Council Rent Money Misused?

HOUSING minister Kris Hopkins intervenes after councils use rent money for other purposes.

Councils which transferred rent money to support other council services face being forced to return the cash.

The Communities and Local Government department issued a letter to local authorities on Friday, calling for information on transfers between the housing revenue account and the general fund.
The department will consider the responses before deciding whether to demand any of the money be repaid to the Housing Revenue Account (HRA).

The letter said: ‘The ring-fence of the housing revenue account exists to protect the rents paid by local authority tenants, in order to accurately reflect the cost of their housing service. These funds should therefore not be used to cover the costs of other council services.’

Inside Housing revealed in October that at least four councils used a controversial legal loophole to transfer more than £35 million out of their housing revenue accounts.

In the largest switch, Manchester Council transferred £15 million, while Dover moved £12.5 million, Oxford £7 million and Medway £2 million. The legal loophole they used has now been closed.
The letter, sent to a selection of English councils which have admitted transferring HRA funds, accepts that there may have been ‘legitimate resons’ for the transfer.

It requires councils to provide details on the date and purpose of the transfer. A previous letter, issued in November, asked whether any transfers had been made.

Housing Minister Kris Hopkins said:
‘I am clear that all council landlords should act responsibly to manage their housing revenue account.  So I am writing to a small number of councils who have taken up this practice to find out the circumstances behind their decision to do this, to ensure their actions best meet the interests of their tenants.’ 

Report in Inside Housing.