The agreement means that, in future, the 11 Welsh local authorities that still have housing stock will be in a similar position to stock-owning local authorities in England, where the HRAS system was replaced by self-financing arrangements in March 2012.
This will provide a benefit to the 11 authorities, as they will have the financial flexibility to invest in housing with tenants benefiting from improvements to their homes.
The Chief Secretary to the Treasury, Danny Alexander said:
I am happy to be able to announce the successful conclusion of these discussions. The agreement reached will provide Welsh local authorities with the flexibility they need to manage their own housing revenue, while ensuring that any reform is fiscally neutral.
The Welsh Government’s Minister for Finance, Jane Hutt said:
The HRAS system is complex and the negotiations have had to take account of differences in the way the system has operated in England and Wales. I would like to thank the Chief Secretary to the Treasury for his support in securing this agreement which will enable Welsh local authorities with housing stock to become self-financing and retain all of their rental income.
The Welsh Government’s Minister for Housing and Regeneration, Carl Sargeant added:
This is an historic agreement which will have a direct impact upon the Welsh stock retention authorities and their current and future tenants. It will play a vital role in enabling the 11 authorities to improve their homes to meet the Welsh Housing Quality Standard.
The Welsh Government will continue to work closely with HM Treasury, local authorities and the Welsh Local Government Association to implement the reform.
Notes for editors
The HRAS is a subsidy system based on a complex formula which results in local authorities returning £73million each year to the UK government.
This agreement does not affect the 11 local authorities that have previously transferred their housing stock to Registered Social Landlords.
Photo by Allan Rostron on Flickr. Used under Creative Commons.