Since 2000, social rents have been set based on a formula created by the Government.
The Government's approach to social rents was last updated in 2022, in its policy statement on rents for social housing.
On Thursday (28 March), the Department for Levelling Up, Housing and Communities (DLUHC) issued guidance on when it would be deemed "inappropriate" for the Government's policy statement to apply in circumstances where it would cause a local authority "unavoidable and serious financial difficulty".
The guidance notes that in considering whether the Government's social rent policy should be disapplied to specified accommodation on financial grounds, the Secretary of State will expect to be provided with evidence that:
- The local authority's Housing Revenue Account (HRA) is at risk of a deficit in either the current or subsequent financial year.
- Complying with the requirements set out in the Rent Standard would jeopardise the local authority's ability to meet legal requirements/obligations, including ensuring the health and safety of its residents.
- All possible steps have been taken to avoid the need for an application to the Secretary of State, including reviewing services and commitments and taking action to minimise costs and curtailing non-essential commitments.
The guidance also sets out how applications should be made and how the agreement will be made between the local authority and the Government.
The full guidance can be read here.
Adam Carey