Experts call for speedy reforms to the HRA

8 Jun 09
Treasury concerns over uncontrolled prudential borrowing should not prevent major changes to the housing finance system, ministers have been told

29 May 2009

By Neil Merrick

Treasury concerns over uncontrolled prudential borrowing should not prevent major changes to the housing finance system, ministers have been told.

According to housing experts, councils in England leaving the housing revenue account system would be covered by safeguards, such as agreeing levels of borrowing with the government in a ‘self-financing’ business plan.

The results of a year-long review of housing finance could be published next month. Five housing finance experts, including John Perry of the Chartered Institute of Housing and professor Steve Wilcox of the Centre for Housing Policy at York University, have submitted their views to the Department for Communities and Local Government. They said changes to the HRA must be made quickly so that councils can retain their rent income and have more flexibility to invest in homes.

The Tenant Services Authority is due to expand its regulatory regime to English councils from next April, so ensuring further monitoring. Delays over reforming the HRA have led some councils to consider stock transfers to housing associations.

The government should aim to create a financial system that is understandable and transparent to tenants and councillors, with councils covered by similar accounting rules to housing associations, the paper said.

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