Quote:
Originally Posted by Chris
Prior to the 1980s it was not uncommon for councils to collect less in rent than it cost to maintain their housing stock. The maintenance costs were therefore subsidised by rate payments. There is an argument that this is fair enough, if well-off homeowners are subsidising the rent of those who need social housing because, for whatever reason, they can't afford to rent or buy commercially. However, when renting a council house was de rigeur for an entire swathe of the British working class population, thanks to the large number of council houses that existed, the existence of artificially low rents basically amounted to the large-scale subsidy of council tenants by private homeowners, regardless of whether there was a social need for it (often, there wasn't). Local councils were, in effect, involving themselves in the business of wealth redistribution rather than simply providing socially necessary local services.
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I think that one of the original aims of Council houses was to provide affordable housing to the poor.
The day that Rent Rebates (Now called Housing Benefit) was introduced, I believe that all subsidies for council houses should have been stopped. My reason being that local taxation subsidised council house rents and income tax (at the time*) funded the Rent Rebate scheme. Why should taxpers pay twice? Why should those on a decent income get a subsidy? Those on a low income no longer needed a subsidised rent when Rent Rebates came into existence as the higher rents were taken into account when calculating assistance for a Rent Rebate.
* The Thatcher Government changed the Housing Benefit subsidy rules; effectively meaning that council tenants who paid their own rent covered the cost of much of the Housing Benefit paid towards the rent accounts of poorer tenants by way of increasing levels of rent to compensate the Housing Revenue Account for the loss of rental income from tenants deemed too poor to pay some or all of their rent.
This is one if the main reasons why council house rents rose so much to, in my opinion, a fairer and more appropriate level in the 1980's onwards.