See below from this weeks Gazette 26.01.24…
Unfortunately, leaseholders constantly labour under the illusion that their huge cyclic maintenance bills are subsidising tenants rents! So, in order to debunk this assertion I recently requested clarification on this issue under the “Freedom of Information Act”.
According to the council no less than 33% of council rents are allocated to repayment of the tenants portion of costings associated with cyclic / major works on council estates. So, why are rents so high, when the tenants annual rental increment is set by Government, (currently 24/25) at CPI +1pw.
Obviously, it takes a great deal of money to run a borough, and since tenants rents are the main source of income to the Housing Revenue Account the council have to find alternate ways to Balance the Books, pay staff, fund priority projects. Etc. Notably, one innovative area identified, is in it’s issuing of building contracts.
All building contract issued by the council attract a 11-14% charge for council services.Therefore the bigger, and more contracts issued, the higher the contractors bills, and the more the council claws back (Un-ring Fenced) to supplement its coffers. Consequently, this bonus to council funds simply means that the council is collecting extra money from the tenants as well as the leaseholders from subsequent maintenance billing.
Notably, leaseholders receive detailed accounts, and consequently can identify where their money is going, and are able to challenge its veracity, sadly, tenants do not receive similar information and are unaware of what the outrageous bills are costing them personally in their rents!
If the council simply monitor the bills they issue closely, rejecting all forms of over pricing, leaseholders and tenants would not be subjected to this horrendous form of financial blackmail, enforced under the guise of cyclic maintenance / major works, and service charge billing…
Dr Potter (LLB)
Chairman: – ILA