Pay to Stay - A bureaucratic nightmare?

Article

06 September, 2016

Since the idea of pay to stay was introduced by the Housing and Planning Act 2016 there has discussion as to how it would work. With the The Department for Communities and Local Government (DCLG) stating that Housing Authorities have no right to HMRC data there seems to be a problem of making pay to stay work in practice.

Most local authorities and housing associations don't hold income information for their tenants and therefore to means test each tenant would become a laborious and expensive task and to means test in this manner would require asking tenants for their personal information and comes down to trusting tenants not to be dishonest and deciding how far to go to prove that tenants are being truthful.

Southwark Council has asked the Government to use its own tax office for this information, As Cllr Stephanie Cryan, cabinet member for housing, said: "I have written to the Housing Minister to state that this policy is an intrusion on people's privacy and a bureaucratic nightmare for councils"

"In many cases, it would be almost impossible to prove people's income and we feel the Government already has an organised body set up for this very purpose and it should follow its own guidance when it comes to burdening authorities with the extra workload. HMRC already collects this data and should be responsible for supplying the information"

With other housing authorities facing a similar situation to implement pay to stay, it may only be a matter of time before other councils follow in Southwark's footsteps trying to force the government to review its procedures.

Forbes Comment

The original DCLG consultation on mandatory pay to stay included a question on administration and responses (including ours) highlighted the lack of powers of compulsion to obtain information and the infrastructure to apply the information to a pay to stay formula especially for households with fluctuating incomes. A common theme was the suggestion that existing resources such as Housing Benefit or tax systems could be used with appropriate information sharing rules in place. The legislation does allow for information from HMRC to be made available to housing authorities and private RPs but does not make that compulsory. This is just one of the aspects of Pay to Stay that has proved highly problematic for RPs and whether it will produce the increase in right to buy and right to acquire applications that many expected or other consequences remains to be seen along with the terms of the rent regulations that the Act requires.

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