Triple Whammy for Guildford Tenants as Motion to Reduce Rent Hike Fails

Published on: 12 Feb, 2024
Updated on: 13 Feb, 2024

By Chris Caulfield local democracy reporter
and Martin Giles

Council tenants struggling in a cost of living crisis will be hit with a triple whammy of rising tax, fees and rent.

Guildford Borough Council approved a 7.7 per cent rent increase for its social tenants as well as a 2.99 per cent hike tax for all its residents.

Fees will be going up, including for bins and parking charges, as the council looks to bring in a balanced budget and avert the risk of bankruptcy, the council meeting heard on Thursday, February 8.

This is on top of the 4.99 per cent levied by Surrey County Council and 4.2 per cent imposed by Surrey Police.

Those living in areas with parish councils may see additional increases.

The council also confirmed it would cut capital expenditure by £100 million and release £50 million through the sale of assets.

Councillors said the drastic measures were needed to close a budget gap of £3 million on last year and to help scale back its £300 million debt that had been projected to hit £600 million by the end of the decade.

Cllr Richard Lucas

Cllr Richard Lucas (Lib Dem, Ash Vale), portfolio holder for finance, said: “The alternative to not passing this budget would increase the risk of 114 [notification that the council cannot balance its budget]. This would mean that all councillors are removed from the decision making process.

“It also means that all non statutory services would be under the knife.

“If you want to see what this entails, look at our neighbour Woking Borough Council. This budget gets us out of that mess.”

The council is also set to sell millions of pounds worth of assets, although details remain unclear – save that about 75 sites have been identified for disposal. It said more could be sold if this fails to bring in the requisite income.

The council also owns and manages more 5,200 houses that it rents as social housing. It is forecast to have a surplus of £7.816 million in the fund next year.

Rents will be increased by 7.7 per cent.

By the narrowest of margins an amendment to see tenants’ rents increase by only 5 per cent was defeated when the borough’s mayor, Masuk Miah, used his casting vote to side with the ruling group – as per convention.

Cllr Joss Bigmore

Cllr Joss Bigmore (R4GV, Merrow) introduced the failed amendment. He said: “To follow the (government) guidance, and that’s all it is, of 7.7 per cent is wrong.

“Universal credit is only going up by 6.7 per cent.

“Last year we ignored the guidance, the actual guidance was 11 but the government capped it at seven. We decided that five per cent was fair.

“That was a way of protecting some of our most vulnerable residents in social housing from the cost of living crisis and to be frank I don’t see what changes this year.

“We should think again, we should look at a social rent increase of 5 per cent.”

Cllr Julia McShane

Leader of the council, Julia McShane (Lib Dem), who represents Westborough ward in which many council tenants reside, said: “Obviously we are concerned in the current economic climate that we are able to support our tenants as much as we can.”

Around 92 per cent of the council’s tenants are on social rent, 60 per cent get housing benefit or universal credit to cover rent payments.

Cllr George Potter (Lib Dem, Burpham) said rent went up last year by five per cent when inflation was more than double that.

Cllr George Potter

He told the meeting: “Over the past two years council tenants rents will have, in real terms, risen by less than inflation over the same period. Unlike most people in the private sector council tenants will be seeing a real term reduction in their rents.”

After the meeting Joss Bigmore told the Dragon: “I was very pleased that the Labour Party, the Conservatives, and the Guildford Greenbelt Group supported my motion to reduce the shocking increase in social rents proposed by the Liberal Democrats.

“Unfortunately it was not enough, the vote was drawn, and the Mayor (a Liberal Democrat) voted to increase rents well above current levels of inflation.

“Against a backdrop of a cost of living crisis, and poor performance from our housing team the decision to hit those families with a 7.7 per cent increase in rent is hard to understand or justify. This year GBC will profit £8 million from its tenants, adding to the existing £80 million of reserves, this rent increase is grossly unfair, and a reward for failure.

Cllr Philip Brooker

Cllr Philip Brooker, the leader of the Conservatives, the second largest party group at GBC, said the the rent increase was about twice the current rate of inflation and would punish Guildford’s council tenants for the council’s mistakes.

He said: “Conservatives unanimously supported the amendment to restrict the rise to 5 per cent. There were some abstentions from the Lib Dems despite their leader offering a bribe to her backbenchers of £60,000 (£11.50p per household), by increasing the hardship fund – an astonishing public act of panic as the vote became uncertain.

“Cllr Bob Hughes speaking for the Conservative group made clear that this was a political decision as the housing account had £millions of reserves. Tenants are being made to pay for LibDem failure to control spending with millions being overspent during their first term, with fraud investigations now underway.

“Every council tenant has been badly let down by the people they elected to represent them.”

Cllr James Walsh

And Labour’s leader James Walsh was also critical: “While rents do need to increase to enable the council to provide repairs, replacements, refurbishments and rebuilds to our council housing, Labour’s position is that the council must also consider the severe financial pressures faced by many people in Guildford at the moment.

“We supported the amendment for the smaller increase to council rents because there is no immediate pressure to increase it by 7.7 per cent. The housing account already has millions of pounds in its reserves and a lower increase of 5 per cent would still see £70 million added to the pot over the next few years.”

“Residents have received a mixed service in recent years due to problems in the housing repairs department that are now being addressed. Voting for a lower increase was simply the right thing to do in these circumstances and we also voted to increase the hardship fund by £60,000 to £100,000 in recognition of the difficulties people are facing.”

An investigation into a £16 million overspend and possible fraud in the Housing Revenue Account continues.

See: Police Now Leading GBC’s Suspected Fraud Investigation