Scottish Local Authority Housing Revenue Accounts

Briefing Paper

The Housing Revenue Account records expenditure and income relating to council houses and the provision of services to tenants. This includes management and the repair and maintenance of stock and the rent and income from other sources.

The Housing (Scotland) Act 1987 came into force on 1st April 1988. This defined what transactions should be recorded in the Housing Revenue Account

Authorities maintain Housing Revenue Account balances – made up of surpluses that have been carried forward from previous years. An authority can make a deficit in a particular year, but cannot make a cumulative deficit. The Act specifies what a local authority can charge to its Housing Revenue Account and what income can be credited there. This requirement creates the ‘ring fence’.

Local authorities produce accounts that are based on a set of accounting rules that are contained in the Statement of Recommended Practice (SORP) that is issued by the accountancy profession and that leads to accounts being prepared in a similar way to private sector bodies. This includes an ‘Income and Expenditure Account’ for the Housing Revenue Account. However, there are some differences between the requirements of the Statement of Recommended Practice and the provisions of the Housing (Scotland) Act 1987 regarding what should be credited or debited to the Housing Revenue Account.

This briefing paper explains Scottish Local Authority Housing Revenue Accounts in a way that is easily understood by the lay reader. A copy can be freely downloaded from HERE.

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