Housing Act 1985

PART XIII GENERAL FINANCIAL PROVISIONS

Housing accounts of local housing authorities

417 The Housing Revenue Account.

(1) A local housing authority shall keep an account, called the “Housing Revenue Account”, of the income and expenditure of the authority in respect of—

(a) all houses and other buildings which have been provided under Part II (provision of housing),

(b) all houses purchased under section 192 (purchase of house found on appeal against repair notice to be unfit and beyond repair at reasonable cost),

(c) all dwellings in respect of which a local authority have received assistance under section 1 or section 4(2A) of the [1926 c. 56.] Housing (Rural Workers) Act 1926, and

(d) all land which has been acquired or appropriated for the purposes of Part II,

and such land, houses or other buildings not within the preceding paragraphs as the authority may determine from time to time with the consent of the Secretary of State.

(2) The consent of the Secretary of State for the purposes of subsection (1) may be given either generally to local housing authorities or to a particular authority or description of authority or in a particular case.

(3) References in this Part to the houses or other property of an authority within the authority’s Housing Revenue Account are to the houses, dwellings or other property falling within subsection (1).

(4) A local housing authority not possessing property falling within subsection (1) shall nevertheless keep a Housing Revenue Account if they are entitled to receive income arising from the investment or other use of money borrowed by them for the purpose of—

(a) the provision of housing accommodation under Part II, or

(b) the purchase of houses under section 192 (houses found on appeal against repair notice to be beyond repair at reasonable cost) or the carrying out of works on houses purchased under that section,

or if they are entitled to receive income arising from the investment or other use of money derived from the sale or other disposal of dwellings or other property which has at any time been within their Housing Revenue Account.

418 The keeping of the Housing Revenue Account.

The provisions of Schedule 14 have effect with respect to the keeping of an authority’s Housing Revenue Account, as follows—

• Part I—Credits to the account.

• Part II—Debits to the account.

• Part III—Supplementary provisions as to matters arising before 1972.

• Part IV—Rate fund contributions.

• Part V—Other supplementary provisions.

419 The Housing Repairs Account.

(1) A local housing authority who are required to keep a Housing Revenue Account may also keep, in accordance with this section, an account called the “Housing Repairs Account”.

(2) An authority who keep a Housing Repairs Account shall credit to the account—

(a) contributions from their Housing Revenue Account,

(b) sums received by the authority in connection with the repair or maintenance of houses or other property (within the authority’s Housing Revenue Account (either from their tenants or from the sale of scrapped or salvaged materials), and

(c) income arising from the investment or other use of money credited to the account.

(3) The authority shall debit to the account—

(a) all expenditure incurred by them in connection with the repair or maintenance of houses or other property within their Housing Revenue Account,

(b) such expenditure incurred by them in connection with the improvement or replacement of houses or other property within their Housing Revenue Account as may from time to time be determined by the Secretary of State, and

(c) any amount which is carried to the credit of the Housing Revenue Account in accordance with subsection (5);

and in this subsection “expenditure” includes loan charges.

(4) The authority shall secure that sufficient credits are carried to the account to secure that it never shows a debit balance.

(5) If the authority consider that a credit balance in the account at the end of a year will not be required for the purposes of the account, they may carry some or all of the balance to the credit of their Housing Revenue Account.

(6) If an authority who have opened a Housing Repairs Account cease to maintain the account, any balance shall be carried to their Housing Revenue Account.

(7) A determination of the Secretary of State under subsection (3)(b) may be made to apply to local housing authorities generally or to a particular authority or group of authorities and may make different provision in respect of different cases or descriptions of case.

420 Directions to secure proper accounting.

(1) Where it appears to the Secretary of State, as regards a Housing Revenue Account or Housing Repairs Account—

(a) that amounts in respect of incomings and outgoings provided for in this Part have not been properly credited or debited to the account, or

(b) that amounts in respect of incomings and outgoings not so provided for ought properly to be credited or debited to the account, or

(c) that amounts have been improperly credited or debited to the account,

he may give directions for the appropriate credits or debits to be made, or for the rectification of the account, as the case may require.

(2) In the case of incomings and outgoings not provided for in this Part the direction may, instead of directing particular amounts to be credited or debited, direct generally that credits or debits shall be made in respect of incomings and outgoings of a kind specified in the direction.

(3) Without prejudice to the generality of the preceding provisions, the Secretary of State may give such directions (which may be general directions or directions for a particular case) as to the amounts to be credited or debited to a Housing Revenue Account or Housing Repairs Account as in his opinion will ensure that the account reflects a proper system of internal accounting of the authority.

(4) Before giving a direction the Secretary of State shall consult—

(a) such associations of local authorities as appear to him to be concerned, and

(b) any local authority with whom consultation appears to him to be desirable,

except where the authorities who are to comply with the direction are all named in it, in which case the Secretary of State shall consult each of those authorities and need not consult any association of local authorities.

Housing subsidy

421 Housing subsidy.

(1) Housing subsidy is payable for each year to housing authorities.

