Housing Revenue Account Subsidy Reform
As detailed in the recommendation.
The Cabinet Member for Housing introduced the report which described the content of the Welsh Government (WG) consultation document on identifying options to end the Housing Revenue Account Subsidy (HRAS), and the implications of the various options for Flintshire.
WG had been in discussion with HM Treasury since 2010 with a view to agreeing a financial settlement that would enable the 11 stock retaining local authorities to exit from the HRAS system. In June 2013, Welsh Ministers announced that they had reached agreement with HM Treasury, the key elements of which were outlined in the report.
In order to be able to exit the system by 1 April 2015, a timetable had been established which required a response to the consultation document by 10 July. The Minister’s decision on the outcome of the consultation was expected by 31 July. Approval would then be sought for the introduction of self financing on the terms outlined by the Minister to enable officers to complete the work streams necessary for the introduction of self financing for the Council to be able to sign the voluntary agreement.
The Cabinet Member explained that options 1-3 for distribution of the borrowing cap were outlined in the report. She thanked the Leader for his work with colleagues in other authorities, and with the Welsh Local Government Association (WLGA), where a consensus had been reached to recommend option 3. Consensus was vital as all 11 Councils needed to sign the voluntary agreement for self financing to take effect from 1 April 2015. The consultation document was attached as Appendix B to the report which had also been submitted to the Housing Overview and Scrutiny Committee who were happy with option 3.
The third option was for those Councils who had submitted plans for new build to receive 50% of the amount they had planned to borrow, with the remainder being split across all 11 Councils on the basis of the SHG formulae. This would provide Flintshire with £14,326,108 for new build, and £25m for Welsh Housing Quality Standard (WHQS).
The Chief Officer, Community and Enterprise explained that in the response to the consultation document on the section ‘Any Further Comments’, the following was suggested:
“Flintshire is delighted that self financing can now be introduced in Wales and thanks the Welsh Government for leading this work. There are two further areas of strategic discussion and commitment/actions needed to safeguard business plans over the medium to long term. These are, the need for a clear understanding about the long term funding of MRA and an urgent need for a review of the Right to Buy. Councils all want to build but are concerned that the current suspension system does not provide sufficient safeguard to ensure that newly developed assets can be used in perpetuity to meet social housing need”.
The Chief Executive commented on the involvement of Flintshire County Council in the process which had been because of the authority’s robust business plan and high level of performance. He paid tribute to everybody who had been involved in the process.
That Flintshire’s response to the Housing Revenue Account Subsidy consultation document be noted and supported.
- HRAS, item 30. PDF 38 KB
- Enc. 1 for HRAS, item 30. PDF 432 KB
- Response to Consultation Document V2 8.7.14.doc, item 30. PDF 17 KB