DCLG calls on LAs to justify HRA/general fund transfer
0The government is investigating whether it can force councils which transferred cash from their housing revenue accounts to general funds to reverse the move.
At least five English councils have transferred funds from their ring-fenced HRA accounts using the power in Schedule 4, Part 3(2) of the Local Government and Housing Act 1989, ahead of the provision’s repeal in early October.
Yesterday, Jane Todorovic, DCLG’s deputy director, affordable housing management and standards, wrote to local authorities to find out which other councils have used the power, and to warn them that they could be forced to undo the transfers. The letter said: “The department is…concerned that authorities may have sought to use the provision…to transfer funds to the general fund.
“The department is considering whether it would be appropriate, where funds have been transferred, to determine or direct that such funds should be returned to the Housing Revenue Account.”
Matthew Warburton, policy adviser at the Association of Retained Council Housing, said that the letter seemed to concede that the transfer of funds had been lawful.
He said: “By saying the secretary of state might make a determination, they have decided not to advise them that the move was illegal.” He added that government officials would need to be careful that any future direction it decided to make did not amount to a retrospective rewriting of the law. Councils in Canterbury, Dover, Manchester, Medway and Oxford are known to have transferred a total of £37.4m from their HRA accounts to their general funds in the run up to the October repeal.
Todorovic asked councils to respond to her letter by 10 December, and asked them to consider holding off from using the transferred funds until the department has completed its investigations.
