TENANTS who live in public sector housing have been warned that an increase in their rent marks the beginning of a change in housing policy for the Island.

Last week it was announced that public sector tenants would have their rent put up by 10 per cent from April next year.

The Department of Social Care said the rent increase was "essential" in addressing the rising cost of public sector housing to the taxpayer – which currently stands at £7m.

There are just under 6,000 public sector properties in the Isle of Man and 17 per cent of the population reside in them.

The average rent rise works out at less than £7 per week for those living in a three bedroom property. For people in sheltered accommodation the rent increase works out at £2.40 per week. Those people on income-related benefits will be largely unaffected. 

Social Care Minister Chris Robertshaw MHK said the department had some "quite significant issues to address" in terms of public sector housing and said it was a "very important issue that had to be focussed on in great detail".

Of the rent increase Mr Robertshaw said it would "send out a signal to everybody that it marks the beginning of a change towards a new housing policy".

Speaking about the impact the rent increase would have on tenants Mr Robertshaw said: "We are very sensitive indeed to the most vulnerable and I think it's important to point out that as the 10 per cent increase goes up then so does income support for those most exposed. It is far from a heartless thing."

The Minister praised the work of the previous government administration for investing in the public housing stock but said fundamental weaknesses had resulted following investment.

He explained: "Looking back to the previous administration the government was proud of the work it did in replacing existing public housing and very very significant investment went in.

"However with it came two fundamental weaknesses. The first is that for all the excellent work that was done, and the quality housing and improvement that occurred, it didn't actually significantly increase the stock available.

"During this period of improvement and replacement the level of people on waiting lists went up significantly. As this process of replacement went on, in financial terms, it became more and more unsustainable.

"The department now finds itself in a position where we have a significant waiting list and a growing deficiency of around £7m and it is growing at £1m per year.

"If you cast forward say five years we are talking about £12-£13m. You set that against the backdrop of incredible pressure that our government has in budgetary terms and we really haven’t got a sustainable position. That's the issue for us."

The Department of Social Care is currently working on a new housing policy which it will publish in the New Year. The document will go out to consultation so that members of the public can offer up their opinions and views.

Chris Corlett, the chief executive of the Department of Social Care, said: "We've been looking at the housing needs for the future of the Island.

"The demography of the Island is changing remarkably and the population is changing rapidly. In 20 years the number of people who are 65 and over will have increased by half. The sort of housing stock we're going to need in the future is not the sort of housing stock we need today.

"There's a whole host of factors we need to look at to project our housing needs - and we have to look at the cost of that to the taxpayer. The existing finances are not sustainable"

Mr Robertshaw added: "We are between a rock and a hard place at the moment we do need to engage the community in trying to decide where we are going to go forward with the options that the policy presents to us. That debate in some respects is going to be difficult. It will force us to face up to issues that I have outlined.

"One of the aims of the new Council of Ministers is on the one hand to deal with a very difficult economic environment but also to tackle fairness and protect the vulnerable. It's being able to marry those issues together that is going to decide if we will be successful or not."

Addressing things which could crop up on the new housing policy Mr Robertshaw said he did not agree with a 'right to buy' scheme where some public sector tenants would have the ability to buy their home.

He said: "Instinctively my answer to that would be no. I'm not a big fan of right to buy. The reason being is that it doesn't increase the available stock. What we've got to do is move towards the right level of provision in each area."

This is a sentiment echoed by Mr Corlett who said the scheme in the UK hadn't been entirely successful. He explained: "The experience in the UK was that people purchased the best accommodation so the best public sector stock was cherry-picked at a subsided price, at a cost to the tax payer.

"Those assets ceased to be available for affordable housing so local authorities and housing associations were left with the worst accommodation with the highest maintenance costs and highest reconstruction costs."

Mr Robertshaw concluded: "See this 10 per cent as nothing more than a signal. It's not an end game - it doesn't get us anywhere close to sustainability - but it sends a signal out which should be read as determination. 

"We are not pretending at this stage to have resolved everything. We are simply signalling the fact that we are on to it. We've got some big issues and challenges ahead and they start into the New Year."

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Also see: Public sector tenants face rent rise of 10 per cent