Housing Revenue Account 'Health Checks'

AWICS has developed a methodology for carrying out a ‘health check’ of a local authority housing revenue account. It is often useful to carry out a ‘health check’ as part of preparing or reviewing a business plan. This ‘health check’ can be applied in England, Scotland or Wales as it recognises the differences in approach in each country.

A ‘health check’ of the housing revenue account can include all or any of the following elements:

• Reviewing the housing revenue account and business plan as it currently stands and in the light of recent changes to government policy and other external factors (including in England the reinvigoration of ‘right to buy’, 1% annual rent reduction, sales of high value council homes, near market rents for tenants with high incomes, welfare reform and devolution) and demographic change.
• Checking that the budgets and business plan reflect actual expenditure and income.
• Considering the financial strategy, data and assumptions that underpin the budget and business plan and advising on how robust these are in the light of self-financing.
• Carrying out sensitivity analysis to identify which variables would be likely to have a significant effect on the viability of the business plan thus identifying the risks involved in the plan and suggesting strategies to mitigate those risks.
• Identifying changes that result from the introduction of self-financing including those affecting treasury management and advising on the implications for the business plan.
• Considering Value for Money issues including benchmarking with other local authorities and registered social landlords and identifying areas where value for money gains could be made.
• Reviewing governance arrangements, following the Chartered Institute of Public Finance & Accountancy and Chartered Institute of Housing voluntary code of guidance on the Housing Revenue Account; including reviewing the support and service arrangements, defining where gaps may exist.
• Considering the major variables including: Rents, including future rent increases and levels of collection in the light of welfare reform and the level of current rents; Expenditure, including management, maintenance and major repairs; Rates of interest; Changes in stock levels including right to buy, other disposals and demolitions and new build; How capital investment in new and existing stock is to be financed; Accounting for Depreciation and Major Repairs; Treasury Management implications.

At the conclusion of the ‘health check’, we provide clients with a report containing a comprehensive analysis and practical recommendations including:

• Providing a position paper that identifies strengths, weaknesses, opportunities and threats; identifies possible future options for the Council including improvements to the service, new build, community investment and supporting wider regeneration objectives.
• Recommendations to improve the alignment between the business plan, the council’s housing service the council’s corporate objectives and the political, environmental, social and technological environment.

Clients for whom we have recently provided housing revenue account ‘health checks’ include:

• Ashfield District Council
• Denbighshire County Council
• Enfield Borough Council
• Nuneaton & Bedworth Borough Council
• Oldham Borough Council
• Slough Borough Council
• South Derbyshire District Council
• Warrington Borough Council

To download a copy of our brochure on housing revenue account business plans and 'health checks' please click HERE

For further information about our Housing Revenue Account ‘health check’ please contact Adrian Waite at Adrian.waite@awics.co.uk or 017683-51498

AWICS is a Management Consultancy and Training Business that specialises in providing support to those who provide public services.

Our mission statement is: 'Independence, Integrity, Value...'

We have been adding value to clients' businesses and services since 1998.

To contact AWICS please:

Email: enquiries@awics.co.uk 

Telephone 017683 30159 or

Visit our contact page by clicking HERE

Other Information about Local Authority Housing Finance

For information about our seminar: 'All You Want to Know about Local Authority Housing Finance' please click HERE

For information about our seminar: 'Developments in Local Authority Housing Finance in England' please click HERE

For information about in-house training in housing finance, please click HERE

For information about management consulting advice and assistance for local authority housing, please click HERE

For information about our publications on housing finance, please click HERE

To download copies of the 'AWICS Housing News' newsletter, please click HERE

To download copies of our briefing papers on local authority housing finance, please click HERE