not be levied until 2017/18 or later. Read more on the ARCH website.

Pay To Stay Should Be Slowed Down

Many questions remain about how the policy will work in practice. Will social tenants face a sudden, steep rise in rent when they reach the top of the income thresholds? Will Pay to Stay bring people into eligibility for housing benefit, who wouldn’t have been before? Will local councils have to charge tenants full market rent if tenants have not been able to prove their incomes? Perhaps the most pressing of them all is how councils can be ready in time for an April 2017 start. We expect draft regulations to come into force in the autumn. This means that from around Christmas, councils will have to start sending people letters to inform them that their rents will rise the following April. The number of households affected, at first, will be small. But to implement the policy, councils will need to verify the income details of many thousands more of their tenants – or charge them the full market rent. Read more on the Shelter blog.

Councils Sound Warning Over Pay To Stay Timetable

The government is facing pressure from councils over the “horrendously short” timescale required to implement its controversial Pay to Stay policy by April next year.  At a recent meeting with civil servants local authority officers said they will struggle to introduce systems to carry out the policy in time.  It is understood that under a draft timetable, councils will be expected to gather information from tenants on their earnings from September and October. By Christmas, councils will have to start preparing people with notices to raise their rents in April 2017. If tenants do not disclose their wages, then it will be assumed that they earn more than the £31,000/£41,000 threshold. Read more on Inside Housing.

Timetable For Introduction Of Pay To Stay

CLG officials have set out the timetable for the introduction of the 'pay to stay' scheme for council tenants with household incomes of over £31,000 (£40,000 in London).  The aim is to introduce the scheme from April 2017. Thresholds will be up-rated annually by inflation (CPI) and tenants in receipt of Housing Benefit or Universal Credit will be exempted from the policy. However, all other tenants will be required to declare their total household income to their local council to enable the council to calculate how much additional rent they will be expected to pay.  The additional rent is expected to be 15% of any income over the threshold or the full market rent for the property whichever is lower. Read more on the ARCH website.

The Housing And Planning Act 2016 – What It Means For ALMOs

Now it’s been passed, what does the Housing and Planning Act 2016 mean for ALMOs and their councils? Well in many ways we still don’t really know.  This is because much of the detail is still to be set out in regulations, which are expected over the summer.  But from what we do know already there are a number of worrying impacts on ALMOs, their councils and the communities they serve.

·         The forced sale of higher value voids

·         Pay to stay compulsory for council tenants

·         Phasing out of lifetime tenancies

·         ALMOs as Registered Providers

Read more details on 24dash.

Government Faces U-Turn Over ‘Pay To Stay’

“Pay to stay”, if implemented, would see tenants charged market rates once they earn over £30,000. Critics say this would result in sharp increases in rent that would force working families out of council homes. Peers voted by 240 to 176 in support of a Labour-led amendment to give local councils the discretion over whether to implement the charge, rather than making it mandatory. They then voted 281-179 to back an amendment to lower the “taper rate” from 20p to 10p in every pound, so lower-paid families would not be hit as hard. The hat-trick of defeats was completed when the Lords voted 266 to 175 to increase the “pay to stay” threshold by £10,000. Read more on the Huffington Post website.

TPAS: Pay to Stay Is 'Aspiration Tax'

The government’s Pay to Stay policy is an “unfair tax on aspiration”, TPAS has said. The Tenant Participation Advisory Service (TPAS), along with campaign group Social Housing Under Threat (SHOUT), has published case studies which it believes shows the policy has negative impacts.  The paper says the government’s plans to increase rents up to market rent for social tenants with incomes of £30,000 or more (£40,000 in London) will hit people who are not well off and cause hardship. TPAS and SHOUT also argue the policy will increase welfare dependency and be difficult to administer. The policy is compulsory for councils but voluntary for associations. Download a copy of the document from the TPAS website.