Southwark Housing to Face More Cuts as £10 million Overspend Projected

Southwark Housing to Face More Cuts as £10 million Overspend Projected 

• Overspend of £9.5 million in Housing Revenue Account projected for 2024-2025  

• Reserves currently stand at just £15 million 

• Liberal Democrats warn that further cuts risk plunging “failing” department into crisis 

Council reports have warned that the already creaking housing department could see even more cuts to essential services. Due to the “high risk” of failing to meet the planned savings meant to balance the budget, a £9.5 million overspend is now forecast. 

HRA reserves, already depleted to balance the 2023-2024 budget, now stand at just £15 million. If savings are not met, this would put the account perilously close to effective bankruptcy. London Councils recently reported on the “black hole” in social housing finances, saying that councils running out of HRA reserves was “unprecedented”. 

The reports, which came to Cabinet on Monday, warn that due to the existing planned savings potentially not being made, even further cuts to resident services and repairs services need to be planned. 

Already, major new housing schemes were scrapped to plug funding gaps. The council had also announced a new repairs improvement plan, but resourcing had yet to be identified to implement it – the Liberal Democrats are warning that the repairs crisis is now certain to only get worse. 

Commenting, Southwark Liberal Democrat Housing Spokesperson Cllr Emily Tester said:  

“The funding crisis could plunge our already failing housing department into further peril, or even potential bankruptcy, and it’s residents who will suffer. This has Labour’s fingerprints all over it. They run the council, and now have responsibility in national government to plug funding gaps. With major works and district heating scandals already looming large, and damp and mould endemic across the borough, it’s difficult to see how things can get better with finances on such a knife edge”