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HRA Reform: Seizing the Opportunities

Mark BaigentProject Director

Royal Borough of Greenwich

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HRA Reform principles• National pooling of rent income ends• Historic debt redistributed between authorities• Each local HRA becomes self-financing• Future above inflation rent increases assumed• Cost efficiencies + increased income = local surplus• Potential to borrow but subject to imposed debt ceiling• Enables 30 year business planning and more

commercial asset management portfolio approach• Local HRA still ring-fenced from General Fund• Inflation risk and investment risk managed locally

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Opportunities

• Increased condition standard for existing stock (DH+)• Retrofit energy efficiency and generation (e.g. PV)• Estate environment and security improvements• Extensions and conversions to reduce over-crowding• New build within HRA on available land assets• Estate regeneration buy-back and rehousing costs• Purchase land for future new build programme• Purchasing second hand and new build homes• Joint venture development with RPs or private partners• Providing grants/loans as incentives to tenants to move

into low cost home ownership (e.g. mortgage deposits)

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How are we seizing the opportunities• Robust 30 year view of stock investment needs• Investment options appraisal toolkit (Navigant)• Demonstrating business case and social cost/benefit• Focus on enabling wider regeneration and growth• Expanding existing new build and conversion programme• Accelerating estate renewal priorities• Exploring innovative partnership and joint venture options• Potential joint procurement between authorities

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Risks ahead

• Right To Buy “revitalisation” may stifle re-investment flexibility

• Debt ceiling fails to reflect true borrowing capacity• Debt ceilings may be further constrained unfairly• Pressure to blur the local HRA ring-fence• Political reality of assumed above inflation rent increases