Southwark Council's Audit, Governance and Standards Committee convened on 14 July 2025, to discuss the Housing Revenue Account (HRA) Recovery Plan, a critical initiative aimed at ensuring the long-term financial stability of the council's social housing stock.

The HRA has faced considerable financial strain in recent years, prompting the council to implement a recovery strategy. As of 31 March 2024, the HRA reserves stood at £16.9m, and the council aims to increase them to a more prudent level over the medium term as part of the HRA Recovery Plan. The committee reviewed the HRA's final outturn for the 2024-25 financial year, which showed a favourable variance of £3.9m. This improvement was attributed to one-off income windfalls, corporate financing measures, and short-term cost reductions.

However, the report noted that the underlying financial position remains challenging, with a savings requirement of approximately £11.6m needed to achieve budgeted service cash limits for 2025-26. Key factors contributing to the HRA's financial difficulties include government policies, macroeconomic events and the cost of building safety. The report also mentions that cash limits were set on the basis that they maximized the available resources across front line customer-facing services wherever possible, ensuring that the quality of services provided to social housing residents is not negatively impacted.

According to the Public reports pack, the HRA Recovery Plan focuses on:

  • Setting cash limits for services.
  • Maximising capital receipts through asset sales.
  • Ceasing or postponing non-committed new build schemes.
  • Applying prudent viability criteria to new projects.
  • Maintaining and increasing HRA reserves.
  • Utilising short-term borrowing for the Asset Management capital programme.
  • Improving procurement practices.

While the HRA has seen some improvement, the council acknowledged the need for continued vigilance and strategic financial management to ensure the long-term sustainability of its social housing.

The Agenda frontsheet lists the attendees as Councillor Barrie Hargrove, Councillor Ellie Cumbo, Councillor Dora Dixon-Fyle MBE, Councillor Adam Hood, Councillor Nick Johnson, Councillor Andy Simmons and Councillor Michael Situ.

The Audit, Governance and Standards Committee will continue to monitor the HRA Recovery Plan and other key financial and governance matters to ensure the council's accountability and financial stability.