(2) Housing subsidy shall be credited—

(a) if paid to a local housing authority, to the authority’s Housing Revenue Account, and

(b) if paid to another body, to that body’s housing account or appropriate housing account.

(3) Housing subsidy shall be paid by the Secretary of State at such times, in such manner and subject to such conditions as to records, certificates, audit or otherwise as he may, with the agreement of the Treasury, determine.

(4) Payment of housing subsidy is subject to the making of a claim for it in such form, and containing such particulars, as the Secretary of State may from time to time determine.

422 Calculation of housing subsidy for local housing authorities.

(1) The amount of the housing subsidy payable to a local housing authority for a year (the year of account) shall be calculated from the amounts which, in accordance with sections 423 to 425, are the authority's—

(a) base amount (BA),

(b) housing costs differential (HCD), and

(c) local contribution differential (LCD),

for the year, and shall be so calculated by using the formula BA + HCD — LCD.

(2) If the amount so calculated is nil or a negative amount, no housing subsidy is payable to the authority for that year.

423 The base amount.

(1) A local housing authority’s base amount for a year of account is, subject to any adjustment under subsection (2), the amount calculated for the preceding year under section 422, that is to say, the amount of the housing subsidy payable to the authority for that year or, if none was payable, nil or a negative amount, as the case may be.

(2) If the Secretary of State is of opinion that particular circumstances require it, he may adjust the base amount for amy year by increasing or decreasing it, either generally or in relation to any description of authority or any particular authority.

424 The housing costs differential.

(1) A local housing authority’s housing costs differential for a year of account is the amount by which their reckonable expenditure for that year exceeds their reckonable expenditure for the preceding year (and accordingly is nil or, as the case may be, a negative amount if the reckonable expenditure for the year is the same as or less than that for the preceding year).

(2) A local housing authority’s reckonable expenditure for a year is the aggregate of—

(a) so much of the expenditure incurred by the authority in that year and falling to be debited to the authority’s Housing Revenue Account as the Secretary of State may determine, and

(b) so much of any other expenditure incurred by the authority in that year, or treated as so incurred in accordance with a determination made by the Secretary of State, as the Secretary of State may determine to be taken into account for the purposes of housing subsidy.

(3) A determination may be made for all local housing authorities or different determinations may be made—

(a) for authorities of different descriptions, or

(b) for authorities in England and authorities in Wales, or in different parts of England or Wales; or

(c) for individual authorities;

and a determination may be varied or revoked in relation to all or any of the authorities for which it was made.

(4) Before making a determination for all local housing authorities the Secretary of State shall consult organisations appearing to him to be representative of local housing authorities.

425 The local contribution differential.

(1) A local housing authority’s local contribution differential for a year of account is the amount by which their reckonable income for that year exceeds their reckonable income for the preceding year (and accordingly is nil or, as the case may be, a negative amount if their reckonable income for the year is the same as or less than that for the preceding year).

(2) An authority’s reckonable income for a year is the amount which, in accordance with any determination made by the Secretary of State, the authority are assumed to receive for that year as income which they are required to carry to their Housing Revenue Account including—

(a) any contribution made by the authority out of their general rate fund, and

(b) any rent rebate subsidy payable under section 32 of the [1982 c. 24.] Social Security and Housing Benefit Act 1982,

but excluding any other subsidy, grant or contribution.

(3) A determination shall state the assumptions on which it is based and the method of calculation used in it, and in making it the Secretary of State shall have regard, amongst other things, to past and expected movements in incomes, costs and prices.

(4) A determination may be made for all local housing authorities or different determinations may be made—

(a) for authorities of different descriptions, or

(b) for authorities in England and authorities in Wales, or in different parts of England and Wales, or

(c) for individual authorities.

(5) Before making a determination for all local housing authorities the Secretary of State shall consult organisations appearing to him to be representative of local housing authorities.

(6) A determination shall be made known to the authorities for which it is made in the year preceding the year of account for which it is to have effect.

426 Calculation of housing subsidy for other authorities.

(1) Sections 422 to 425 (calculation of housing subsidy) apply in relation to new town corporations and the Development Board for Rural Wales as they apply in relation to local housing authorities, but subject to the following provisions of this section.

(2) In relation to a new town corporation—

(a) sections 424(2) and 425(2) (reckonable expenditure and income) have effect with the substitution for references to the authority’s Housing Revenue Account of references to the corporation’s housing account, and

(b) section 425(2)(a) (reckonable income to include rate fund contributions) has effect with the substitution for the reference to the authority’s general rate fund of a reference to the corporation’s general revenue account.

(3) In relation to the Board—

(a) sections 424(2) and 425(2) (reckonable expenditure and income) have effect with the substitution for references to the authority’s Housing Revenue Account of references to the Board’s housing account, and

(b) section 425(2)(a) (reckonable income to include rate fund contributions) has effect with the substitution for the reference to any contribution made by the authority out of their general rate fund of a reference to any contribution made by the Board out of revenue.

(4) The consultation required by section 424(4) or 425(5) (consultation before making general determinations) shall be with organisations appearing to the Secretary of State to be representative of new town corporations or, as the case may be, with the Developmental Board for Rural Wales.

