Housing funding will be better protected from cash raids by the Treasury under the new council accounting system, it has emerged
Although the government has stressed that the new resource accounting framework will mean no new money for councils, it looks likely that the level of funding will at least be protected from 1996-style budget raids by the Treasury.

The protection arises because funding will switch from capital resources or Basic Credit Approvals - which have always been vulnerable in spending rounds - to the relative safety of revenue funding or the new Major Repairs Allowance.

Speaking at the Chartered Institute of Housing conference, London Housing Unit head Peter O'Kane said that the Department of the Environment, Transport and the Regions was using the switch to resource accounting to secure housing investment.

He said: "My understanding is that DETR are shovelling all of the BCAs into a ring-fenced revenue account, where the Treasury - the capital investor cutters - can't get at it."

In a session on resource accounting he added that the DETR were also hoping that the switch to resource accounting would help to highlight the cash needed for the housing repairs backlog.

He said: "They are setting up a debate where we have a backlog of between £10 billion and £18 billion - what are we going to do about it? DETR want that position - it will be up to us to highlight the scale of the backlog, and force the government to do something about that, because there will clearly be no BCA to deal with it."

Housing finance expert consult Graham Moody agreed: "The more it (BCA) is shovelled into the MRA, the more will be protected from predatory raiders, and the more that can be spent on investment in housing. It is good to have the DETR on the side of the angels."

Source

Housing Today