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MHCLG updates the HRA Guidance 19/11/2020 Labelled as Legislation

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.

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