Grant Shapps: The rules governing the use by local authorities of housing receipts are to remain substantially unchanged after the introduction of self-financing in April 2012: 25% of receipts arising from Right to Buy (and similar) sales may be invested by local authorities in any capital project; receipts from all other HRA sales (including vacant land) may be used for affordable housing or regeneration projects, or used to pay off associated debt.
Last year, the Department consulted on reforms to the HRA, and the paper discussed the proposal that local authorities should also retain the remaining 75% of housing receipts provided they were used for affordable housing or regeneration projects. 37 authorities are recorded as supporting it. As part of the spending review, it was decided that this option would not be pursued at this time. Instead we have added new compensation in the self-financing valuation to cover the loss of income from those homes. This has reduced the amount of debt councils will take on under self-financing by £862 million, which compares with total pooled receipts last year of £133 million. No decision has been made on whether to change the proportion of housing receipts local authorities may retain after 2015.
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