Her Majesty’s Revenue and Customs should administer the implementation of the government’s pay to stay policy, according to Southwark LBC.
The borough’s cabinet member for housing Stephanie Cryan (Lab) has written to housing and planning minister Gavin Barwell (Con) expressing concern about the “bureaucratic nightmare” and cost to councils of means testing tenants.
In the letter, a copy of which has been seen by LGC, Cllr Cryan said requiring local authorities to administer the policy would be “an immensely costly and time consuming burden” which she claimed was “contrary” to the government’s new burdens doctrine which requires government departments to justify the placement of new duties on local authorities.
Southwark has asked the Department for Communities & Local Government to provide the rationale behind the policy’s proposed implementation.
Cllr Cryan thought the Housing and Planning Act indicated local authorities would be required to stump up the administration costs for means testing council tenants up front.
HMRC would be “better placed and more cost effective” to carry out the administrative role, said Cllr Cryan as it already collects data on household incomes.
She also raised concerns about how the policy would impact Southwark’s 26,000 self-employed people due to their “fluctuating weekly incomes”. Cllr Cryan claimed self-employed council tenants would “effectively have to file their tax returns twice”.
Referring to the policy in general Cllr Cryan had “serious concerns” it would “act as a disincentive to work because of potentially significant increases in rent”.
She added: “We continue to believe that this is the wrong policy but if the government does continue with implementation we believe it is the government and not local councils who are best set up to administer it.”
LGC reported this week how research by Savills for the Local Government Association estimated 70,255 households will earn more than the threshold above which they will be required to pay additional rent for their council homes.
It estimated this would generate an extra £75m a year in increased rents before administrative costs are deducted, rather than the £365m forecast by the government for 2017-18.