Issue - meetings

This report presents a suggested response to consultation on Government proposals to dismantle the current Housing Revenue Account (HRA) subsidy system and introduce a system of self financing from April 2011, and  considers the opportunities available to ensure the continued delivery of affordable housing within the City.

RESOLVED: (i)         That the proposed response to the consultation paper, as set out in Annex A to the report, be approved.

                        (ii)        That the additional comments set out in paragraph 33 opf the report, in relation to making a case for York to acquire only that level of debt which is reasonable given the prudent operation of the Housing Revenue Account in the City, be approved.

REASON:      To respond appropriately to the consultation and to ensure that the Council is able to continue to deliver an effective, value for money, housing service.

Members considered a report which presented a draft response to consultation on Government proposals to dismantle the Housing Revenue Account (HRA) subsidy system and introduce a system of self financing from April 2011.

The changes proposed, if implemented, would have a significant impact on the Council’s HRA business plan and stock retention strategy.  Key proposals included:

• A notional re-allocation of £25.1bn of debt between 177 authorities, with an option to use a discount rate to allow new build to take place
• Further guidance to give greater clarity on the HRA ring fence
• An end to the pooling of all capital receipts as part of the self financing settlement, with 75% of HR receipts to be used for affordable housing / regeneration projects.

A draft response to the specific consultation questions was set out in Annex 1 to the report.  This indicated that the Council would favour self-financing, subject to further clarification on key areas - including the circumstances under which the proposed settlement could be re-opened and technical issues regarding depreciation - before proceeding further.  Members were invited to approve the response and to consider making a number of additional comments, as set out in paragraph 33 of the report, in response to a recent announcement by the Housing Minister inviting the views of ‘councils and other experts’ on the proposed new system.

RESOLVED: (i)         That the proposed response to the consultation paper, as set out in Annex 1 to the report, be approved.¹

                        (ii)        That the additional comments set out in paragraph 33 of the report, in relation to making a case for York to acquire only that level of debt which is reasonable given the prudent operation of the Housing Revenue Account in the City, be approved. ¹

REASON:      To respond appropriately to the consultation and to ensure that the Council is able to continue to deliver an effective, value for money, housing service.