I propose to take Questions Nos. 376 and 377 together.
Local authorities set and collect rents on their dwellings in accordance with section 58 of the Housing Act 1966. The making or amending of such rent schemes is generally a matter for local authorities within broad principles set out by my Department, including that rent levels should be based on income and reflect tenants’ ability to pay.
Local discretion and flexibility are inherent in the devolved administration of rent schemes and different approaches are taken to rent setting across local authorities. Decisions regarding the sources of income included and disregarded for rent assessment purposes, including disability allowance, are a matter for individual local authorities. There is no requirement for standardised treatment of such allowances.
That said, local authority differential rent schemes are income-based. Those who earn more pay more. Accordingly, an increase in income, including an increase in an assessable allowance, may result in increased rent. However, differential rent schemes are also progressive meaning only a proportion of increased income can be charged in rent.
While all tenants, whether HAP or local authority tenants, pay a differential rent on the same basis, rents charged must reflect a tenant's ability to pay. Accordingly, local authority rent schemes generally make allowances for specific hardship cases. In such cases, they may accept lesser amounts for a specified period if they consider the amount of rent due would cause undue hardship for the tenant.
