PORTSMOUTH City Council has won a battle against a ‘stealth tax’ levied by the government – saving it tens of millions of pounds.
It currently has to pay the government millions of pounds each year from its housing rent.
The £6.3m given by Portsmouth last year was handed to councils in poorer areas, with some of the cash also kept by the Treasury.
The amount was set to increase each year, totalling £450m over the next 30 years.
But after a long campaign by the city council and its tenants – which included a petition delivered to Downing Street – the Department of Communities and Local Government announced the scheme will be changed.
The government’s new proposals – planned to start in April next year – would mean the council has to pay the government £80m over the next three decades.
Council housing finance manager Peter Pennekett said: ‘We’re pleased with the new system.
‘We and our tenants have worked hard to get it changed, with a three-year campaign.
‘Other councils joined us and we’re delighted that the last government, and now this one, have listened and taken notice.’
Mr Pennekett admitted if the changes had not been made the council would have had to get rid of its 20,000 properties in the city and Havant within six years.
He said: ‘Under those plans, we’d have been unable to keep hold of the housing.
‘It would have been unsustainable in just six years and we’d have had to get social housing landlords to take over.
‘The campaign was something we led on and the changes mean we can keep the housing.
‘The new scheme’s not perfect, but it’s better than what we had before.’
Interest will have to be added to the £80m, meaning the council’s annual payments would start at around £4.5m per year, falling as the total debt dropped.
Mr Pennekett said: ‘We’re not totally happy about that figure, but that’s how the government values its national housing debt and we all have to pay some of that off.
‘We’ll accept it as it’s an improvement.
‘We’ll use the money for the things it’s supposed to be used for, such as maintaining, improving and rebuilding our housing stock.’
Cllr Steven Wylie, who’s in charge of housing in Portsmouth, said: ‘I have worked with council tenants for many years on this issue, as we all feel passionately that Portsmouth tenants’ money should be reinvested back into the city’s properties and local areas, not going to other areas of the country.
‘We’re still waiting to see the final proposals and have high hopes that reform is on its way, but I fear it may fall short of what’s best for the city.’
The city’s residents’ consortium link group issued a statement saying: ‘We’re very pleased that when you make a noise, it seems the government listens.’