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Councils call on government to go further with HRA funding freedoms

Councils are calling on the government to go further after a senior official revealed a long-awaited £1bn fund can be combined with Right to Buy receipts and grant.

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Councils call on government to go further with HRA funding freedoms #ukhousing

Last week, Rebecca Shrubsole, a senior official in the Ministry of Housing, Communities and Local Government, said the new Housing Revenue Account (HRA) borrowing programme announced in the Autumn Budget will be free of the “restrictions” of the last HRA programme in 2012, which was quietly wound down after £220m was allocated to build just 3,000 of the 10,000-home target.

Ms Shrubsole said: “There won’t be any restrictions as with the last HRA borrowing programme where there was a lot about you having to find your own resources to set alongside the borrowing.

“That’s not the case with this programme. This programme is about enabling those other sources of funding like the social rent programme and the Right to Buy receipts to be used effectively to deliver housing, so you will be able to combine that with the borrowing.”


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Chancellor Philip Hammond announced in the Autumn Budget last year that town halls in areas of “high affordability pressure” would be invited to bid for £1bn of extra borrowing capacity from 2019/20.

However, Lord Gary Porter, chair of the Local Government Association, said while the new programme is a “massive step forward” it is “not going to go far enough”. He added: “Some more councils will bid, but what we needed was greater control of Right to Buy, to be able to set discounts locally and to be able to retain 100% of capital receipts.”

Mike Rowley, board member for housing at Oxford City Council, said the flexibility with the new programme does not go far enough to allow councils to deliver the housing that is needed.

He added: “Every bit of extra flexibility is welcome obviously, but it will need a significant change in policy, particularly on councils’ freedom to borrow, to enable enough housing to be built in Oxford.”

Eamon McGoldrick, managing director of the National Federation of ALMOs, said: “I suppose we’ve just got to take a few steps at a time.

"I think we just need to grab this moment. We have had some members who have struggled to make their Right to Buy receipts work.

"From government’s viewpoint, it could take another excuse for that away. But anything where they relax even a simple rule is all to be welcomed.”

Paul Hackett, director of the Smith Institute, said: “They never seem to just give councils what they want; there are always strings… Why not just allow those with the headroom to borrow more?”

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