Edinburgh's council tenant rent freeze raises a big question about how social housing is funded – Chas Booth
In the negotiations over Edinburgh Council’s budget this year, Green councillors worked with other parties to secure a rent freeze for council tenants. Cllr Chas Booth explains why.
Edinburgh’s council rents are the most expensive in Scotland by some way and nearly double the weekly rate of the lowest Scottish council rents in Moray.
So when council officers proposed a two per cent increase in rents next year, I paused to reflect whether this was the right time. Everyone has had a difficult year, but those on the lowest incomes more than most, and that includes many of our council tenants.
A rent rise, which would have added another £100 a year for those already on low and fragile incomes, is significant, particularly at a time when many have lost jobs, been furloughed or forced to work reduced hours. It’s also a year when repairs have been reduced and improvement programmes delayed, for understandable reasons.
So is it the right time for a rent rise? Up to 80 per cent of council tenants receive some support with their housing costs, but only half get support in full. The other half would see at least some hit from a rent rise, especially when inflation is running at under one per cent.
I have heard some arguments in favour of a rent rise. The first is that a two per cent rise had support from the majority of tenants in the council’s annual survey. But the way the question was asked is not posing a direct choice between a rent rise and a rent freeze. That was highlighted by Edinburgh Tenants Federation when I met them before the budget, when they argued strongly for a freeze.
The second argument is that rents link directly to the long-term investment programme. If there is less rent income, it is argued, there will be less investment. Council officers said that a freeze might reduce income by £2m next year but over a 30-year period it would result in £94m less.
But that is in the context of a £2.8 billion programme over the next 10 years alone. The scale of difference caused by a single-year rent freeze is less than our housing staff have to factor in with year-on-year revisions to the investment plan anyway. In other words, with some adjustments it should be possible to build new homes, to improve existing homes to warm, zero-carbon standards and deliver a one-off rent freeze in this most exceptional of years.
That is why the Green Budget proposed a rent freeze in 2021-22 and why we worked with other parties who had the same aim. But the debate it has sparked has proved interesting.
For around a century, council housing – homes for people bypassed by the market – has been provided through relatively deep subsidy from public funds. But over the last 25 years it has become the norm – aside from some grant funding for new-build – that council housing will be self-funded from rents.
That’s saying that the people on the lowest, least-secure incomes will pay their housing costs in full, with housing benefit and Universal Credit if need be.
Perhaps it is time to revisit that assumption.
Chas Booth is Green councillor for Leith and Edinburgh Greens spokesperson on housing and planning