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Self-financing comes to Wales 29/04/2015

ARCH briefing 15/2015


Three years after the reform of the council housing finance system and the introduction of Housing Revenue Account (HRA) self-financing for stock retaining councils in England, HRA self-financing comes to Wales.


On 2 April 2015 the former housing subsidy regime in Wales was abolished and, like their colleague councils in England, the remaining 11 stock retaining councils in Wales went "self-financing". All 11 councils were in "negative subsidy" with a reported £73million pa in rental income being paid over to the Treasury via the Welsh Government.


The deal struck between the Treasury, the Welsh Government and the 11 Welsh local authorities will enable all 11 councils to retain their future rental income to invest in housing services and improvements to the housing stock to meet the Welsh Housing Quality Standard (WHQS) - the Welsh equivalent of the English Decent Homes Standard which Welsh councils must meet by 2020.


Like the English agreement in 2012 the Welsh stock retaining councils have had to buy themselves out of the HRA subsidy system and the Treasury have capped how much Welsh councils can borrow by imposing a HRA Debt Cap on each authority and an overall debt cap of £1.85billion.


The greatest proportion of the overall debt cap has been allocated to seven councils who have not yet met the WHQS but 4 councils have been awarded additional borrowing capacity to start new build programmes but all councils have remaining borrowing headroom within their debt cap as illustrated by the table below:


HRA wales

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