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HRA self-financing

HRA self-financing

Opportunities for local authority new build

Self-financing was implemented on 1 April 2012.  For the last two years local housing authorities have been getting to grips with the opportunities for new build - and also the constraints – within the self-financing settlement.

Direct new build
In addition to new HRA developments, for those authorities who are at or very close to their debt cap or have earmarked their headroom for other purposes, consideration could be given to using non-Housing Act powers to build dwellings and we can advise on this complex (and contentious) area.

New build through a subsidiary (including an ALMO)
The HRA debt cap for a local authority may prompt a discussion about the creation or use of a General Fund vehicle as the Council's conduit for new build activity.  We can advise on powers, prudential borrowing, consents, procurement, state aid and accounting treatment.

Joint ventures
Key areas we can advise on in any joint venture arrangement include corporate vehicle options, project risks, profit sharing, exit arrangements, golden share provisions, nomination rights and housing management provision. 

Institutional investment
Institutional investment in local authority housing is not a main stream activity yet but there is considerable interest in it. We advised the fully privately funded Barking and Dagenham new build deal involving the construction and long term management of 477 new units on a range of sub-market rents. 

Unofficial HRA Manual
The rules for the Housing Revenue Account are important and complex.  The last official Manual was published many years ago, in 2006-7;  and of course since then the HRA Subsidy system has been replaced with Self-financing.   We are often asked to advise on HRA law and practice and we have long been aware of the need for new guidance.  We have therefore decided to produce an Unofficial Manual.  Drafted by Ian Doolittle, it provides straightforward answers to the questions clients regularly ask, while at the same time giving references to the relevant statutes, regulations, directions and determinations. It has already benefited from input from Council experts and it will continue to be updated as both law and policy change.  If you are a Council officer who would like a copy please email hramanual@trowers.com

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