The Relationship Between Cities' Housing Rents and Block Grant

There has been much discussion centred on the decline of the specific housing grants in England, Scotland and Wales, and the implications for rent levels set by local housing authorities. In this paper it is argued that rent incentives provided by the Block Grant have been largely ignored. Data is derived, showing that for some major city housing authorities every extra pound raised in rent income results in more than a pound of extra Block Grant. For some authorities the grant leverage is less, whilst for others it is non-existent. Incentives to raise rents are greatest for city authorities with low rent policies. By such means central government can continue to force rents upwards without taking direct control over rents.