(5) The Commission for the New Towns shall be treated as a separate body in respect of each of its new towns.

427 Recoupment of subsidy in certain cases.

(1) Where housing subsidy has been paid to a local housing authority or other body and it appears to the Secretary of State that—

(a) the purpose for which it was paid has not been fulfilled or not completely or adequately or not without unreasonable delay, and

(b) that the case falls within rules published by him,

he may recover from the authority or other body the whole or such part of the payment as he may determine in accordance with the rules, with interest from such time and at such rates as he may so determine.

(2) A sum recoverable under this section may, without prejudice to other methods of recovery, be recovered by withholding or reducing housing subsidy.

(3) The withholding or reduction under this section of housing subsidy for a year does not affect the base amount for the following year.

Borrowing powers

428 Continuance of certain powers to borrow for housing purposes.

(1) A local authority may borrow for any of the purposes for which borrowing was, before the commencement of this Act, authorised by—

• section 136(1) of the [1957 c. 56.] Housing Act 1957,

• section 54(1) of the [1958 c. 42.] Housing (Financial Provisions) Act 1958, or

• paragraph 19 of Schedule 8 to the [1969 c. 33.] Housing Act 1969.

(2) The maximum period which may be sanctioned as the period for which money may be borrowed for any of those purposes by the Common Council of the City of London is 80 years, notwithstanding the provisions of any Act of Parliament.

Miscellaneous

429 The improvement for sale scheme.

(1) The Secretary of State may, with the consent of the Treasury, make schemes for making contributions to the net cost (as determined under the schemes) to local housing authorities of disposing of dwellings where the authority—

(a) disposes of a house as one dwelling,

(b) divides a house into two or more separate dwellings and disposes of them, or

(c) combines two houses to form one dwelling and disposes of it,

after carrying out works of repair, improvement or conversion.

(2) The cost towards which contributions may be made under such a scheme shall not exceed, for any one dwelling—

(a) in respect of a dwelling in Greater London, £10,000.

(b) elsewhere, £7,500,

or such other amount as may be prescribed by order of the Secretary of State made with the consent of the Treasury.

(3) An order under this section—

(a) may make different provision in respect of different cases or descriptions of case, including different provision for different areas, and

(b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(4) In this section “house” includes a flat.

430 Application of capital money received on disposal of land.

(1) Capital money received by a local authority in respect of a disposal of, or other dealing with, land held for any of the purposes of this Act shall be applied either in the repayment of debt or for any other purpose for which capital money may properly be applied.

(2) Where section 27 of the [1959 c. 53.] Town and Country Planning Act 1959 (general power to apply capital money without consent) does not apply, the application of capital money in accordance with subsection (1) shall be effected only with the consent of the Secretary of State, except that capital money received in respect of the disposal of, or other dealing with, land held for the purposes of Part II (provision of housing) may, without such consent, be applied by the authority in or towards the purchase of other land for the purposes of Part II.

431 Control of expenditure by housing authorities on works of conversion or improvement.

(1) A local authority or new town corporation may not incur expenses in—

(a) providing dwellings by the conversion of houses or other buildings, or

(b) carrying out works required for the improvement of dwellings, with or without associated works of repair,

except in accordance with proposals submitted by the authority or corporation to the Secretary of State and for the time being approved by him.

(2) The Secretary of State’s approval may be given subject to such conditions, and may be varied in such circumstances, as appear to him to be appropriate; but before varying the terms of an approval he shall consult the authority or corporation concerned.

(3) In this section “dwelling” has the same meaning as in Part XV (grants for works of improvement, repair and conversion).

432 Superseded contributions, subsidies, grants, and other financial matters.

The provisions of Schedule 15 have effect with respect to superseded contributions, subsidies, grants and other financial matters, as follows—

• Part I—Loans under the Housing (Rural Workers) Acts 1926 to 1942.

• Part II—Exchequer contributions for agricultural housing.

• Part III—Contributions for improvement of dwellings by housing authorities.

• Part IV—Town development subsidy.

Supplementary

433 Minor definitions.

In this Part—

• “year” means a period of twelve months beginning on a 1st April.

434 Index of defined expressions: Part XIII.

The following Table shows provisions defining or otherwise explaining expressions used in this Part (other than provisions defining or explaining an expression used in the same section or paragraph):—

base amount	section 423
development corporation	section 4(c)
general rate fund	section 622
hostel	section 622
houses or other property within the account (in reference to the Housing Revenue Account)	section 417(3)
housing authority	section 4(a)
housing costs differential	section 424
Housing Repairs Account	section 419(1)
Housing Revenue Account	section 417(1)
housing subsidy	section 421(1)
loan charges (in relation to the keeping of the Housing Revenue Account)	paragraph 2 of Part V of Schedule 14)
local authority	section 4(e)
local contribution differential	section 425
local housing authority	section 1, 2(2)
new town corporation	section 4(b)
receiving authority (in Part IV of Schedule 15)	paragraph 6 of that Part
year	section 433
year of account (in relation to housing subsidy)	section 422