Half of Councils Setting Up Companies to Tackle Housing Shortage

Nearly half of councils in England have either set up a housing company or are considering doing so, according to a new survey. The research, conducted by 3Fox International, shows 12% of councils have already created a housing company to generate income from developments, with 34% actively debating the idea. The survey showed that the main driver for setting up a housing company was the need to provide a long-term housing solution (61%), with a third saying the main objective was to raise money. Read more on the LocalGov website.

Council Dips Into Housing Budget to Aid General Fund

Islington Council is to join a growing band of local authorities propping up their ailing general funds with housing cash by billing the budget for a significant slice of its Supporting People costs. The north London authority intends to start charging its housing revenue account £1.3 million for services that were previously funded by Supporting People. The authority was awarded nearly £15 million for the programme in 2012/13, the last year an allocation was given. Islington Council papers published last month reveal that the £1.3 million switch relates to ‘landlord services’ previously charged to the general fund. Read more on Inside Housing.

Councils May Be Asked To Return HRA Cash

Cash-strapped councils that topped up their ailing general funds with millions of pounds of rent money could be forced to return the cash, the housing minister has warned. Kris Hopkins has written to every council in England to check where this practice had taken place and to determine whether the cash should be returned to the HRA. In the largest switch, Manchester Council transferred £15 million, while Dover moved £12.5 million, Oxford £7 million and Medway £2 million. The legal loophole they used has now been closed.  Download a copy of the letter from the Govuk website.

Transfer of Funds from the HRA to the General Fund

Letter from the Department for Communities and Local Government (DCLG) to all local authority chief finance officers requesting information about the possible transfer of funds from the ring-fenced Housing Revenue Account to the General Fund. Download a copy of the letter from the GovUk website.

Fourth Council Raiding Rents Exposed

The legal powers deployed by town halls for last month’s £35 million raid on their housing budgets could be ‘contrary’ to the aims of the law they relied on. This was the stark warning issued by external auditors appointed by Canterbury Council, the fourth authority Inside Housing can identify as transferring cash from its housing revenue account to its general fund in September.  As reported previously, the government is investigating a series of similar multi-million pound transfers which took place throughout last month before the legal loophole was officially closed on 1 October.

Councillors in Canterbury voted last month to an irreversible transfer of almost £1 million out of its HRA, despite the auditor’s warning and protests from within its ruling Conservative group. Read more on Inside Housing.

Councils’ £35m Raid on Rents

Government launches investigation as three councils transfer housing revenue account cash into their general funds.  The government has launched an investigation into a spate of multi-million pound cash transfers in which councils have raided their rent accounts to prop up their ailing general funds. At least three authorities called urgent meetings last month to sign off shifting sums totalling £34.5 million out of their housing revenue accounts. Councillors in Manchester, Oxford and Dover rubber-stamped the transfers on the recommendation of officers and following advice from consultancy Capita.  Read more on Inside Housing.