Midlothian Labour response about HRA

Wednesday February 6th 2019

Midlothian Council Fairfield House

Midlothian Labour writes

SNP Councillors and MSPs have proposed using money from Midlothian Council’s Housing Revenue Account (HRA) to fund the £7.5million gap the Council faces in this year’s budget.

Labour believes this suggestion is ill-informed, morally wrong and breaches the rules governing how the HRA account can be used by Councils.

The HRA is an account into which all Council tenants rents are paid. This is the only source of income for this account. No Council tax moneys are paid into it.

Midlothian Council house tenants were consulted and asked to agree to substantial increases in their rents over several years in order to build a fund to be used to build new Council housing for the almost 5000 families on the housing waiting list.

Because of this selfless commitment from Council tenants Midlothian Council has been able to build 1100 new homes so far and plan to build another 1000. The £35 million currently in the HRA is a fraction of the £150 million the Council needs to build these homes.

These plans have been agreed unanimously by Councillors, including Councillor Cassidy and agreed with and supported by the Scottish Government.

By using the HRA as the SNP have proposed would mean abandoning the house building programme. This would leave the 943 homeless people waiting longer to gain a permanent tenancy. It would mean the 4781 people on the waiting list will go without an affordable home. It would mean existing residents properties would not be maintained to the high standards which they are paying for through rent.

The budget gap the Council is facing is as a direct result of the Scottish Government failing to provide adequate funding to local government.

If it is the view of the SNP that Midlothian residents should fund this gap, then the burden should not fall solely on those hard working, generally lower paid families, who happen to live in council housing, but should be shared by all residents across Midlothian.

To put this into context, if the gap was closed by increasing council tax, then a rise of over 23% would be required.

We are disappointed that the SNP have deliberately chosen to offer false hope of a pain free solution when both the Labour Group and Council Officers have repeatedly pointed out on that it would be neither appropriate nor legal to use the HRA in this manner.

During the election campaign in 2017, Labour committed to building 1000 new Council houses by the end of this Council. The people of Midlothian endorsed this pledge by returning Labour as the largest party to the Council. We remain committed to delivering this pledge.

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