Housing ministry moves to triple rent for civil servants

DN Bunge Hinga 2603 dw

Civil servants who have been paying as low as Sh30,000 monthly in rent for three-bedroomed houses located in prime locations will dig deeper into their pockets if the Treasury approves proposals to triple the amount.

Housing Principal Secretary Charles Hinga told Parliament that he has written to the Treasury seeking approval to review the rent for the 56,892 civil servants houses that has remained unchanged for the past 23 years.

The review will also see rent payable for low cadre civil servants increased upwards from the current Sh1,000 per month.

“Rent for civil servants averages Sh2,200 but there are those who pay as low as Sh1,000 a month for a single room in Mbotela Estate on Jogoo Road to the super scale public servants who pay as high as Sh30,000 per month for a three bedroomed along State House,” Mr Hinga said.

“Super scale public servants living in upmarket areas like State House should pay between Sh90,000 to Sh100,000 per month,” he said when he appeared before the Public Accounts Committee (PAC) to respond to audit queries for the Housing department for the year 2021/22.

“There is a need for the increment of rent. I have written to the National Treasury to allow us to relook at rental costs. We have not increased rent since the last review that was done in 2001,” Mr Hinga said.

Mr Hinga told the committee chaired by nominated MP John Mbadi that the ministry had not maximised collection of rent from the 56,892 units with an expected monthly rental income of Sh127,048,750.

Auditor-General Nancy Gathungu had raised the red flag over the department’s failure to collect a potential annual rent of Sh1.524 billion assuming full occupancy of the 56,892 houses.

Ms Gathungu said the government houses rent for the financial year 2021/22 amounted to Sh1.018 billion, leading to under collection of Sh506.59 million.

The audit revealed the department expected to receive Sh138.23 million in rent income for housing county government staff in the 47 counties

Ms Gathungu said the total uncollected rent over the last two years amounted to Sh1.16 billion while the uncollected amounts for the financial year 2019/20 and earlier years have not been quantified.

Mr Hinga said government houses are categorised as institutional, police and pool units owing to several factors, including some that are in a poor state of repair.

He said the houses are further categorised into low, medium and high grades.

“It is true that the department recorded a shortfall of Sh506,585,000 against an expected total of Sh1,524,585,000 in rent from 56,892 houses during the year under review,” Mr Hinga said.

“The shortfall arose after Sh16.99 million was deducted from the tenants by various Ministries, Departments and Agencies (MDAs) but was not remitted to the State Department.”

Mr Hinga said the demand letters were addressed to particular MDAs, including Interior and Tourism that account for the bulk of the non-remitted collections.

The PS asked Parliament to intervene and cause a special audit on all MDAs that have collected rent and failed to remit the same, arguing it is illegal for entities to spend money not appropriated in the budget.

“It is irregular for any MDA to spend money outside its budget. There are rent deductions by employees that should be remitted to the State Department for Housing.”

A total of Sh35.65 million, he said, was not collected from 1,714 houses dedicated to various institutions while Sh42.47 million was not collected from 1,501 houses that were irregularly alienated and were, thus, not attracting rent.

Mr Hinga said various houses were not occupied due to disrepair.

“These houses could not be refurbished within the financial year due to cash flow constraints. As such, rent was not received from such houses across the country,” he said.

The PS said there were times when the houses were not occupied immediately due to security challenges, for example, once an officer exits.

“To scale up rent collection, we have instituted several measures which have resulted in a steady increase in overall annual collection over the last four years,” Mr Hinga said.

“We are currently rolling out an Enterprise Resource Planning (ERP) system for revenue reconciliation and rent collection for both at estate, civil servants housing scheme and slum upgrading programme.”

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