Government 'Will Allow Borrowing Flexibility But Not Grant' For Fire Safety Work

Councils may be allowed increased borrowing freedoms and the power to switch funding from general funds to pay for fire safety work to high rises, but the government will not provide direct funding. This was the position revealed by Sajid Javid during a grilling by members of the CLG Committee. Mr Javid confirmed that 31 local authorities have asked for assistance paying for safety measures and that the government is in “detailed discussions” with six of those. He said the government was considering giving extra HRA borrowing flexibilities to the councils, and requests from “one or two” for a one-off transfer to be made from their general funds into their HRA, which is normally ringfenced. However, he said the government was not planning to provide grants for works. Read more on Inside Housing.

Sector Calls On Government To Delay Supported Housing Changes

Housing figures have called on the new government to put back controversial plans to change the funding of supported housing, due to the current political hiatus.  Housing association leaders and trade bodies said ministers should put a halt to proposals to cap supported housing benefit payments at the level of the Local Housing Allowance (LHA). The government had planned to introduce this controversial cap from April 2019, with local authorities to provide top-ups for costs above the LHA rates through devolved ringfenced funding. Read more on Inside Housing.

LHA Cap: £64m Funding Gap Risks Breaking Service

The Local Housing Allowance (LHA) cap for supported housing risks “breaking” sheltered housing, three specialist housing providers have warned. Anchor, Hanover and Housing & Care 21 warn the proposals could result in up to a £64m annual shortfall. The three organisations provide services for almost 100,000 residents and estimate they will face a £64m shortfall if the cap is brought in and the one-bed LHA rate is applied to all the sheltered housing they own combined. There is an estimated £58m shortfall if the two-bed rate is applied to those living in two-bedroom properties. The government has proposed to fund the extra costs of supported housing through a ringfenced top-up fund administered by councils. Read more on Inside Housing.

Housing Benefit: Supported Housing – Parliamentary Written Answer

Baroness Jones of Moulsecoomb: To ask Her Majesty’s Government whether they will ensure that ring-fenced funding for local authorities will meet the shortfall between LHA rates and the cost of provision of supported housing.

What assessment they have made of the impact of the proposed application of the cap on supported housing providers based in those parts of the country where there is a significant gap between LHA rates and the cost of provision.

Lord Henley: the new funding model will ensure that the supported housing sector will be funded at the same level it would have otherwise been in 2019/20, taking into account the effect of Government policy on social sector rents.

LHA Cap: Supported Schemes Remain On Ice

Supported housing providers are keeping development schemes on hold, despite a recent assurance from the government that current levels of funding will be maintained in the future. In September, the government announced that councils would be given control of a ringfenced fund to make up the funding shortfall caused by extending the Local Housing Allowance (LHA)-linked housing benefit cap to supported housing from April 2019. A detailed consultation was published last month. But concerns over how local authorities will administer those funds, as well as the ongoing permanence of the ring fence, mean frozen development plans remain on ice. Read more on Inside Housing.

Ministers Consider New Supported Housing Duties

The government is considering imposing new legal duties on councils to provide supported housing, in a bid to safeguard a proposed housing benefit top-up fund. Ministers are considering requiring councils to provide “certain types of housing” in response to fears that local authorities would spend the extra cash earmarked to meet higher costs of supported housing elsewhere.  Ministers are intending to cap housing benefit for supported housing tenants in line with LHA levels from 2019/20. The government plans to devolve extra funding locally to help tenants cover the more expensive rents in supported housing. Read more on Inside Housing.

‘Khan Amendment’ To Ensure Replacement Homes Are Within Borough

Labour’s candidate for Mayor of London, Sadiq Khan, has challenged ministers over their Housing Bill by tabling an amendment that would ring-fence the expected annual £865 million raised from Right-to-Buy by housing associations in London. There are almost 400,000 housing association homes in London that are at risk of being sold off and not replaced under the government’s plans. The 'Khan Amendment' would require housing associations to replace homes sold off under the Right-to-Buy scheme with a new like-for-like home in the borough, preventing the hollowing out of local areas. Read more on 24dash.

HRA Rulebook Reviewed As Councils Raid Budgets

The government is to re-write its rulebook on council housing finance after an Inside Housing investigation uncovered evidence of widespread raids on maintenance budgets. The analysis of 115 council landlords’ financials unearthed an armoury of tactics employed by authorities to shore up other cash-strapped council services with rents and welfare benefits from housing revenue accounts, which are supposed to be ring-fenced. A spokesperson for the CLG said it was ‘absolutely clear that the ring-fenced HRA is not to be used to supplement the general fund’. Ministers had ‘powers to direct a council to return money to the HRA if evidence of its abuse merits it,’ she added. In the past weeks, officials have revived a major review of the 19-year-old housing finance rulebook which defines legitimate charges on the HRA, Inside Housing understands. Read more on Inside Housing.

Exhausting Help to Buy Pot Would Create Housing Bubble

A housing market bubble could develop in Britain if the second stage of the Government’s Help to Buy scheme is as successful as the Treasury hopes, leading economists have warned.  George Osborne has ringfenced support for as much as £130bn of high loan-to-value mortgages through £12bn of guarantees by the time the programme finishes in 2016, although early data has indicated that it will be less popular than the Chancellor had banked on.  Exhausting the pot would imply about 14pc of all housing transactions making use of the scheme.  In comparison, in the first six months of the scheme, it only represented 1.2pc of all housing transactions.  Read more on the Daily Telegraph website.

Council Takes £2m from HRA

The Audit Commission has accused Medway Council of ignoring the advice of its external auditors by shifting £2 million from a ‘ring-fenced’ housing budget to its general fund. The Kent authority’s chief executive employed ‘special urgency’ powers in September to raid its housing revenue account, council papers from last month reveal. Such powers allow senior officials to make urgent decisions which are approved later by councillors. The £2 million raid makes Medway the fifth council to sanction such controversial transfers on the advice of consultancy Capita. The CLG is probing the ‘appropriateness’ of the move. In total, £37.5 million is now known to have been taken from council housing budgets during September before the legal ‘loophole’ pinpointed by Capita was sealed by the government on 1 October. Read more on Inside Housing.

Regulator Drops Ring-Fencing Plans

The social housing regulator has dropped controversial plans to make landlords ring-fence their social housing assets.  Julian Ashby, chair of the HCA, has confirmed the change of approach.  A HCA discussion paper published in April suggested ring-fencing measures to protect social assets from riskier activities. These included limits on non-social activity as a percentage of turnover and restrictions on using social housing assets as loan security.  However, following widespread concern from landlords, the regulator has now ditched the plans for all non-profit associations which have parent companies registered with the HCA. Landlords had warned the plans would restrict their ability to carry out mixed-tenure developments and community projects. Read more on Inside Housing.

Housing Benefit – Parliamentary Written Answer

Lord Greaves: To ask Her Majesty's Government whether discretionary housing payment (DHP) funds provided to local authorities are ring-fenced in total, and within each category of DHP; and whether local authorities can top up from their general funds the amount provided for DHP.
Lord Freud: Local authorities receive a single allocation towards discretionary housing payments and can increase this from their own funds, up to two and a half times the government contribution. The overall allocation local authorities receive is ring fenced. Local authorities have flexibility within the overall fund to deal with local circumstances arising from the housing reforms.