“GOVERNMENT SHOULD USE HMRC TO FIND OUT TENANTS INCOMES” SAY SOUTHWARK
Southwark council have written to ask the Government to use its own tax office to pick up the bureaucracy that Pay to Stay will generate.
The Pay to Stay policy within the new Housing and Planning Act, appears to ask local authorities to stump up the administration of means testing council tenants, says a council statement.
Those earning over £40,000 in London will be required to pay more council rent. But a £40,000 household income in London is the equivalent of a couple earning the minimum wage and working full time and the council values working households as they help create vibrant and sustainable communities.
“It is a relatively little-known fact that local authorities do not generally means test council tenants – as with the private sector, tenants do not always have to disclose their salary – only prove their ability to pay their rent” say Southwark.
“Council tenants are assessed on their need for housing, which can cover wide-ranging requirements, not necessarily relating to income.
“The immense extra administration that authorities such as Southwark could be required to undertake would be costly, time consuming and in direct contradiction to the Government’s own guidance in the New Burdens Doctrine.
“The Department for Communities and Local Government (DCLG) states in its own guidance that ‘Successive governments have sought to keep the pressure on council tax bills to a minimum through some form of ‘new burdens doctrine’.
“This requires all Whitehall departments to justify why new duties, powers, targets and other bureaucratic burdens should be placed on local authorities, as well as how much these policies and initiatives will cost and where the money will come from to pay for them.”
“The focus within this doctrine is on the general fund and council tax, but Southwark feel the same principles should apply to tenants and its Housing Revenue Account. “Southwark council are writing to ask the DCLG to provide the rationale for why tenants should be treated differently.
“Furthermore, with a larger than average population of self-employed people in the borough (around 26,000 people), the new Pay to Stay legislation will make it almost impossible to ascertain some people’s annual or weekly income as it fluctuates so much, and taxable income is filed to HMRC a year behind the current year.”
Southwark’s cabinet member for housing Cllr Stephanie Cryan said: “I have written to the housing minister to state that this policy is an intrusion on people’s privacy and a bureaucratic nightmare for councils.
“In many cases, it would be almost impossible to prove people’s income and we feel the Government already has an organised body set up for this very purpose and it should follow its own guidance when it comes to burdening authorities with the extra workload.
“HMRC already collects this data and should be responsible for supplying the information.
“Discouraging the entrepreneurial spirit that Southwark is proud of could have a direct impact on our local economy and tenants who run small businesses are already suffering enough in these challenging economic times.
“Self employed people would effectively have to file their tax returns twice and be penalised for their business success.
“Means-testing tenants is an expensive exercise in futility. “It could cost authorities millions in administrative costs and prove nothing more than we already know – that people can either pay their rent or they cannot.” (Source: Southwark council press release)