RESOURCE ACCOUNTING IN THE HOUSING REVENUE ACCOUNT
Comments from the Association of Chartered Certified Accountants
August 2002
The Association of Chartered Certified Accountants (ACCA) is pleased to have this opportunity to comment on Resource Accounting in the Housing Revenue Account (the Consultation Paper). These comments have been prepared in consultation with members of ACCA's Public Sector Technical Committee, a group of experienced accountants working in the public sector.
In November 2000, the Cabinet Office issued a Code of Practice on Written Consultation. This Code included the requirement that twelve weeks should be the standard minimum period for consultation and that the Code's criteria should be reproduced in every consultation document. The present Consultation Paper does not comply with either of these two requirements. The Consultation Paper was issued on 26 June 2002 and responses are required by 9 September 2002, a total of only 10 weeks.
According to the Consultation Paper, the Government believes that 'social rents should be fairer and less confusing for tenants'. Housing finance is notoriously complex and we do not believe that the proposals contained in the Consultation Paper will alleviate this. We believe that a strategy for reducing the complexity of government funding of social housing should be developed. The Consultation Paper's proposals should be re-considered in the light of this.
In the specific case of service charges, we consider that the benefits of greater transparency and convergence with the practice of registered social landlords should be balanced with the additional administrative cost of separately charging tenants for housing services.
For this reason we do not agree with the proposal to give authorities a steadily growing incentive to separate out services charges. Authorities should be provided with the freedom to decide whether and to which extent service charges are separated out. In addition, authorities should not be financially penalised if they do not separately charge for services which they provide their tenants.
We are surprised that bed spaces in hostels and houses of multiple occupancy are to be given a weighting of 1.0, the same as a two bedroom dwelling (Annex B of the Consultation Paper, page 24). The Guide to Social Rent Reforms (DETR March 2001) does not include such a weighting and we do not consider that this type of accommodation has greater value to tenants than bedsits or one bedroomed dwellings. It would be more appropriate for bed spaces in hostels and houses of multiple occupancy to be given a weighting of 0.7.