Commentary on Sections Schedule 7: Minor and consequential amendments: paragraph 81 Section 89: Housing Revenue Account subsidy: payment and calculation
233.Under the Act, rent rebates will be removed from the Housing Revenue Account (HRA) from April 2004 and will be met by rent rebate subsidy payable under the Social Security Administration Act 1992 (see the amendments made to that Act by Schedule 7 to the Act). This section amends sections 79 and 80 of the Local Government and Housing Act 1989 (“the 1989 Act”), in relation to the continued calculation and payment of HRA subsidy in respect of the remaining costs falling on the HRA.
234.The section substitutes a new section 79(2) of the 1989 Act. The new subsection confirms that payment of HRA subsidy may be made subject to conditions, including conditions as to the supply of HRA business plans (see section 88), determined by the Secretary of State or the National Assembly for Wales. The new section 79(2) refers to the “appropriate person”. For England this is the Secretary of State and for Wales this is the National Assembly for Wales. See the amendment made by subsection (6) of the section.
235.The section amends section 80 of the 1989 Act so that HRA subsidy may be calculated in such manner as the Secretary of State or the Assembly may determine rather than in accordance with formulae. Such a determination may, among other things, provide that all or part of the amount is to be calculated in accordance with formulae, or that any part which is not so calculated may be calculated by reference, for example, to an assessment of the authority’s HRA business plan, the authority’s discharge of its housing functions or such other matters as the Secretary of State or the Assembly may determine. This will provide greater flexibility in calculating the amount of HRA subsidy payable to authorities. It for example, allows the Secretary of State and the Assembly to target additional subsidy to authorities which provide better services to their tenants, perhaps by establishing arm’s length housing management organisations
236.The amendments in section 80 of the 1989 Act also provide that calculations may be made on the basis of information received on or before such date as the Secretary of State/the Assembly may specify, and on the basis of assumptions. This ensures that there can be certainty about the amounts of subsidy for a year, and that any delay by authorities in supplying the required information need not delay the subsidy calculations, which could affect authorities’ budget setting processes.