The Ministry of Housing, Communities & Local Government has
published two pieces of guidance for stock retained councils on the
operation of the Housing Revenue Account (HRA) ringfence and
on rent setting and applications to vary from the Government's rent
policy where it would cause the local authority serious and
unavoidable financial difficulty in managing its HRA.
The updated guidance on the HRA ringfence does not change
Government policy on the operation of the HRA ringfence but updates
and sets out expenditure and income that is, and is not,
appropriate for inclusion in the HRA with particular emphasis on
the "grey area" items where a reasonable case might be made for
inclusion in either the HRA or the Council's General Fund.
The guidance distinguishes between "core services", "core plus
services" and "non-core services." Core services which should be
accounted for in the HRA are described as the "bricks and mortar"
functions provided for the principal benefit of tenants and
leaseholders such as repairs and maintenance and general tenancy
management services etc.
Core plus services (which may be appropriate to be charged to
the HRA in part or in full) are those functions provided as
ancillary to the primary purpose of housing which may have wider
benefit to the overall community, including supporting people
services such as sheltered wardens and contributions to corporate
anti-social behaviour services etc.
Non-core services are those services where it would be
inappropriate to assume that the services will be charged to the
HRA, including services such as administration of the housing
register, homelessness etc.
The updated Guidance on the operation of the HRA can be
downloaded from the Government website.
The second piece of guidance sets out the process for applying
to the Secretary of State for an agreement that it would be
inappropriate to apply the Government rent policy in a situation
where to limit the rent increase would cause the local authority
serious and unavoidable financial difficulty. MHCLG stresses that
application for removal of properties from the Government Rent
Policy of limiting rent increases to a maximum of CPI and 1% is
intended only to be used to avoid serious, ongoing financial
difficulty in managing the HRA.
The updated guidance for applications to disapply Government
Rent Policy can be downloaded from the Government website.