Wednesday, 12 November 2008

Council homes for life ‘to be scrapped’

People living in council houses will no longer be entitled to a subsidised tenancy for life under Whitehall proposals to address waiting lists.

New tenants would have fixed-term contracts under the plans, with regular reviews every few years, The Times has learnt. If a tenant’s financial position improved he or she would be encouraged to take an equity share or to move to the private sector. If they refused they could face higher rents. The right to a council home is also likely to be tied to a requirement to have or be actively looking for a job.

The measures are being considered by Margaret Beckett, the new Housing Minister, in the most radical shake-up of the social housing system for decades to ensure that those who deserve council homes get them.

At the moment anyone allocated a council home can usually stay for life, irrespective of circumstances. People in council homes paying subsidised rents can end up relatively wealthy, and in some cases they can bequeath the tenancy to their children. Frank Dobson became a Cabinet Minister while living in a council flat in his London constituency.

However, with nearly four million people, or 1.6 million households, on waiting lists for social housing, and only 170,000 coming available each year, the Government wants to ensure help for the most needy. In many poor areas, one in five people is waiting to be housed. The problem will worsen in the next few months as families fall into negative equity and their homes are repossessed.

Caroline Flint, the previous housing minister, drew up a Blairite set of reforms. These included the contentious plan to link council homes to a requirement to have or to be seeking a job, which The Times understands is still on the agenda.

The Green Paper on social housing was expected to be published this month but Mrs Beckett, who replaced Ms Flint in September, has delayed it until early next year to give her time to look at the options. Although she will be uncomfortable with any punitive proposals, Mrs Beckett is under pressure to produce reforms before the next general election.

The document is expected to set out new criteria for Britain’s stock of four million socially rented homes run by councils and housing associations, but changes will apply only to new tenants. At the moment councils are required to house immediately people who are both homeless and judged a priority, such as pregnant women, families with dependent children, youngsters aged 16 to 17, young people aged 18-21 who are leaving care or those who are leaving the Armed Forces.

These groups will now be under tighter scrutiny to stamp out abuse. Officials claim that there is anecdotal evidence of parents falsely claiming irretrievable family breakdown to help their children to get a council house.

Ministers are also keen to ensure that more of those with low-paid jobs are able to get council homes.

Whitehall officials said that ministers were looking at proposals from the Chartered Institute for Housing, which represents housing officials. It has proposed fixed-term tenancies in which anyone granted a council home would have it initially for three or four years before a review. Those whose circumstances had improved would no longer be able to remain on subsidised rents. A spokesman for the institute said that no one would be evicted under its plan, but that they could face higher rents. At present, social housing rents rise each year by the retail price index plus half a per cent. Under the new plan higher-tax payers could pay nearer the market rate.

Housing charities urged ministers to reject the proposals. Adam Sampson, chief executive of Shelter, said: “At a time when unemployment is rising sharply it would be perverse of government to mount an attack on social housing. While better services and independent advice about their options could help improve some tenants’ circumstances, threatening rent increases will create more problems than it will solve.”

A spokesman for the Communities Department said that no decisions had been made. He said: “Margaret Beckett is considering all the evidence and arguments in favour of changes to the current system. We expect be in a position to signal how we intend to take this forward in the new year.”

Grant Shapps, the Shadow Housing Minister, said: “The Government have created their own crisis by failing to build enough affordable housing over more than a decade. The Conservative Party built an average 40,000 affordable homes a year when in office, but under Labour this dropped to 22,000 a year. The Green Paper should not be just a panic response to high waiting lists.”

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