Helping you understand Welsh law

Local authorities

General

Local authorities have wide discretionary powers to provide housing accommodation under section 9 of the Housing Act 1985 (HA 1985).  Local authorities are not obliged to hold housing stock; a number of local authorities transferred their housing stock to RSLs, and no longer hold any stock.  Where local authorities decide to provide social housing themselves, Part 6 of the Housing Act 1996 (HA 1996) applies to the allocation of that housing accommodation.

Allocation

Section 159 of HA 1996 provides that a local authority must comply with the provisions of Part 6 of that Act when it allocates housing.  Section 167 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

Section 160A of HA 1996 provides that a local authority shall not allocate housing accommodation to certain ineligible persons.  Subsection (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 function of making regulations was originally a function of the Secretary of State but was transferred to the National Assembly for Wales in relation to Wales by the National Assembly for Wales (Transfer of Functions) Order 1999 and subsequently to the Welsh Ministers by virtue of paragraph 30 of Schedule 11 to the Government of Wales Act 2006.   In general ‘other persons from abroad’ i.e. those who are not subject to immigration control, are eligible to be allocated housing accommodation, unless they fall within a class prescribed by the Welsh Ministers as ineligible.  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.  See the section on 'homelessness'.

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 the quality of accommodation, rent for such accommodation and 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 the Welsh Ministers consider the local authority has failed, or is likely to fail to meet a standard.  The Welsh Ministers must give a warning notice which must set out certain things, including the reasons why the notice has been given and the action that needs to be taken by the authority.  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 HWA 2014. 

Consent for disposal of land

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 HA 1985) requires the consent of the Welsh Ministers (except in certain specified circumstances).  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 (or all land), or in relation to a particular house or description of house (or land) of a particular description and 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 considering 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 HA 1985).

It should be noted that there are other situations in which a local authority needs to obtain the consent of the Welsh Ministers to dispose of land in certain ways, for example section 133 of 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.).  This is not an exhaustive list, whether or not consent is required will depend on the facts of each case.

Housing finance

Part 5 of HWA 2014 makes provision for a new self-financing system, similar to that which has been operating in England since April 2012. Section 131 abolishes the subsidy payable in relation to the Housing Revenue Accounts of local housing authorities under the Local Government and Housing Act 1989. In summary, local authorities are expected to finance their housing stock from their own rents.

Section 131(3) which omits sections within Part 6 of the Local Government and Housing Act, (housing finance) dealing with the HRAS has been commenced. This effectively means that the HRAS was abolished with effect from 20th March 2019. Prior to it coming into force, local authorities entered into voluntary agreements to suspend payment of the negative Housing Revenue Account Subsidy under section 80B of the Local Government and Housing Act 1989. These agreements have now in the process of being terminated.

At the time that stock holding Welsh Authorities entered into voluntary agreements with the Welsh Ministers in relation to the Housing Revenue Accounts Subsidy (“HRAS”), Her Majesty’s Treasury also required those Local Authorities to agree to a ‘borrowing cap’ on their spending in relation to new housing stock. One clause of the voluntary agreement included a ‘Limit on Indebtedness’ to ensure Local Government borrowing was capped in relation new housing stock. In line with a change in Government policy to remove the limits of  Local Government spending on new housing stock, the Welsh Government is in the process of formally terminating the voluntary agreements, to ensure that the borrowing-caps are 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 again 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 RSLs.

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