Pay to Stay will be challenging for councils to implement, LGA warns

The Local Government Association (LGA) has cautioned that the government’s new Pay to Stay policy will be near impossible to implement on time, due to the administrative complexities involved.

The new policy is scheduled to come into effect on April 2017 and will require local authorities to invest million in new IT systems and staff.

The new rules will mean more than 70,000 social housing tenants will be faced with annual increases of around £1,000, with councils expected to write to tenants to inform of the changes and approve each individual tenant bill by January.

Nick Forbes, LGA senior vice chair, said: “Pay to Stay sounds straightforward but it is a policy with initially unseen complexities, and which could generate large numbers of costly legal appeals and challenges from tenants.

“The government has committed that councils will be able to keep reasonable administrative costs. In many local areas, these costs will outweigh the additional rent collected leaving little or no extra income for the Treasury to keep, and leave the councils out of pocket.

We urge new government ministers to take this opportunity to allow councils to decide whether or not they will introduce Pay to Stay for their tenants and to keep the additional rent to invest in new and existing homes, as will be the case for housing association tenants.

"At the very least, it should delay implementation to allow for approaches to be tested and piloted, and to provide councils with the support to implement the policy with minimum disruption."