London borough to lobby central government over £1.8bn Housing Revenue Account funding gap

The council’s Principal Risk Report 2024, submitted to a meeting of its Audit and Risk Committee yesterday (8 July), said this would include lobbying central government for a more favourable rent settlement.

The report said more broadly that the wider economic context “remains very challenging” for local authorities in London and beyond.

“The council has agreed a balanced budget for 2024/25 which includes savings of £10.8m, and £17.8m in total over the medium term. The estimated net budget gap for 2025/26 is approximately £31m and around £25m for 2026/27. A savings programme is in development to meet these significant challenges and to build up the reserve position to enhance financial resilience.”

The report added that continued cost of living pressures are impacting on residents and leading to ever increasing demand on council services. “The government announced a six-months extension to the Household Support Fund (HSF) in the March budget statement, which will support the council’s programme of activities to support struggling families. The number of people experiencing homelessness, or at risk of homelessness, is increasing in London, including in Islington. Nationally, there is a high level of uncertainty over the next 12 months around Government policy on cost-of-living support and funding."

The Principal Risk Report 2024 also said that significant legislative and regulatory changes are causing pressures on councils to invest resources and adapt ways of working to achieve compliance. “New inspection regimes on building safety, fire safety and for social housing landlords are being implemented,” it noted, also highlighting forthcoming new statutory requirements on public sector procurement.

“Councils are having to navigate a more complex compliance environment and need to ensure that there are adequate resources and skills in place to manage these challenges,” it added.

Harry Rodd