Councils to leave HRA early as self-financing pilot gets green light

Published by Ross Macmillan for 24dash.com in Housing

Association of Retained Council Housing (ARCH) members Wandsworth and Cornwall council are preparing to leave the Housing Revenue Account (HRA) subsidy system a year early – as the first step towards self-financing pilots gets the go-ahead.

A Ten Minute Rule Bill delivered by Sarah Newton MP, proposing a Bill before Parliament to enable three authorities to become pathfinders for new self-financing arrangements, was approved yesterday (8^th December). The Council Housing (Local Financing Pathfinders) Bill is set to go before Parliament on 21^st January 2011.

ARCH has campaigned for self-financing arrangements to replace the current housing finance system and supports the pathfinder project.

If the Bill is passed, Wandsworth, which is fully stock retained, and Cornwall, which has mixed provision, along with Stockport, which has an ALMO, will be able to leave the Housing Revenue Account (HRA) subsidy system in April 2011.

Valuable lessons can be learned through pathfinders and the government working through the complex processes to move to self-financing nationally in 2012.

Delivering the Ten Minute Rule Bill, the MP for Truro and Falmouth said: "This Bill offers ministers the opportunity to work with the evangelists."

Brian Reilly, deputy director of housing at the London Borough of Wandsworth and ARCH executive board member, said: "Wandsworth council firmly believes the model of stock retention and direct management is best placed to provide accountable, excellent housing services which deliver value for money. The move to self-financing combined with increased local influence over allocations, rents and tenure provide an unprecedented opportunity for councils to shape housing services for local communities."

Mike Owen, special housing advisor at Cornwall Council, said: "The Bill has real support in Cornwall. The local MP is tabling it and at a special conference to consider self-financing tenants and the elected councillors voted to support it.  Cornwall Council believes the current redistributive system of housing subsidy is unfair and the move to a self-financed future is essential.  Through self-financing we believe we will make local decisions about the housing needs of our community.  We have a large backlog of repairs to council housing in Cornwall and the Bill, if supported, will mean it will be one year sooner for our tenants to benefit from greater investment and local control of finances.  And, through the freedoms built into this local control, it will also be one year sooner for us to start building council housing again in Cornwall."

The three pilot authorities are included on the basis of high performance, high standing in the sector and capacity to take on the work early. The proposed establishment of a pathfinder programme will provide live testing and detailed technical feedback. A report will be made widely available.

The forthcoming Decentralisation and Localism Bill and revised debt settlement plans will provide details of the new housing finance system.