More Than 80% Of Councils Now Own Housing Companies

More than 80% of local authorities in England currently own housing companies and the number of councils entering into joint ventures (JVs) is also on the rise. Researchers at University College London (UCL) have found that 83% of councils in England currently have housing companies, compared with 78% in 2019 and 58% in 2017. The report said the increase in the number of councils building outside of the Housing Revenue Account may be connected to a proliferation in JVs with private sector partners or housing associations to deliver new homes. Read more on Inside Housing.

Inside Housing - News - More than 80% of councils now own housing companies, research finds

Council Set To Confirm Plan To Shut ALMO

Manchester City Council’s executive committee is expected to rubber stamp the decision to close Northwards Housing. Northwards manages around 13,000 homes on behalf of the local authority, having been established in 2005. A test of opinion consultation with residents gathered 1,633 votes with 93% indicating their support for the council’s proposal to bring housing management under its direct control. Manchester Council declared its intention to scrap Northwards in June amid concerns over its repairs service and Housing Revenue Account (HRA) finances. The authority’s 30-year HRA business plan is forecast to end up £438m in deficit. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/manchester-city-council-set-to-confirm-plan-to-shut-almo-69148?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Councils Ask For Housing Discounts Following PWLB Rate Rise

Councils have asked the Treasury to offer discounts on public borrowing rates for housing after interest levels were hiked last week. The government told local authorities that it is increasing the cost of new borrowing from the Public Works Loan Board (PWLB) by 1%, bringing the rate to 1.8% over gilts, which sit at around 1%. The move has led to concerns in local authorities across the country that the increase could threaten planned housing and regeneration schemes. Town halls across the country have been putting in place huge borrowing programmes to build new homes after the government abolished the Housing Revenue Account (HRA) debt cap in October last year. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/councils-ask-for-housing-discounts-following-pwlb-rate-rise-63708?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Council To Spend £750,000 Keeping KCTMO Running

Board papers from the from the Royal Borough of Kensington and Chelsea (RBKC) revealed a total of £750,000 would be spent on the Kensington and Chelsea Tenant Management Organisation (KCTMO) in 2019/20, with £250,000 being found through the company’s reserves. The remaining £500,000 will be funded directly by RBKC, through its Housing Revenue Account (HRA) budget. The KCTMO managed 9,000 homes across the borough including the Grenfell Tower at the time of the fire in June 2017. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/council-to-spend-750000-keeping-kctmo-running-59817?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Council Housing: Construction – Parliamentary Written Answer

Lord Greaves: To ask Her Majesty's Government whether local housing authorities that divested themselves of their council housing stocks in the past and closed their housing revenue accounts (HRAs) are able to set up new HRAs and build new council housing under their new proposals for lifting the cap on local authority borrowing for such purposes or otherwise.

Lord Bourne of Aberystwyth: Yes. All local housing authorities (LHA) retain the power to provide housing under Part II of the Housing Act 1985. Where they do they are under a duty to account for this in a Housing Revenue Account by section 74 of the Local Government and Housing Act 1989, unless that requirement is disapplied by direction by the Secretary of State – which may be considered appropriate if the LHA only has limited housing stock.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Lords/2018-10-09/HL10483

Green Paper Leaves Question Marks Over Council Housing Companies

Councils are seeking clarification over the government’s stance on town hall housing companies after the Social Housing Green Paper hinted at plans to curb the use of subsidiary landlords to dodge Right to Buy sales. A number of councils intend to press Whitehall officials to explain the government’s position on local authority-owned housing companies as they review how the green paper could affect enterprises they have set up. The document said “local authorities should deliver new affordable housing through their Housing Revenue Account (HRA)” unless they have transferred their stock or the HRA cannot sustain new development. It added that where housing companies are delivering and retaining affordable housing, ministers “would expect them to offer an opportunity for tenants to become homeowners”. Read more on Inside Housing.

https://webcache.googleusercontent.com/search?q=cache:ush9frUnHJ4J:https://www.insidehousing.co.uk/home/green-paper-leaves-question-marks-over-council-housing-companies-57682+&cd=3&hl=en&ct=clnk&gl=uk&safe=vss

