Plans to make ‘higher earning’ families pay more for their council homes could lead to more rent arrears, more evictions and families doing without basic living essentials, Nottingham City Council has warned.

The Government proposals Pay to Stay: Fairer Rent in Social Housing could mean that households with an annual income of more than £30,000 would have to pay rents close to market level for council or housing association homes.

The City Council, which owns 27,000 council houses managed by Nottingham City Homes, said the average earnings of a full-time employee in Nottingham was just over £22,000 a year, meaning a household with one full-time and one part-time employee would be classed as ‘high income’.

“We don’t believe couples with a joint income of £30,000 can be classed as high wage earners,” said Councillor Jane Urquhart, Nottingham City Council’s Portfolio holder for Planning and Housing. “When this scheme was first proposed three years ago it was geared towards households with an income of £60,000 plus.

“In Nottingham, as in many other areas of the country, a £30,000 income could still mean a family, depending on their other circumstances, was eligible for Housing Benefit to cover their council house or social housing rent. To be charging a family a higher rent that then pushes them into a situation where they need to claim Housing Benefit eliminates any value-for-money case put forward by the Government and is a recipe for muddle and confusion.

“We are in little doubt that this policy will further worsen the position of working households living in social housing. It is a trigger for rent arrears, evictions and choices between basic living neccessities. It may well force working families to leave social housing, causing high turnover and undermining the social mix of people living in council and housing association homes.”

The proposals would also hit councils already struggling to balance their budgets, Councillor Urquhart said.

“As well as having to pick up the costs of administering the scheme, councils could face extra demands from tenants who are moved on to higher rents and who would therefore expect more for their payments. As this extra rental income would be paid to the Government and not to local authorities, this is something councils would find extremely difficult to afford.”

The City Council, in its response to the Government’s proposals, has recommended that the policy be scrapped or completely rethought. If it is to be implemented, then the Council says it is vital that local authorities or regions set their own thresholds for higher rents and that they retain the additional rent for investment in housing locally.