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Publication - Guidance

Guidance on the operation of Local Authority Housing Revenue Accounts (HRAs) in Scotland

Published: 3 Mar 2014
Part of:
Housing
ISBN:
9781784123093

Guidance relating to the role of Housing Revenue Accounts (HRA).

55 page PDF

1.5MB

55 page PDF

1.5MB

Contents
Guidance on the operation of Local Authority Housing Revenue Accounts (HRAs) in Scotland
SECTION 2: SUMMARY OF THE KEY HRA OPERATING PRINCIPLES

55 page PDF

1.5MB

SECTION 2: SUMMARY OF THE KEY HRA OPERATING PRINCIPLES

6. The key principles under which the HRA must operate are:

i. it is compliant with legislation; any statutory guidance that Scottish Ministers in relation to local authority finance; and must adhere to any accounting codes of practice ( Section 5 of this Guidance)

ii. HRA assets must be used to benefit present or prospective council tenants either in direct usage or as investment properties providing a financial return. If neither of these situations applies, then the assets are not benefiting the HRA and removal from the HRA should be considered ( Section 6 of this Guidance)

iii. that there is a robust, written methodology for calculating and allocating HRA costs (including internal costs charged by the Council to the HRA) in sufficient financial detail for tenants to understand why costs are being charged and who is benefiting from the services these costs relate to. This must include the allocation to the HRA of the appropriate proportion of council Trading Operation surpluses attributable to council housing activities. Furthermore, the HRA cost allocation methodology must also be updated regularly to reflect changes in legislation, statutory guidance, codes of practice, the market for HRA goods and services and any other relevant changes ( section 7 of this Guidance)

iv. in addition to the existing statutory obligations, local authorities must have clear, published mechanisms and procedures for consulting with council tenants and/or registered tenant representatives on any matters of financial transparency relating to the HRA in accordance with outcomes 2 and 3 of the Scottish Social Housing Charter ( section 8 of this Guidance)

v. to ensure that, where legally entitled, and subject to a robust proportionality test, non-council tenants living in mixed tenure areas benefiting from HRA-provided services are charged for goods and services ( section 9 of this Guidance)

Table 1: Roles and responsibilities of various stakeholders directly or indirectly involved in the operation of housing revenue accounts in Scotland

Stakeholder Type of organisation and accountability in relation to local authority housing Roles and responsibilities in relation to local authority housing revenue accounts
Local authority landlords Local government - democratically and legally accountable; financially accountable to Audit Scotland; accountable to the Scottish Housing Regulator through the Scottish Social Housing Charter. To provide property and landlord services to tenants and to account for these within the confines of the law and proper accounting practice.
Council tenants/ council tax payers Private individuals bound by their tenancy agreements and the law Tenants must pay the rent which pays for the housing services they receive and adhere to all other terms and conditions of their tenancy agreement. Council taxpayers must pay council tax in return for non-housing services
Regional Networks of Registered Tenant Organisations ( RTOs) Private individuals representing 9 Regional Networks who in turn represent 670 RTOs in Scotland all of whom must meet specific criteria for registration as laid out in the Housing (Scotland) Act 2001. To engage with local authority landlords and other stakeholders listed in this table to help improve the housing and well-being of tenants and residents in Scotland by promoting tenants' and residents' interests in housing, planning, community regeneration, the environment and community safety.
Scottish Government Central government - democratically and legally accountable to the Scottish Parliament; financially accountable to Audit Scotland. Set policies, provides funding and set the legislative framework for local authority housing and non-housing activities (under Scottish Government's devolved powers).
UK Government (UKG) Central government - democratically and legally accountable to the UK Parliament; financially accountable to the National Audit Office. Set policies, provides funding and set the legislative framework regarding the social security system and housing benefit in particular (under UKG's reserved powers).
Scottish Parliament Independent from government, accountable to the Scottish population To pass or reject legislation relating to local authority housing which is proposed by Scottish Government
Chartered Institute of Public Finance and Accountancy ( CIPFA) UK-wide organisation which is independent from local and national government, the Scottish and UK Parliaments. To provide professional and technical advice on the proper accounting practices required to prepare local authority accounts by promoting 'high standards and delivering excellence in financial management and governance across public services.
Accounts Commission Public spending watchdog for local government. Hold councils to account and help them improve. Operate impartially and independently of councils and of the Scottish Government. A panel of 6-12 members appointed using the public appointments system through open competition. They ask Audit Scotland or firms of accountants to provide a financial audit of local authority accounts (including HRAs) to check they are in line with legislation and accounting guidance.
Audit Scotland Independent from local and national government. They make sure organisations that spend public money in Scotland use it properly, efficiently and effectively. Helps the Accounts Commission to make sure that local authorities spend public money in Scotland efficiently and effectively by carrying out financial audits on its behalf. They also publish a wide range of reports on matters of public interest that are considered by the Accounts Commission and the Scottish Parliament.
Scottish Housing Regulator ( SHR) Independent from local and national government and answerable to the SHR Board and ultimately the Scottish Parliament Monitors, assesses and reports on how landlords are performing against the Charter's outcomes and standards.
Scottish Public Services Ombudsman ( SPSO) Independent from local and national government. Give an independent and impartial decision on complaints based on a statutory role in improving complaints handling by organisations under their remit. To look into complaints where a member of the public claims to have suffered injustice or hardship as a result of maladministration or service failure from public organisations in Scotland including local authorities. SPSO are the 'last resort', and look at complaints which have been through the formal complaints procedure of the organisation concerned.
Scottish Information Commissioner The Scottish Information Commissioner is a public official appointed by Her Majesty The Queen on the nomination of the Scottish Parliament. The Commissioner is responsible for enforcing and promoting Scotland's freedom of information laws. Responsible for enforcing and promoting the right to access information held by public authorities, created by the Freedom of Information (Scotland) Act 2002 ( FOISA). The Act gives anyone, anywhere in the world, important rights to access the information held by more than 10,000 public authorities in Scotland including local authorities.

Contact

Email: HRA Guidance