Two-thirds of council housing budgets on “brink of collapse”, report warns
Two-thirds of councils have reported a risk of being unable to set a balanced housing budget by the next general election, according to new research by Southwark Council.
In a survey of 76 stock-owning local authorities, nearly half of councils told Southwark they have been forced to use their reserves - funds meant to cover emergencies - to cover day to day spending, with more than a third reporting that they would “empty” these funds by the end of this parliament.
Overall, the study found 9 in 10 council housing budgets under financial stress, with councils taking or expecting to take “substantial action” or use emergency funds to balance their books by 2029.
The survey revealed 61% of councils have already cancelled, paused or delayed housebuilding projects and more than one third have cut back on repairs and maintenance of council homes.
Meanwhile, councils also reported being in discussions with government about exceptional financial support, with fears they would soon be “unable to meet even their statutory obligations”, the report noted.
Cllr Kieron Williams, Leader of Southwark Council, said: “The government’s ambition to build 1.5 million new homes is critical to ending the housing crisis and council housing must play a central role in this effort. However, without significant further action councils will be unable to build at scale and unable to bring existing homes up to green and decent standards fit for the future.
“[…] Like many councils, we have had to pause our ambitious home building programme on a number of sites and our Housing Revenue Account is now under intense strain. The upcoming Government Housing Strategy presents a major opportunity to give council landlords the headroom and the confidence to invest in the homes our country needs – addressing the scourge of homelessness and unlocking growth, jobs and security across the country.”
Responding to the report, a Ministry of Housing, Communities & Local Government spokesperson said: “This government will deliver 1.5 million homes as part of our Plan for Change including the biggest social housing boost in a generation, and we will work with councils to achieve this.
“We know that local government has suffered from years of short-term decisions, which is why we have already set out important steps to help them deliver the homes we need.
“That includes overdue reforms to the Right to Buy scheme and an extra £500 million for the Affordable Homes Programme, and we will soon set out further measures.”
Lottie Winson