Abolish Borrowing Cap So Local Authorities Can Increase Housing Supply

In Autumn Budget 2017, the Government raised the borrowing cap for councils in areas of high affordability by £1 billion to help achieve its target of 300,000 new homes per year. Private housebuilders have consistently provided 150,000 units per year, so the target is unlikely to be met without a significant increase in supply by local authorities. To achieve this, the Housing Revenue Account borrowing cap should be removed. At the very least, the Treasury should define the allocation criteria for the additional £1 billion more clearly. Read more on the Parliament website.

http://www.parliament.uk/business/committees/committees-a-z/commons-select/treasury-committee/news-parliament-2017/budget-autumn-2017-report-published-17-19/

Budget Must Let Councils ‘Take Back Control’ Of Housing Assets And Revenue

Next month’s budget must let Councils ‘take back control’ of their housing assets and revenue by committing to the principles of HRA self-financing for council housing, a new paper says. The paper sets out key asks on allowing councils to lift the HRA debt caps for new build purposes and relying instead on prudential borrowing rules to enable investment in new homes – paid back from rental income. Where government can’t or won’t commit, the paper offers a get out option – approve a number of bespoke deals as quickly as possible to create a group of “market leaders” who could share experience and good practice with others. Read more on the ARCH website.

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.

MPs: Scrap Housing Revenue Account Cap Where Housing Unaffordable

Borrowing caps on councils’ Housing Revenue Accounts (HRA) should be raised – and, in some cases, scrapped – to help boost housebuilding, MPs have recommended. A report by the Communities and Local Government Committee, Capacity in the Homebuilding Industry, suggests that HRA borrowing caps are limiting local authorities’ ability to build. The report notes that research found that 57% of 141 councils had not made use of the additional borrowing capacity since the introduction of self-financing in 2012. Download the report from the Parliament website.

Housing: Construction – Parliamentary Written Answer

Thangam Debbonaire:  To ask the Secretary of State for Communities and Local Government, with reference to the report of the House of Lords Economic Affairs Committee, Building More Homes, HL 20, published on 15 July 2016, for what reasons there is a limit on the amount local authorities can borrow to invest in building houses.

Gavin Barwell: The borrowing caps were introduced as part of the Housing Revenue Account self financing settlement, which entailed a once and for all rebalancing of housing debt. There are no plans to lift the caps, which are part of the government's strategy to manage the overall level of public debt. Local authorities do have the capacity to borrow to build new homes, there is nearly

£3.4 billion headroom available nationally and £2.9 billion in reserves. 

Council Housing: Sales - Parliamentary Written Answer

John Healey: To ask the Secretary of State for Communities and Local Government, what estimate he has made of the cost of processing and validating local authority data on the sale of higher value

council homes.

Brandon Lewis: To cover the cost of providing the data about housing stock, we made a one-off grant payment of £5,000 to each local authority with a Housing Revenue Account. No estimate has been made about the ongoing cost of keeping this data up-to-date. The processing and validating of the data is being carried out by departmental officials as part of policy development.

Councils Increasingly Look To HRAs For Capital Spend

Councils are increasingly funding capital spending through their Housing Revenue Accounts (HRAs) or major repairs reserves as government funding has decreased, a National Audit Office (NAO) report has found. Since 2010/11, funding from the HRA or major repairs reserves to support capital spending has increased by 58%. In 2010/11 £1.4bn came from HRAs, compared to £2.2bn in 2014/15. The NAO’s report looks at how councils’ capital funding and spending has changed since 2010, when the government started to reduce funding for local government. It found there are increasing pressures from capital spending and if authorities “cannot reduce their capital costs… it will place further pressure on their revenue spending”. Download the report from the NAO website.

