Decision details

This report sets out the rationale for re-establishing a Housing Revenue Account (HRA).  

 Cabinet considered the report and RESOLVED to:

1.    Agree to set up a Housing Revenue Account (HRA) subject to approval of the HRA Business Plan to be presented to Cabinet in October 2021 

2.    Agree a minimum stock portfolio target of 1,200 properties by 31 March 2032 (10 Years) with an ambition to supply 2,000 properties by the same date. 

3.    Approve and adopt the HRA Business Model attached at Appendix A  

4.    Approve and adopt the following key documents, which are attached as Appendix B to D: 

a.    Secure Tenancy Agreement (Appendix B) 

b.    Rent Setting Policy (Appendix C) 

c.    Asset Management Plan (Appendix D) 

5.    Delegate authority to approve operational policy documents related to the HRA to the Assistant Director of Housing in consultation with the lead Cabinet Member for Housing. 

6.    Approve the allocation of funding from reserves to cover the setup costs to a total of £556k in 2021/22 subject to internal governance and approval by Council's s151 officer. 

Establishing a HRA for Peterborough is recommended because:  

·         It will support the strategic aims of the Council and enable its ambition to return to directly delivering social housing. 

·         It will help to manage the cost pressures imposed on the Council by reducing the demand and length of time spent in temporary accommodation. 

·         It will help meet the housing needs of local people and reduce homelessness.  

·         It is financially viable, and the business model is fit for purpose. 

Option 1 – the Council should not become involved in the direct provision of social housing for Peterborough (Do Nothing).  

This option is not recommended because of the financial and social impact that the high levels of housing need and homelessness is having on local authority services and the residents of Peterborough, and the fact that the delivery of social and affordable rented housing in the City is not keeping pace with demand.  By not setting up an HRA, the Council will be unable to generate new investment potential to help reduce homelessness and cost pressures.  

Option 2 – the Council should set up a Local Housing Company (LHC) either 100% owned by the Council, or as part of a Joint Venture (JV). 

This option is not recommended because any council funding for such a venture would come from borrowing within the General Fund rather than a ring-fenced HRA, which would place additional financial burden and risk on the Council’s General Fund budget. There is the additional risk that the Government could issue a direction requiring the affordable and social rented properties owned by the LHC be placed into a Housing Revenue Account.  

Option 3 – the council could provide its own social housing grant to housing associations to enable them to build more homes. 

This option is not recommended because the funding would have to come from the General Fund and there is no guarantee that the additional new homes could be used to house homeless households as this would be determined by the associations own lettings policy. 

None.

None.