Croydon council tenants face an “astonishing” hike in rents from April according to the council.
Rents are set to rise by six per cent, double the current rate of inflation, under the government’s national rent-setting regime.
The move has sparked incredulity from the Conservative council who are further angered by the fact Croydon will receive a fraction of the money given in rent.
Deputy leader and cabinet member for housing Dudley Mead said: “The increase at a time of recession is unacceptable.
“To take away £17.6m from the most vulnerable residents is astonishing.
“I don’t think any of our residents will be reassured in the knowledge that they are contributing to the £200m Labour are squeezing out of council tenants nationally to balance the books.”
Every local authority in the UK is obliged to make incremental annual increases until a standardised rent is introduced. Councils that fail to meet the targets face potential financial losses.
The rent increase will generate an extra £3.5m in revenue - but the council will see only part of this amount.
Hannah Miller, executive director of adult services and housing, said: “Overall, the government will be taking £17.6m from Croydon’s housing account this year to redistribute to other housing authorities across the country - an increase of £1.6million on last year.
“However, the proposed rent increase is in accordance with government guidance. The council has no flexibility to request a lower figure even though we understand many tenants are facing financial pressures at this present time.
“It is essential that Croydon complies with national guidelines in order to allow us to maximise housing subsidy and housing benefit arrangements for the borough.”
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