Why council house rent is dropping in Portsmouth – and the millions it is costing the city council

COUNCIL house tenants are set for further rent reductions despite the 'ridiculous' discount costing the local authority more than £7m in three years.
Portsmouth City Council housing cabinet member Councillor Darren Sanders outside Horatia House in Portsmouth Picture: Malcolm WellsPortsmouth City Council housing cabinet member Councillor Darren Sanders outside Horatia House in Portsmouth Picture: Malcolm Wells
Portsmouth City Council housing cabinet member Councillor Darren Sanders outside Horatia House in Portsmouth Picture: Malcolm Wells

Portsmouth council's head of housing, Councillor Darren Sanders, this week approved a government imposed reduction of around one per cent on social housing that will apply for the 2019/20 financial year.

This will mean the average social rent in the city will be £84.58 per week, down from £85.24.

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Rent across council housing nationwide has seen the same reduction every year since 2016 as part of a Tory government commitment.

A finance report from Portsmouth council estimated that the decrease amounted to a loss to the housing revenue account (HRA) of up to £2.5m a year.

Councillor Darren Sanders said: 'It was one of those plans that when it was announced local authorities everywhere said "what are you doing?"

'Before then councils were allowed to reduce rent as they saw fit and each council budgeted for that.'

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He believed it meant work on improving social housing in the city has been affected as a result.

'That £7m we could have spent on making people's homes better,' he said.

'It is essentially robbing Peter to pay Paul.

'It has also artificially reduced the level of social rent and widened the gap between social and affordable housing.'

The commitment to the scheme is only until 2020, when social rent could be subject to rise.

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Cllr Sanders said: 'That is something that will have to be decided in the future. It would not surprise me if that were the case.

'We are lucky in Portsmouth that we still have plenty of reserves in the account but we don't want to use that until suddenly it runs out. That is why we are creating sustainability plans that consider long-term solutions.'

However, bills, such as electricity, will rise for council house tenants, in line with inflation.

Cash from the HRA was also taken to cover the costs of re-housing residents of Leamington House and Horatia House, which came to £1.6m.

The cheapest social housing in the city is for studio flats set at £65.80 a week come April this year, and the most expensive are six-bed houses at £172.83.