Social Care and Social Housing News

HRA Self Financing

With the end of Housing Subsidy in 2012 there will be a sea change to the world of housing finance.  The housing finance calendar will no longer be dominated by Whitehall’s annual subsidy determination and housing authorities will to a large degree be in control of their own destiny. 

The change brings with it a number of major risks and opportunities.  In order to secure a future as a thriving social landlord Councils need to start planning now to ensure that they can balance the books whilst levering in sufficient investment.  Councils that fail to develop a robust long term strategy risk seeing the stagnation or decline of their housing stock back to the bad old days before the Decent Homes Standard was introduced. 

Directors of Finance and Heads of Housing Finance can have an enormous impact on the future of Council housing by helping politicians and housing managers understand the challenges and the choices available to address them.  To assist this process Marchaven Consulting has developed a thirty year Housing Revenue Account and housing investment modelling tool designed to help accountants, managers and politicians ask those vital “what if?” questions. 

Drawing on our practical experience of advising dozens of local authorities on housing financial management and strategy over the past fourteen years, the model can be used to test a wide range of assumptions about the key variables that will impact the Housing Revenue Account and to answer questions such as:

• Given no change in our cost base, what level of investment can we afford to make in our housing stock?
• How will changes in rent levels affect the HRA over time?
• What are the alternative approaches for implementing IFRS and what long term impact will this have on our depreciation charge?
• Is there an optimal balance between interest charges and RCCO and will this be impacted by our depreciation policy?
• What level of efficiency savings would be needed to our management and maintenance costs in order for us to keep the housing stock at its current standard?
• What impact will long-term movements in interest rates have on the HRA balance?

To find out more about how Marchaven can help your Council take control of its own destiny as a social landlord contact either Jarvis Whitehead (jarvis.whitehead@marchaven.co.uk or 07802 740524) or Steve Everson (steve.everson@marchaven.co.uk or 07949 746643)

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