HOUSING bosses have been told they can make crucial changes to avoid a massive financial black hole.

Bolton at Home was on course to lose £70 million after the government controversially changed rent rules, meaning some of its 970 staff could have been laid off and repairs at some of its 17,865 homes could have been scrapped.

But a regulator has now waived the rule in Bolton at Home's case, ending those fears.

"It is a tremendous relief for us and will ensure financial stability over the coming years," said chief executive Jon Lord.

Historically, social housing tenants in Bolton have paid lower rents than those in other parts of the north west, so the government has allowed Bolton landlords to increase rents by an extra £104 a year to "catch up".

But in a bid to keep housing benefits low, Westminster is banning this exemption from April, so the maximum annual rent increase for social housing tenants will be 2.2 per cent.

Bolton at Home had factored in the extra cash when working out its budget for the next 25 years, and the restriction would have left it with a £70 million shortfall.

However, the Homes and Communities Agency (HCA), which regulates social landlords, has now exempted Bolton at Home from that rule after acknowledging the change would have "significant implications" for the organisation.

It means that, from April, rent will go up for some of its tenants at a higher rate.

The turmoil, says Bolton at Home, has been played out behind the scenes and tenants always expected the high rent increase after the organisation's customer committee voted in favour of them before the government cap was announced.

Cllr Ann Cunliffe, who is on the customer committee, said: "Social housing providers are facing huge challenges to their financial health, not least by the growing impact of welfare reform.

"So, we're comforted that BAH has taken steps to claw back what would have been an unexpected and significant shortfall in its income to remain a strong and viable organisation for all of its customers."

Cllr Cunliffe added: "Obviously, rent increases are not ideal for tenants, however they have been among the lowest rents in the region and Bolton at Home's governance supports the waiver and believes rent levels are being carefully managed.

"It's in the best interests of everyone for Bolton at Home to avoid what otherwise would be enormous damage to its ability to improve and repair homes, maintain and regenerate neighbourhoods and support people and communities."

Mr Lord added: "This is an issue that has been very worrying for us.

"Had the new rule applied to us, we would have survived it as an organisation, but it would have been drastic in its effect."

In its report, the HCA praised Bolton at Home for improving its finances, but expressed concern about how future developments could have a negative impact on them.

The report says: "We are satisfied that its financial plans are consistent with and support its financial strategy.

"Bolton at Home has an adequately funded business plan, sufficient security in place, and is forecast to meet its financial covenants under a range of scenarios.

"However, as is common with large scale voluntary transfer providers in their early years, Bolton at Home's financial profile is weak."

BAH spends a quarter of its cash on housing repairs — 1,500 properties are currently in need of repair or rebuild — and the report warns there could be problems if costs increase.

It also warns of the possible impact of welfare reforms and pension costs.

Mr Lord said: "Our financial plan is very reserved and we have factored in all the possible concerns as part of our financial stress tests.

"We are confident that, whatever comes our way, we have the ability to weather it."