Using retained RTB receipts to buy temporary accomodation

My client is proposing to buy temporary accommodation for homeless families. The acquisition is to be financed by using 30% retained RTB receipts and the balance from General Fund borrowing. The argument is that these properties can be defined as Social Housing under Part 2 of Housing & Regeneration Act 2008. Has any other Authorities undertaken such acquisitions and if so how did they get on when the Pooling Return was audited?
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  • Hello everyone - I was interested to hear what advice people have had (if any) on the question of GF or HRA accounting in relation to this matter, I would be grateful if anyone was able to offer their views
  • In 2014 we asked CLG whether we could use 141 receipts in the housing GF to build or acquire properties to be used for temporary accommodation. Below is their response. If anyone has received a reply from CLG more recently that is contrary to the advice we received I''d appreciate you sharing it.

    CLG Response, July 2014
    "In brief and subject to the other provisions in the retention agreement, 1-4-1 expenditure may include expenditure on “low cost rental accommodation” as defined in section 69 of the Housing and Regeneration Act 2008. Accommodation fits the criteria if:

    (a) it is made available for rent,
    (b) the rent is below the market rate, and
    (c) the accommodation is made available in accordance with rules designed to ensure that it is made available to people whose needs are not adequately served by the commercial market.

    Even if temporary accommodation could be said to fit the above criteria, the intention behind the policy is that permanent accommodation “lost” under Right to Buy be replaced by equivalent accommodation. If evidence emerged that a local authority was using 1-4-1 receipts to build temporary accommodation, the Secretary of State might consider terminating the authority’s retention agreement."
  • We queried:

    We are looking at the potential of using them to support the construction of a homeless hostel by the council on some HRA land, as suitable accommodation is in very short supply, whilst the number of homeless applicants has significantly increased both this year and over the preceding years. The provision of this type of accommodation would appear to meet the definition of social housing contained within the RTB agreement, this being Section 68(1)(a) of the Housing and Regeneration Act 2008.

    CLG March 2017

    I am unable to offer any other examples of local authorities using 1-4-1 receipts in exactly the way you describe.

    You have already correctly identified the parameters within which local authorities may spend their 1-4-1 receipts (ie within the definition of s68(1)(a) of the 2008 Housing & Regeneration Act). I can only say at this point that it is for the authority to determine whether its 1-4-1 expenditure falls within that definition, subject to the scrutiny of its auditor.
  • Thanks DR. Appreciate you wanting to remain anonymous here but would you mind contacting our Housing Accountant who is interested to discuss this with you further?
  • Hi, I know that this is a couple of years on from the discussion, but I did anyone end up using 1-4-1 RtB receipts for Temp Accommodation within the General Fund? Or did anyone come up with any more ways to utilise these receipts within the 3yr window?