Islington Council is facing budget challenges due to overspending in its Housing Revenue Account (HRA), primarily driven by the increasing costs associated with tackling damp and mould in council dwellings and a rise in housing disrepair claims. The Corporate Resources and Economy Scrutiny Committee addressed the issue at its meeting on 9 October 2025, as part of a broader review of the council's financial strategy.
The HRA, which is responsible for managing the council's housing stock, is forecasting an in-year deficit of £6.516m. As the HRA is a ringfenced account, any deficit at the end of the financial year will be transferred from HRA reserves. A significant portion of this deficit is attributed to a £2.436m pressure arising from the need to tackle damp and mould in dwellings, as well as a £3.032m pressure due to elevated levels of housing disrepair claims.
The Revenue Budget Monitoring report, which was part of the public reports pack presented to the committee, highlighted these financial strains.
While the General Fund revenue budget was forecast to overspend, the HRA's deficit is of particular concern due to its ringfenced nature. Any deficit in the HRA must be covered by its reserves.
To address the financial pressures in the HRA, a virement of £1.250m from the HRA contingency budget was proposed. According to the report for the Corporate Resources and Economy Scrutiny Committee meeting on October 9, 2025, this budget adjustment will initially be covered from HRA reserves, given its one-off nature. This would increase budgets for Damp and Mould by £1.021m and increase the budget for HRA complaints by £0.229m to support with funding the additional resource requirements. The report also provided an update on the progress of the Delivery Plan, including performance against its metrics and strategic missions.
