Suspend ‘debt’ payment
The heading of the Advertiser article, “Fears rent cut may hit home repairs budget” was misleading. It is not just a fear. The loss of income from rent will hit the budget for replacing components such as kitchens, bathrooms, roofs etc. The article neglected to point out how much money would be cut despite the fact that our press release included a table showing the cuts in spending for these components. For instance in 2016/17 £2.150 million will be spent on installing new kitchens. However, in each of the following two years only £1 million will be spent. The cuts over 2 years, in comparison with spending in 2016/17 will be: aids & adaptions – minus £400,000, bathrooms – minus £720,000, central heating – minus £990,400, kitchens – minus £2,300,000, roofs – minus £852,000. This adds up to a cut of £5,262,400 over the two financial years 2017/18 and 2018/19.
If the administration had taken our advice and suspended the £5 million annual ‘debt’ payment for the 4 years when the rent cut will apply, these cuts in the capital programme would not be necessary. Even with the extra interest payments resulting from suspending the ‘debt’ payment there would still be £19 million extra to spend over the four years. With the use of £3 million of reserves this would mean the loss of rent would almost be covered.
I’m pleased to see that Lead Member for Housing, Emma Faramarzi, was quoted as saying that the Council “may well need to repay less debt”. However, this decision could have been made this year. Planning the amount of work to be done requires the alignment of contracts. Either the Council’s staff or the contractors they use have to be lined up to do the requisite level of work. It cannot be organised on an ad-hoc annual basis.
Work delayed is more expensive to do in the future. Inflation in the building trade is usually higher than general inflation. Suspending the ‘debt’ payment is the sensible thing to do in the given circumstances. Otherwise a backlog of work will lead to the deterioration of the stock. For the sake of brevity I’ll address the question of the so-called ‘debt’ and under-funding of Council housing in a separate letter.
Secretary, Swindon Tenants Campaign Group