Local authorities

Local authorities in Wales have wide discretionary powers to provide housing accommodation under section 9 of the Housing Act 1985 (HA 1985). They are not obliged to hold housing stock and as a result a number of local authorities transferred their housing stock to Registered Social Landlords (“RSLs”). Where local authorities decide to provide social housing themselves, Part 6 of the Housing Act 1996 (HA 1996) applies.

Allocation

Section 159 of the HA 1996 provides that a local authority must comply with the provisions of Part 6 of that Act when it allocates housing.

Section 167 of the HA 1996 provides that each local authority shall have an allocations scheme in accordance with which housing accommodation is to be allocated. The Welsh Ministers also issued statutory guidance under section 169 in March 2016 titled the ‘Code of Guidance for Local Authorities on Allocation of Accommodation and Homelessness'. Local authorities must have regard to this Code of Guidance in the exercise of their functions under Part 6 of HA 1996.

The Code of Guidance can be accessed on the Welsh Government’s website.

Eligibility

When considering an application for the allocation of accommodation a local authority must decide if the applicant is eligible. Section 160A of the HA 1996 provides that a local authority shall not allocate housing to:

• (a)    a person from abroad who is ineligible for an allocation of housing accommodation by virtue of subsection (3) or (5), these being:
  • a person subject to immigration control within the meaning of the Asylum and Immigration Act 1996;
  • and other classes of persons from abroad who are ineligible for allocation of housing as the Secretary of State may by regulations prescribe
• (b)    to a person who the authority have decided is to be treated as ineligible for such an allocation by virtue of subsection (7), being;
  • a person guilty of unacceptable behaviour serious enough to make them unsuitable to be a tenant of the authority; and
  • in the circumstances at the time the application is considered they are unsuitable to be a tenant of the authority by reason of their behaviour
• (c)     to two or more persons jointly if any of them is a person mentioned in paragraph (a) or (b)

Section 160A(3) provides that a person subject to immigration control is not eligible to be allocated housing accommodation unless they fall within a class prescribed by the Welsh Ministers as eligible in regulations. The Allocation of Housing and Homelessness (Eligibility) (Wales) Regulations 2014 are the applicable regulations in Wales.

Part 7 of HA 1996 no longer applies in Wales. Part 2 of the Housing (Wales) Act 2014 deals with homelessness  and places a duty on local authorities to house certain people.  

The Code of Guidance also provides guidance in relation to eligibility.   

Standards

Part 4 of the Housing (Wales) Act 2014 (HWA 2014) confers powers on the Welsh Ministers to set standards to be met by local authorities in connection with;

1. the quality of accommodation
2. rent for such accommodation; and
3. service charges for such accommodation.

The Welsh Ministers may issue guidance in relation to these standards. There are also certain powers of intervention available to the Welsh Ministers where they consider a local authority has failed or is likely to fail to meet a standard. They must give a warning notice setting the following:

• (a) the reasons why they are satisfied that the grounds exist
• (b) the action they require the authority to take to deal with the grounds for intervention
• (c) the period within which the action is to be taken by the authority
• (d) the action they are minded to take if the authority fails to take the required action

Where a local authority has not complied with the warning notice the available intervention powers of the Welsh Ministers are set out in Sections 120 to 125 of the HWA 2014. 

Consent for disposal of land

There are various sections of the HA 1996 that apply in relation to a disposal of land.

1. Section 32 of HA 1985 provides that the disposal of land by a local authority which is held for housing purposes (under Part 2 of the HA 1985) requires the consent of the Welsh Ministers (except in certain specified circumstances). 
2. Section 43 of HA 1985 also provides that the consent of the Welsh Ministers is required for the disposal of land which is not held for housing purposes, but which is let on a secure or introductory tenancy, or where a lease has been granted as a result of the right to buy.

Consent under sections 32 or 43 may be granted either generally in relation to all houses and land. Consent may be given subject to such conditions as the Welsh Ministers consider appropriate.

There are certain specified statutory considerations that should be taken into account when deciding whether or not to grant consent under these sections, and whether or not to apply conditions to that consent (see Sections 34 and 43 of the HA 1985).

There are also other situations where a local authority needs to obtain the consent of the Welsh Ministers to dispose of land in certain ways, for example section 133 of the HA 1988 (consent required for certain subsequent disposals) and section 25 of the Local Government Act 1988 (consent required for provision of financial assistance etc). Whether or not consent is required will depend on the facts of each case.

Housing finance

Up until 2015, eleven Welsh landlord authorities operated within a centralised Housing Revenue Accounts Subsidy (“HRAS”) system. 

The Welsh Government reached an agreement in March 2015 to allow all Council’s with housing stock in Wales to leave the system and Councils would instead become responsible for self-financing. 

Part 5 of the Housing Wales Act 2014 (“HWA 2014”) provides for a self-financing system for local authorities. Section 131 abolished the subsidy payable in relation to the Housing Revenue Accounts of local housing authorities under the Local Government and Housing Act 1989. Local authorities are expected to finance their housing stock from their own rents.

The Housing Revenue Account Subsidy was abolished with effect from 20th March 2019 in Wales and voluntary agreements entered into by local authorities have, or are in the process of, being terminated.  

Local Authorities were historically required to agree to a ‘borrowing cap’ on their spending in relation to new housing stock. In 2019, the borrowing-cap was lifted.

The duty facing a local housing authority to keep a “Housing Revenue Account” under section 74 of the Local Government and Housing Act 1989 is retained. The account will contain financial information in respect of houses or buildings provided, land acquired, houses purchased, and other matters listed in section 74(1). Section 76 places a duty on a local housing authority to ensure that the account for the year does not show a debit balance. Schedule 4 to that Act deals with the keeping of the Account.

Additionally, a local housing authority may keep a Housing Repairs Account. If they are required to keep a Housing Revenue Account (section 77). The authority must ensure that sufficient credits are carried to the account to secure that no debit balance is shown in the account for any year (section 77(4)).

Public law challenge

The decisions of public bodies are subject to public law challenge by way of judicial review. 

It should also be noted that the Public Services Ombudsman for Wales considers complaints in respect of local authorities and Registered Social Landlords.