Council tenants in Nuneaton and Bedworth will pay more in rent amid eye-watering 'legacy debt'

[dutchman]

New council rent charges will come into force in April



Council tenants in Nuneaton and Bedworth will pay more in rent amid revelations about an eye-watering 'legacy debt'. Those who live in council properties across the town will be asked to pay 7.7 per cent more in rent from April.

In revealing the Housing Revenue Account budget for 2024/25, councillor Clare Golby, cabinet member for housing at the Town Hall, said that they did face a number of challenges.

"A rent increase of 7.7 per cent is proposed, a measure that may not be popular, but one that is necessary to ensure the long-term financial health of our HRA," said Cllr Golby, who is also the deputy leader. "I also need to be clear that this takes our average rent to £95.69 a week, well under the local housing allowance which is £155.34 and the majority of our tenants are eligible for assistance with rent."

She explained that the HRA, which funds all council properties and works, is currently undergoing a major review after the ruling Tories unearthed findings that they claim could have led to bankruptcy for the Town Hall.

Cllr Golby said they made the 'awful' discovery after taking over power from Labour. "To put it simply, the business plan we inherited would have left us with an outstanding debt, a debt close to £300 million pounds, that's over a quarter of a billion pounds for capital projects.

"Not only would we have had to continuously borrow to pay back borrowing but at the end of the business plan term we would have still been left with an outstanding debt of over a quarter of a billion pounds.

"That is a financial extinction level event for this organisation." She said that the debt dates back to when the council was forced to buy back its council stock from the government and 'awful' decisions were made around 2012.

She claimed that rather than having a proper plan in place, the old Labour administration used the debt repayment like having a mortgage and only paid the interest. "You still have the main debt to clear," she said.

Cllr Golby explained getting to the bottom of the debt and making repayments forms a major part of the review which is being held into the HRA. As a result of this, a one-off, one year budget was proposed with a view to making wider changes to the future housing plans.

"I would like to make it clear that in the meantime, the debt repayments will be managed within the business plan refresh but it won't be anywhere near the levels predicted should we simply have carried on with the current business plan."

"By proposing this Housing Revenue Account budget to the council, we are playing a significant part in building a sustainable legacy for everyone in the borough."

[dutchman]

As far as I know social rent levels are set by the government and are the same everywhere in the country so if there is a 7.7% rise in Nuneaton there will also be a 7.7% rise in Coventry?

[dutchman]

Yep, confirmed by letter this morning, 7.7% rise for all of Citizen's tenants, nothing to do with 'legacy debt'.

Some social housing tenants could see a bigger rise in so-called 'service charges' which are not limited by the national formula for rent but this will not apply to Citizen.