Wolverhampton City Council has approved a plan to spend £2.5 million to outsource the licensing of private rented homes, citing difficulties in managing the service in-house.

During a cabinet meeting on Wednesday, councillors were informed that the local authority lacked the necessary staff and technology to handle the scale of licensing required. A report presented to the committee outlined the “challenges” the council faces, particularly in terms of staffing and IT infrastructure. The report suggested that outsourcing the service would result in cost savings and improved compliance with regulations.

Councillor Steve Evans, who oversees housing for the city, acknowledged that the council could not manage the thousands of inspections needed. “We have a significant number of private landlords in Wolverhampton, and it is crucial for the safety of renters that these landlords are fit and proper,” he said.

The approved proposal will see a private contractor awarded a five-year contract worth £500,000 per year. The scheme will be funded through the fees collected from landlords, which will be returned to the council.

In addition to collecting fees, the contractor will be responsible for handling applications, conducting inspections, and ensuring compliance, according to the report.

The decision comes as Wolverhampton looks to ensure better regulation of its private rented sector, which has grown substantially in recent years.