Cambridge City Council overcharges tenants for 3 years
The authority said the error came to light after a review
Last updated 25th Jan 2024
Cambridge City Council has admitted that it overcharged some tenants rent for three years.
The authority said the error came to light after a review found the way affordable rents had been calculated in the past was not correct.
The city council said it has written to the people impacted and will be paying the tenants back what they had overpaid.
The issue was highlighted at a housing scrutiny committee meeting this week (January 23).
People living in affordable rented homes pay below what the market rent for the property would be.
A report presented to the committee said a review had found historical errors that led to some people paying more than they should have done in affordable rent.
The report said: “As part of our review processes, legal advice sought has identified that the authority has historically misinterpreted government guidelines and rent legislation in two areas.
“The first error relates to how affordable rent reviews were carried out up to April 2019 and not correctly applying a one-per cent reduction for four years between 2016 and 2019.
“This meant that the way affordable rents were calculated was not correct and affected tenants have been overcharged.
“To remedy this, a correct (lower) current rent will need to be calculated for affected tenants.
“There will also be a need to reimburse tenants for any sums over-paid, taking into account the amount that may have been met by the Department for Work and Pensions in the form of housing related benefits.
“The second area is still being explored currently and relates to how rents and some service charges have been calculated and displayed on rent accounts.
“These errors have been proactively reported to the Regulator for Social Housing, as is expected of the authority in such circumstances and the authority will continue to work with the regulator to correct the issues.”
Councillor Richard Robertson (Labour) asked officers whether any other councils had made the same mistake.
Officers said the error also impacted South Cambridgeshire District Council due to the authorities having a shared policy, but said they were not aware of any other councils making the same mistake.
Cllr Robertson said he was sorry to hear the mistake had happened, but said errors can occur.
Councillor Katie Porrer (Liberal Democrat) said the rent issue was “concerning”, but said it was good the issue had been highlighted.
She asked for the executive councillor and officers to ensure the repayments “happen swiftly”.
Officers said letters have been sent to the tenants impacted to let them know what had happened and what their new correct rent payments will be from April 2024.
They said the repayments will be organised after that.
The meeting also agreed rent increases for council tenants in the city from April.
Social rents for council homes are due to be increased by 7.7 per cent, which will be an average increase of £8.69 per week.
Affordable rents are also due to increase by 7.7 per cent, an average increase of £13.05 per week.
Garage and parking space charges are also due to be increased by 7.7 per cent in line with the other increases.
A report presented to the meeting said the housing budget faced “significant financial challenges” due to “significant investment” being needed for the council homes to improve energy efficiency over the coming years.