‘Raid on ringfenced housing cash is one of country’s worst,’ say Islington leaseholders
Interview with Dr Brian Potter Chairman (ILA) from “Islington Tribune” 15 July 2016
Brian Potter: ‘Breaks the ringfencing’ Published: 15 July, 2016 by JOE COOPER
COUNCIL chiefs have been accused of using money ringfenced for housing on back office spending across other departments.
The housing revenue account (HRA) cash is taken from rents and service charges paid by tenants and is supposed to be ringfenced for investment in homes.
But Islington Council, along with many other local authorities across the country, is able to use a loophole to divert this cash to prop up general funds – by spending the money on finance and legal services used across all council departments.
Chairman of Islington Leaseholders’ Association Brian Potter said it was akin to “laundering money”, adding: “This breaks the ringfencing and is ripping off the HRA.”
Asked whether he thought cuts imposed by central government on local authorities justified the move, Mr Potter said: “Two wrongs don’t make a right. Islington is one of the worst in the country for this.”
Ken Lee, chairman of the housing panel at the Chartered Institute of Public Finance and Accountancy, said: “As social tenants tend to be the poorest and are a minority in society, is it right that they should be supporting the majority in the community?
“We should be looking at strengthening [the HRA] ringfence and bringing it up to date.”
A council spokesman said: “The HRA represents 31 per cent of the council’s gross spend, and council housing represents 37 per cent of the total households in Islington.
“We have since our change of administration in 2010 brought our arms-length management organisation [Homes for Islington] and our housing repairs service in-house. These changes are reflected in the increased proportion of the CDC [corporate and democratic core services] paid for from the HRA.
“All of this is contained in our annual, democratic, budget-setting process and reporting. As a general point, it may be unhelpful to compare councils’ CDC data, as there are likely to be inconsistencies in how different councils classify CDC costs.”