News / Anger at Westminster as rents set to increase
NO NEW council houses will be built in Shetland for quarter of a century unless Westminster takes action to deal with the SIC’s historic £40 million housing debt.
That was the dire message delivered to members of the council’s executive committee as they reluctantly backed plans to impose a five per cent rent rise on SIC tenants in each of the next two years. The proposed increases still have to be approved at next week’s full council meeting.
It had been feared that rents could have risen by as much as 35 per cent. Instead, the council will use its oil reserves to write off £10 million of the debt, and will externalise the remainder.
But councillors heard that even a five per cent increase each year would be a major stretch for many hard-up tenants amid welfare cuts and below-inflation pay rises.
The spotlight once again shone on the UK government. Many councillors blame the Tory-Liberal Democrat coalition for stalling on three-way talks with the Scottish Government aimed at resolving the debt.
Lerwick North member Michael Stout said the local authority was “bending over backwards to sort out our problems” while the coalition government was “standing with its arms folded doing damn-all to help”. That left him feeling “anger and resentment”.
SIC convener Malcolm Bell said it was a “disgrace” the council, and particularly its tenants, had been left facing such uncertainty.
“Successive governments have dragged their feet,” he said, “and this debt is now long overdue for repayment.”
The council earlier this year put a proposal to the UK and Scottish Governments which would have seen each covering a £10 million share of the debt.
It was incurred building houses to cope with the influx of workers during the 1970s oil boom, and successive governments acknowledged their moral obligation to reimburse the local authority.
Political leader Gary Robinson has led a renewed effort to put the issue to bed in the past 12 months.
Tripartite talks promised almost a year ago finally took place in late October. But it is understood that the UK government’s representative, junior Scotland Office minister David Mundell, had been poorly briefed on the subject.
He had then promised to speak to Northern Isles MP Alistair Carmichael, who is also now secretary of state for Scotland.
It is also believed that senior SIC officials have been struggling for months to get an update from their counterparts at the UK Treasury.
During Monday’s meeting Robinson said things were “really running up to the wire” as the council prepares its 2014/15 budget.
In a statement afterwards he made clear that the council felt it had no option but to act in the absence of a response from London.
“We have done everything we can over the past year to try to resolve this situation,” Robinson said.
“However, without confirmation that the UK government is willing to play its part, we’ve had to make sure we put forward an affordable solution for tenants. If we hadn’t, we’d now be looking at huge increases in council house rents.
“We still see this as a three-way discussion. We’ve done our bit, and the door’s still open for the UK and Scottish governments to make a commitment which would mean we could give our tenants more certainty for the future.”
Hundreds of people remain on the waiting list for social housing – making finance chief James Gray’s statement that the council will “not be in a position to consider any new housing schemes for the next 25 years” all the more alarming.
Gray said that situation was likely to change if the UK government came up with some money to alleviate the debt.
Last Saturday head of housing Anita Jamieson explained the rent increase proposal to tenants at a drop-in session in Islesburgh. The findings of a tenants’ survey will also be relayed to members at next week’s full council.
Ms Jamieson said tenants were relieved that they were not facing a much bigger increase. But there was concern about affordability as “rents are high, other living costs are going up and people’s means of dealing with that are not going up at the same rate”.
Lerwick South councillor Jonathan Wills pointed out that the £10 million being taken from reserves would have earned the council over £500,000 a year in interest.
“I’m having to support this,” he said, “but these are quite substantial rent rises at a time when people on benefits are going to start facing serious problems as a result of the actions of the Tory-Liberal government.”
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