Local government finance is a fascinating area. Honestly.
Those local housing authorities which still retain housing stock are required keep records of their housing income and expenditure. They also operate a Housing Revenue Account (“the HRA”). The HRA is required to balance each year and, if there is a surplus, that surplus is paid to the Government and used to cover shortfalls in the HRA of other local housing authorities – see, generally, Part 6 of the Local Government and Finance Act 1989.
Section 313 Housing and Regeneration Act 2008 introduced a new s.80B into the 1989 Act. It would provide for the Secretary of State (or the Welsh Ministers) to disapply parts of the 1989 Act so that, for example:
(a) local housing authorities could keep any surplus, with the intention that the surplus be used to fund new homes – see CLG press release New Legislation for Greener, More Affordable Housing, Nov 16, 2007; or
(b) any newly built, purchased or renovated properties would be exempted from the provisions of the HRA, so that, again, any surplus could be used to find new homes – see CLG press release New Freedoms to Increase Council Housing, Jan 21, 2009.
The Government is now consulting on example (b). The consultation document is here and runs until April 17, 2009.