CHANGES to the way Thurrock Council has to pay the government from the money it receives from tenants — the Housing Revenue Account (HRA) — means it can start building new homes and speed up improvements to homes it already owns.
The council has complained for many years that it has to pay the government millions of pounds from the HRA every year.
Currently Thurrock’s figure for what is called the HRA subsidy stands at around £12 million, about £1,211 per home.
Now the government is bringing in a different option called “self-financing” which comes into effect on 1 April this year.
The government has now made a calculation for the amount each council will need to pay to close down the HRA subsidy. Thurrock’s settlement — that must be paid to the government by 28 March ― is £160.9 million.
Under the subsidy system, Thurrock would have ended up paying a minimum of £400 million over the next 30 years. Although borrowing £160.9 million will attract interest payments, they will be considerably less.
As well as reducing the amount the HRA must pay out each year, the government is also allowing Thurrock to borrow up to £20.1 million straight away (from April 1).
Cllr Andy Smith, Thurrock’s portfolio holder for housing, speaking after Wednesday (22 January) evening’s meeting of the council’s cabinet, said: “There are around 4,800 registered applicants on our housing waiting list ― although over half are single people, that figure does not include the 48 per cent who are partners or children.
“There can be no doubt that more social housing is needed here. We’ve made a start in Oxwich Close, but to deal with the backlog on the housing waiting list, we’ll need to build 200 affordable homes each year over ten years or 400 homes a year over five.
“Taking the backlog and expected extra arising needs into account, those figures basically need doubling.
“Therefore, borrowing the £20 million now, plus having to pay less in interest on the debt than in subsidy gives the council a chance to start building new affordable homes in reasonable numbers.
“In addition it will allow us to speed up the replacement and modernisation of kitchens and bathrooms for our tenants.”
