A council in Cambridgeshire is considering legal action against the government over the impact of welfare cuts and a policy to reduce social rents by 1% for the next four years.
Cambridge City Council leader Lewis Herbert (Lab) said he wanted to talk to other councils with housing stock which had been affected by announcements in chancellor George Osborne’s Budget.
The city has estimated cutting social rents by 1% for the next four years will result in a loss of almost £15m income to the council. LGC reported on Monday that a survey of 73 districts with housing stock carried out by the District Councils Network found the cut would see them lose about £603m in anticipated income by the end of the decade resulting in about 3,700 fewer homes being built.
Cambridge is also concerned about the impact of cutting the benefit cap to £20,000 a year, withdrawing housing benefit for 18- to 21-year-olds, and the ‘pay to stay’ policy which will require households earning more than £30,000 a year to pay market rents.
Cllr Herbert told LGC the benefit cuts combined were a “clumsy, irrational and unreasonable attack on housing budgets” and councils’ abilities to build homes.
He said the council would talk to others “in the same boat” before deciding what “legal channels and opportunities for challenge we will use”.
“We will investigate all of the opportunities available to us and others to work together to challenge this and expose how unreasonable and irrational this is,” he said.
Ray Manning (Con), leader of neighbouring South Cambridgeshire DC, said the benefit changes would have a “big impact” on his local authority and while the council would not be interested in taking legal action against the government it would be lobbying ministers.
He told LGC the council had been planning to build 1,000 homes over the next 30 years but the benefit changes meant they would now only build between 500 and 700 new homes.
Cllr Manning said it was “slightly unfair” that the proposed ‘pay to stay’ rules meant councils had to send any additional rent receipts back to the Treasury while housing associations could retain them. He said a business case was being put together to ask housing minister Brandon Lewis if additional rent receipts on council homes could be used to help subsidise the worst affected residents instead.
“We’re a Conservative-controlled council so this is not left-wing socialism; it’s just logical,” said Cllr Manning.