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Proposed Capital Finance Arrangements under the New Housing Finance S

March 2011

Communities & Local Government published a paper: ‘Implementing Self- Financing for Council Housing’ on 1stFebruary 2011. This paper contains the coalition government’s detailedproposals for the introduction of self-financing to the Housing Revenue Accountand follows papers issued by the former Labour government.

At the same time the Chartered Institute of Public Finance & Accountancy published a ‘Consultation onProposed Capital Finance Arrangements under the New Housing Finance system’.This consultation paper relates to the proposals for the management of debt anddepreciation under the new arrangements which is also discussed in this paper.

On management of debt the paperproposes that local authorities operate two loans pools in future – one for theGeneral Fund and one for the Housing Revenue Account. It outlines how openingdebt should be divided between these two pools before self-financing is introduced.

The proposals contained in theconsultation paper on management of debt appear to represent the most practicalway forward in the current circumstances. They also allow authorities to adoptan alternative approach if they consider that this would be best in view of thelocal circumstances.

For full briefing paper please click here.

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