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Portsmouth has £2m a year more to spend on housing following HRA reform

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Portsmouth has £2m a year more to spend on housing following HRA reform

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Published by 24publishing for 24dash.com in Housing and also in Local Government

Portsmouth has £2m a year more to spend on housing following HRA reform Portsmouth has £2m a year more to spend on housing following HRA reform

A council has announced it has £2 million a year more to spend on housing following the scrapping of the Housing Revenue Account (HRA).

The new system will see Portsmouth City Council inherit a share of the national housing debt totalling £88m, rather than continue to pay a “substantial amount” of tenants’ rent back to government.

The changes, which will start on 1 April 2012, mean the council will have approximately £2 million more to spend on services for tenants every year.

The changes have been welcomed by Portsmouth council residents and leaseholders, some of whom have campaigned in favour of the changes for many years.

The move to self financing will allow the council to prepare a 30-year business plan based on the rental income it receives from its stock.

Councillor Steven Wylie, the city’s Cabinet Member for Housing, said: "This is brilliant news for council residents and means we'll have more money to invest back in to our service, and ultimately, people's homes. It gives us much more freedom over our own budget which is good news.

"However, it still means that Portsmouth tenants are paying government debts which our residents and service are not responsible for, which is not ideal. However, the new system is still a massive improvement."

The rent increase has also been set for the next year at 4% - below inflation and less than the Government’s recommended increase of 8% for social landlords.  

Cllr Wylie said: “Many of the residents I spoke to were in favour of the 4% rise, and to me, this was the fairest way of setting the rent. We worked very closely with residents on this budget and conducted a consultation, which helped inform my decision. 

“We’ve kept the rents lower than recommended by government as I don’t want our tenants to be priced out of their homes. We have increased some of our other charges as many residents told us they felt this is fair. Our other charges are still well below market value."

Other councils have decided to settle for lower rent increases, such as Ipswich, Reading and Newcastle.

Meanwhile, Birmingham City Council – the largest stock holding local authority in the UK – plans to freeze council rents until 2013.

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