Monday, 21 July 2008

Negative Subsidy

Darlington is hardly one of the wealthier towns in the country, yet each year the Government takes a proportion of our Council's income from Council house rents and redistributes it elsewhere in the country. Sometimes, and this year is a case in point, central Government just keeps a chunk of that money.

Now, compared to some local authorities, who pay millions of pounds a year to the Government from their Council house income, Darlington pays relatively little: this year it's projected to be £568,000. That's 3.9% of our total rental income of £14,730,00, or just over £90 per household.

This is called "negative subsidy" and Darlington has always been in this situation. The amount we pay is set by the Communities and Local Government Department and we have no control over this.

Darlington is the only authority in the Tees Valley to be in negative subsidy: Stockton, Middlesbrough, Redcar and Hartlepool are all beneficiaries of this scheme.

A couple of years ago, Darlington, which is a good local authority landlord providing a four-star housing service, was one of six authorities from around the country chosen to take part in a pilot scheme to look at coming out of the subsidy system, and become self-financing. Now it seems that Government has accepted that the subsidy system is not ideal and a major review is taking place. In the meantime, the pilot scheme has been put on hold.

Council house tenants, by and large, are one group who need every penny they can get. Yet in Darlington each Council household is effectively being taxed over £90 a year. I wonder what the residents of Rise Carr and North Riverside in my ward would think about that!


Maureen Rigg said...

I don't know who gave you duff info on Stockton's negative subsidy situation, Mike, but we'd love it if we only paid over what Darlington pay!

Mike Barker said...

The "duff info" came from the Parliamentary Under-Secretary, Department for Communities and Local Government, the MP for Hartlepool, in response to a question from Lembit Opik , Liberal Democrat MP.
Here is a link to the question and answer, as reported by They Work for You. Stockton is not listed as one of the authorities in negative subsidy for 2008-09: