A TENANTS’ group has criticised Swindon Council’s move to set up an emergency back-up fund for those hardest hit by the bedroom tax using cash normally reserved for homes.

Housing Minister Mark Prisk MP has given his initial support to allow the council to use £420,000 of its housing revenue account (HRA) – the money the council receives in rent from council tenants – to help those tenants who are struggling financially due to the Government-imposed cuts to housing benefit.

In 2013/14, claimants of working age deemed to have one spare bedroom, according to a set of rules, will lose 14 per cent of their housing benefit (on average £12 a week) and those with two or more spare bedrooms will lose 25 per cent (on average £21.81 a week). This affects 1,180 council tenants in Swindon.

Councils can only spend their rental income on housing, but Coun Russell Holland, the former cabinet member for One Swindon, Localities and housing, has been negotiating with the Government since October to obtain special permission to use less than one per cent of the HRA money to create this fund.

However, Martin Wicks, the secretary of the Swindon Tenants Campaign Group, said: “Swindon Council’s decision to use money from their housing revenue account to pay for the cut in housing benefit of working age tenants is a dangerous precedent. This back-up fund may be small at £420,000, but it is money that should be spent on tenants’ homes.

“Swindon Council's housing revenue account is supposed to be ring-fenced, that is it should only be used for housing, in particular the upkeep and improvement of our homes. Having once breached this ring-fence what is to stop them doing it again if rent arrears rise?

“Nobody should imagine that this decision is the result of sympathy for the tenants affected by the bedroom tax. It is simply a means of trying to keep down the level of arrears that the council is expecting to rise as a result of the benefit cuts.”

But Coun Holland said: “There’s no breach of the ring-fencing principle because this operates within the law as it stands.

“Martin Wicks himself asked the council not to evict any tenants who get into arrears. If you don’t collect the arrears from one person then why not collect the arrears from others? The grant system is better than a selective arrears policy.

“The idea you are asking one tenants to pay for another is just wrong.

“Many tenants are on housing benefit anyway which is paid for by taxpayers and those tenants who aren’t on housing benefit already have the advantage of significantly cheaper-than-average rents.”

The council will write to tenants in the coming weeks to explain how the fund will work and who will be eligible.