Funding for the provision of local authority social housing has, for many years, been managed at national level, under a system called the Housing Revenue Account Subsidy system.
The system pools all rent assumed to be collected at a local level and redistributes the resource back to local authorities to fund management, maintenance and major improvements of the housing stock and to support the borrowing costs that exist in terms of the existing level of housing debt.
Under this formulaic system, Cambridge City Council has been a significant net contributor into the national housing 'pot' for many years, with the negative subsidy due to the government for 2011-12 estimated to be £12.98 million.
In November 2011, the Localism Act confirmed the introduction of a 'self-financing' system for local authority social housing, to be effective from April 2012.
We have, since April 2012, taken on a one-off share of the national housing debt in return for retaining all rental streams in respect of the housing stock. This will allow local decision making to drive the level of investment in the housing stock, agreeing spending priorities in line with local demand.
Decisions have been made at a local level in terms of priorities for investment, delivering a balance between:
- investment in the existing housing stock
- investment in new affordable housing
- investment in new initiatives and income generating activities
- spend on landlord service (ie housing management, responsive and void repairs)
- spend on discretionary services (ie support)
- repayment of housing debt
To effectively manage the housing business into the future, it is imperative that the housing service has an in depth knowledge of the condition of the housing stock it is managing, coupled with a clear understanding of the direction in which it would like to see services travel.
