Council faces big cuts to its social housing budget

Wigan Town Hall
Wigan Town Hall

Wigan Council will have to slash the amount of money spent on social housing in order to balance the books, a new report suggests.

Analysis prepared for the borough’s ruling cabinet shows the capital programme including long-term improvements and upgrades to tenants’ homes will be reduced by almost £5m over the next three years.

The budget for developing new housing schemes in the borough will also face trimming, raising question marks over high-profile projects such as the regeneration of neglect-blighted Sandalwood in Beech Hill.

Tenants will face a significant rent hike in 2020-21, although there will continue to be reductions in the amount they have to fork out until then. But the town hall says it will be able to maintain spending on repairs.

The cutbacks are necessary due to long-term financial pressures further down the line, with the council already having to work to prevent the whole budget becoming unsustainable.

However, the town hall today took an optimistic view of the document, saying it was working hard to mitigate problems for tenants and its coffers.

Marie Bintley, authority assistant director for housing and regeneration, said: “This medium-term financial plan sets out Wigan Council’s commitment to invest in our housing stock and provide new homes to match demand in the borough.

“The £14m new build programme has increased and will see high-quality and innovative homes built which will help our residents lead happier and longer lives. These will be affordable homes and will include a range of house types.

“The capital programme also includes the £2.4m funding commitment to install sprinklers in all our high rise blocks which will enhance safety.

“Our tenants will be able to enjoy another year of rent reduction and should also be reassured that the previous commitment to responsive and programmed repairs is maintained.”

The report, which the cabinet will be asked to approve this week, says tenants are already assured of a one per cent rent reduction in both 2018-19 and 2019-20 after these were approved by councillors last month.

However, the Government has said that after 2020 rent increases can be applied for five years, with Wigan expecting to put a 3.5 per cent rise on the amounts demanded from occupiers in the first financial year after that.

Provision has also been set aside for bad debts, which the town hall has been warned are currently unpredictable.

The local authority says rent collection has generally held up well despite a slew of welfare reforms’ putting pressure on low-income households, but does stress that changes to come mean this cannot be guaranteed. It is on investment in the borough’s stock, though, that the greatest effects will be seen.