Unfortunately the decision relating to the ause of the OP and recoverability applies irrespective of which subsidy scheme the case comes under. Therefore in HRA cases they will simply be recompensed under the 1.7% of qualifying expenditure provision. Paul Howarth in his most recent letter suggests that the ODPM are looking at whether to make some special arrangements, and what you should do if you have already included those cases in with the Rent allowance and Non HRA RR cases.
I think either way the LA takes the hit until (if) the ODPM does something.
I suggest that all LA’s should raise this with their Housing Finance people (as early as possible)
