By Grainne Cuffe, BBC Local Government Correspondent
Thousands of council tenants face a rent rise in line with inflation, after four years of a freeze.
Town hall chiefs have approved a rent increase of 2.7 per cent for their tenants in Lambeth.
Service charges for leaseholders will also increase after cabinet members agreed a Housing Revenue Account (HRA) budget that “highlights the incredible pressures that councils are facing across London on their housing resources”, according to cabinet member Councillor Paul Gadsby.
The housing lead told the cabinet: “The new Government has made much of its claim that austerity is over.
“But in truth for many councils and their HRAs, these are just pretty words with little solid delivery from ministers.”
The Welfare Reform and Work Act 2016 required local authority landlords to reduce rent by one per cent and cap it for four years.
This is the first year since that councils are allowed to increase rent, and Lambeth plans to raise it by the maximum of the Consumer Price Index (CPI) inflation rate plus one per cent.
“This year sees the end of an enforced rent reduction that has occurred over the last four years and which stripped away £28.5 million out of our budget during that four-year period, which is a huge slice out of our income.
“This has come to an end and like most London boroughs we’re increasing rents by the allowed element, which is one per cent above inflation, which will help us to continue to maintain residents’ services while being affordable to our tenants,” said Cllr Gadsby.
He said there were some “positive glimmers” in the report that he presented to cabinet on Monday (January 13), including extra money for repairs, a new in-house repair service “off the back of a ground-breaking report from a group of Lambeth Council tenants”, and the HRA having “reasonable reserve levels”.
“That being said there are a good couple of pages advising on the financial pressures we are facing, that includes funding the last phases of the Lambeth Housing Standard and in particular expenditure on fire safety.
“On fire safety, we are in the process of installing sprinklers in sheltered accommodation in nine high-rise blocks in the borough.
“This alone is costing £2.9 million and as yet Government promises to fund fire safety across the country have just not materialised.
“Residents’ safety is a priority for this borough and we will spend what we need to keep residents safe but in my view the Government needs to fund new a new housing standard on the scale of the LHS for councils so that all of us can afford the packages that they expect us to implement.”
Service charges for tenants are increasing by £1.90 per week, while heating and hot water will go up by 17p per week.
The report recommends basing leaseholders service charges on 2019/20 expenditure levels, “with estimates issued around April 2020 and final charges for 2020/21 being confirmed by September 2020”.
Cllr Gadsby added: “We are facing an era of extreme challenge, as all London boroughs are, and central Government investment is needed to address many of the financial costs that we face.
“The Government has promised a lot of change in the aftermath of its election bid but when it comes to housing we’ve not seen any of those promises materialise.”
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