Independence...Integrity...Value

Accounting for Self-Financing

Briefing Paper

The purpose of this briefing paper is to examine some of the accounting issues that have arisen following the introduction of self-financing to housing revenue accounts in England.

It includes sections on:

  • Self-Financing and Treasury Management
  • Depreciation and the Major Repairs Allowance
  • Reform of Reporting
  • Explaining Self-Financing to Tenants
  • Self-Financing and Tenant Management
  • Self-Financing and the Ring Fence

On management of debt the Government and Chartered Institute of Public Finance & Accountancy proposed that local authorities operate two loans pools – one for the General Fund and one for the Housing Revenue Account. They have outlined how opening debt should be divided between these two pools before self-financing was introduced.

The treatment of depreciation is important as the major repairs allowance has been abolished with self-financing and the depreciation charge will become the sum that is transferred to the major repairs reserve to fund major repairs. Depreciation will therefore become a real cost in the housing revenue account.

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