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Homes and Communities Agency

27 August 2008

On the day Parliament rose for its summer recess on 22 July 2008, the long awaited Housing and Regeneration Act 2008 (HRA) received Royal Assent. The HRA has been billed as the most significant change in the funding and regulation of housing associations for many years.

The HRA paves the way for the Homes and Communities Agency (HCA) to come into existence in December 2008.

The HRA brings together under one umbrella - the HCA - the grant funding powers of the housing corporation, the functions of English Partnerships and the decent homes functions of communities and local government so that stock transfers, housing market renewal and PFIs will all be dealt with by the HCA. It is hoped that by bringing together responsibility for land and the money under one agency this will streamline funding and enable more effective use of assets and resources.

Under the HRA, the housing corporation will eventually be dissolved and housing associations will be grant funded in the future through the HCA and regulated through the Tenants Service Authority (formerly called the Office for Tenants and Social Landlords (Oftenant) - read our previous bulletin on Oftenant).

One of the HCAs key objectives is to support the delivery of the Governments new homes target by 2020, and to secure 180,000 new affordable homes by 2011. However, the HCAs remit is far wider-reaching than simply the provision of housing. The HRA sets out four statutory objectives for the HCA:

  • To improve the supply and quality of housing in England
  • To secure the regeneration or development of land or infrastructure in England
  • To support the creation, regeneration or development of communities in England or their continued well-being
  • To contribute to the achievement of sustainable development and good design in England (this last object was included following the intense scrutiny the HRA received whilst passing through Parliament)

all with a view to meeting the needs of people living in England. "Needs" is not limited to either present needs or housing and so may include social, economic or health needs.

In order to meet these objects the HCA has been given a general power to do anything that it considers appropriate for the purposes of achieving them, together with a wide variety of specific powers, including powers to:

  • Provide housing or other land
  • Regenerate or develop land
  • Acquire, construct, convert, improve or repair infrastructure such as water, electricity, gas, transport and business facilities
  • Acquire land, either by agreement or (if authorised by the Secretary of State) compulsorily
  • Provide such services for communities as it considers appropriate

Communities and local government have also indicated that the HCA and Tenants Service Authority will provide a platform to help deliver the Governments plans to reform rented housing, to be set out in the housing reform green paper later this year.

The HRA will also rewrite the rules on financing new council housing, helping councils to build new social homes in their areas where it offers value for money. Councils will be able to keep the full rents from new council houses and use any surpluses to help pay for new social homes.

The Chartered Institute of Housing and the National Housing Federation are both in favour of the HRA. This followed the dilution of many of the provisions including the addition of the requirement that the HCA should contribute financially to the good design of new homes and clauses have been added obliging the HCA to consult with local government on projects.

A very limited number of sections of the HRA will come into force on 22 September 2008 (for example, new provisions in respect of the exclusion of the right to buy are inserted into the Housing Act 1985) However, the vast majority will be brought into force by order of the Secretary of State. We will keep you up to date as the transitional arrangements become clearer over the coming months.

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