CLG Set Out Process For Rent Exemptions

The CLG has set out information and guidance for councils considering applications for exemption from the mandatory four year 1% rent reduction. The information and guidance makes it clear that the Secretary of State will only consider granting an exemption if it is the only way to avoid the authority's Housing Revenue Account falling into serious financial difficulties. Any council considering applying for an exemption from the mandatory 1% rent reduction will need to demonstrate that they have considered all other options for reducing expenditure in line with reduced rental income including looking at existing contractual commitments. Download the guidance from the CLG website.

Councils Hold Back From New HRA Borrowing

Billions of pounds in potential housing investment are being shored up by councils for fear of further changes to rent-setting rules. A survey of 141 councils that run social housing found just 43% have made use of their official permission to borrow more money for housing since 2012. As a result of this widespread reticence, these 141 councils’ collective borrowing power has actually increased from £2.5bn in 2012 to £2.6bn in 2016/17 amid urgent demand for new housing across England. The findings are the most extensive analysis of the multibillion pound borrowing powers awarded to councils as part of the coalition’s historic Housing Revenue Account (HRA) self-financing settlement. Read more on Inside Housing.

ALMO CEO Stands Down In Restructure

The chief executive of Your Homes Newcastle (YHN) is to step down after 10 years at the helm of the city’s housing provider. John Lee will leave at the end of the year after heading up the arms-length management organisation (Almo), owned by Newcastle City Council, since it was set up in 2004. Mr Lee had been seconded as a business expert to the council in August to help it become more commercially focused, but it is understood he has now accepted a voluntary redundancy arrangement. It comes following a YHN board meeting in which a restructure was agreed and amid housing reforms and continuing central government austerity. Also, in a significant change to the management of the city’s housing, “financial and strategic accountability” for the housing revenue account has been passed back to the city council. Read more on the Newcastle Chronicle website.

Lewis Challenges Councils To Spend £2bn On Social Housing

Housing minister Brandon Lewis has challenged local authorities to use more than £2bn to build more social housing. The minister said that councils had the cash in their housing revenue accounts to build more social housing. Lewis also said that although the statement by George Osborne was dominated by pledges for homes to buy, the government remained committed to housing “in the tenures we need”. He continued: “Councils have still got over £2bn in their housing revenue accounts to deliver homes and I want to see them use it. Let me be very clear about this. We’ve been very focused on stepping up housing supply. But that doesn’t change the fact that there is a commitment.” Read more on 24dash.

1,000 Council House-Building Plan Cut To Just 78 Homes

Reading council’s ambitious plan to build 1,000 council houses over 30 years has been cut back to just 78. The business plan to start the scheme was drawn up by Reading Borough Council through its housing revenue account in April and demolished by Chancellor George Osborne in July in his emergency budget. The chancellor’s rent reduction for council and social housing tenants of one per cent per year for the next four years - intended to cut the housing benefit bill - meant the figures for 1,000 homes no longer added up. Read more on the Get Reading website.

Social Rented Housing: Standards – House of Lords Written Answer

Baroness King of Bow: To ask Her Majesty’s Government what plans they have to extend the Decent Homes Backlog Funding initiative beyond 2015–16

Lord Ahmad of Wimbledon: Spending decisions for 2016-17 onwards are a matter for the next Spending Review. £1.6 billion worth of funding was awarded to local authorities to tackle their Decent Homes backlog in 2011-15. A further £165 million was awarded for year 2015-16. Since the abolition of the Housing Revenue Account subsidy system in April 2012, councils have greater freedoms including the retention of their full rental income. This means that all 167 council landlords in England have a long term, stable source of funding, which they can use to plan better to meet the needs of their tenants and local area. These councils have, on average, 15% more to spend on managing and maintaining their homes, including meeting the Decent Homes Standard, than under the previous system.

Councils 'Should Form House Building Companies'

A government-commissioned report into council house building will recommend councils form companies to build off-balance sheet and increase joint working. Keith House, leader of Eastleigh Borough Council and co-author of the report, told Inside Housing it would recommend ways councils could access further borrowing power without the government lifting caps on the housing revenue account (HRA). He suggested council-owned companies could be one way of achieving this. Setting up a company allows the council to borrow from the public works loan board at low rates without breaching its HRA cap. Read more on Inside Housing.