Agenda item

Housing Revenue Account Subsidy (HRAS) system


That the Flintshire response to the HRAS Consultation document be noted and supported. 



The Chief Officer (Community and Enterprise) introduced a report to provide the Committee with the content of the Welsh Government (WG) consultation document identifying ways to end the Housing Revenue Account Subsidy (HRAS) system by voluntary agreement. 


            The Chief Officer detailed the background to the report and the key elements of the agreement were reported in paragraph 2.02.  UK Government had agreed that exit from the system could take place from 1 April 2015 but this would require a voluntary agreement, secured and managed by Welsh Government and all 11 Councils must agree and sign the agreement.  The WG consultation document identified a rationale, and proposal for, distribution of settlement buy out figures and three options for distribution of the borrowing cap.  She provided full details of the figures for distribution of the Settlement Value with option one being the preferred option and also detailed the options for distributing the Borrowing Cap; consensus had been reached that option 3 was preferred. 


            Councillor George Hardcastle asked if the information provided could result in more than 100 new Council houses being built.  The Chief Officer (Community and Enterprise) said that if the third option was approved, Flintshire County Council would receive £14.3m for new build which would allow the generation of 150 houses based on each costing an estimated £0.100m to build. 


            The Chief Officer (Community and Enterprise) drew Members’ attention to the response to the consultation document on page 41 and highlighted question 7 in particular which identified that a clear understanding about the long term funding of Major Repairs Allowance (MRA) was required along with an urgent need for a review of the Right to Buy scheme. 


            Councillor Rosetta Dolphin raised concern about the request from Wrexham County Borough Council for £118m borrowing for the Welsh Housing Quality Standard and whether Flintshire County Council would be liable for any part of the monies in the event of a merger between the two Councils.  She also expressed her disappointment that the allocation to Flintshire County Council for new build would drop to £14m if option three was approved.  The Chief Officer (Community and Enterprise) said that if the authorities did join together any borrowing would also be “joined”.  She added that if efficiencies in the HRA could be maximised, then the number of new build Council housing could increase from the 100 already identified.  WG had made clear that it was important that the new build allocation was used which could mean that there could be the opportunity for those Councils that had plans and programmes in place to receive additional funding if the remaining authorities did not use their allocation, and agreed for others to utilise it. 


            Councillor Jim Falshaw asked how the WHQS standard could be maintained if the MRA was not guaranteed for future years.  The Chief Officer (Community and Enterprise) said that investment was in place up to 2020 to meet the WHQS and to maintain the standards after that date; the plan had identified surpluses after 2020 which could also be utilised, but lack of certainty about MRA was a key risk area.   


            Councillor Gareth Roberts said that it was important to reach agreement with the other ten authorities and echoed the concerns of Councillor Dolphin about the figure from Wrexham County Borough Council of £118m for WHQS.  Councillor George Hardcastle welcomed the proposals for 100 new build Council houses in six years, but he felt that the number should be higher.  The Chief Officer (Community and Enterprise) explained that the borrowing cap allocation for new build only totalled £112m for the whole of Wales and it was therefore important to have a prudent use of capital and an increased programme of efficiencies in the HRA. 


In response to a question from Councillor Hardcastle about whether pre-fabricated dwellings had been considered, the Chief Officer (Community and Enterprise) said that a range of options had been explored in consideration of the next agenda item.  She added that it was important to identify whether such options were appropriate for Flintshire County Council and said that non-standard build was not always cheaper.  She confirmed that the provision of bungalows would be included in any future proposals.  It was possible to apply to WG to suspend the Right to Buy scheme for five years on new builds with a further five year extension possible but further measures were needed to ensure any new Council properties were protected as public assets.   




That the Flintshire response to the HRAS Consultation document be noted and supported. 


Supporting documents: