In a paper due to go to the City of London Corporation's Court of Common Council, officers warned of "serious issues with the sustainability" of the Housing Revenue Account
10:40, 15 Jan 2026
The City of London Corporation has had to request "exceptional support" from the Government to enable its housing account to complete essential repairs, it can be revealed.
The parlous state of the Housing Revenue Account's (HRA) finances meant the Corporation was at risk of failing to complete the works, which may have resulted in it breaching statutory health and safety requirements.
As such, an application was submitted with the Ministry of Housing, Communities and Local Government (MHCLG) in December requesting permission for a 'Capitalisation Direction' - meaning it can move cash from other accounts to cover the shortfall. The Government is yet to provide a response.
The Corporation has not sought money from the Government directly. Instead, it has asked for permission to shift £10 million plus contingency in capital expenditure, money typically used for long-term projects, from its City Fund to support the HRA's revenue costs for a period of four years.
A City of London Corporation spokesperson said like other councils across England it faces significant pressures on its HRA, and that the additional funding will enable it to bring down costs in the long-term "through better contract management, more efficient rent collection and reduced responsive repair costs".
All local housing authorities which own more than 200 social homes have HRAs. According to the Government website, HRAs "record expenditure and income on running a council's own housing stock and closely related services or facilities, which are provided primarily for the benefit of the council's own tenants".
They form part of an authority's General Fund but are ring-fenced, meaning money cannot be transferred in or out of the account for other uses.
The Local Democracy Reporting Service (LDRS) has previously revealed serious issues facing the Corporation's HRA primarily due to its backlog of repairs following years of underinvestment.
These include estates such as at Golden Lane, which features heavily in the hit TV series Slow Horses, and York Way in Islington. Delays to projects like Black Raven Court have also resulted in reduced income.
The LDRS reported how the union Unite had been told by Corporation officers that if its members were granted a requested 3.5 per cent pay rise then it would be forced to issue a Section 114 notice for the HRA.
Section 114s are issued when councils are unable to balance their books, and indicate they have effectively gone bankrupt.
A City of London Corporation spokesperson said at the time "sensible steps" were being taken to manage the pressures on the HRA "and ensure it remains sustainable".
In a paper due to go before the Corporation's Court of Common Council on Thursday (January 15) it is revealed that an application for Government support was submitted before Christmas.
The paper, which is not in the public domain and is instead to be discussed in private, notes how reports detailing the financial state of the HRA went to the Policy and Resources, and Finance committees in December.
It is written that the current resources within the HRA are not sufficient to cover the revenue support - in other words the day-to-day spending - required to carry out repairs to social housing stock.
"If no financial support was provided, not all necessary works required for compliance would be completed within the mandated timeframes," it continues. "This would potentially result in breaches of statutory health and safety obligations."
To meet the shortfall the Corporation in the week of December 8 applied to the Government for permission to make the transfer of funds. It is noted that if the Government grants approval this "might include conditions that the City Corporation is subject to a review of the wider governance arrangements with the view of improving financial sustainability of governance".
The Corporation's Finance Committee and Policy and Resources Committee recommended the application be submitted in December with the Town Clerk approving the plans. The paper going before the Court this week is to be noted.
A Corporation spokesperson said: "Like councils across England, we are facing significant budget pressures, including within the Housing Revenue Account. We have been open about these challenges and are taking responsible steps to keep the account sustainable.
"The additional funding now would help bring down HRA costs in the long run through better contract management, more efficient rent collection and reduced responsive repair costs.
"We have already approved a £211m programme to upgrade 2,900 homes, including new windows, kitchens and bathrooms, improved heating, lifts, roofs and communal areas.
"Over ten years, this investment will significantly improve the quality, safety and sustainability of homes across the City, Hackney, Islington, Lambeth, Lewisham, Southwark and Tower Hamlets."
In its last Court of Common Council session of 2025 the Corporation approved more than £151m to support the refurbishment of its housing estates. The funding, part of an overall 10-year, £211m package, was agreed following repeated concerns about the state of the City's relatively small number of homes.
Some have queried the extent to which the agreed funding will resolve the problems facing the City's estates.
Deputy Chris Hayward, Policy Chair at the Corporation, said following the meeting that "providing good-quality, safe homes for our residents is a fundamental responsibility, and today's decision demonstrates our absolute commitment to that duty".
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