In a report to an Arun District Council housing and wellbeing committee meeting on Thursday, November 23, forecasts for the council’s housing revenue account (HRA) showed a £621,000 deficit for 2023/24 – £281,000 more than budgeted earlier this year.
This sees forecast HRA reserves at £902,000 by March 31, 2024, below the council’s self-imposed £2 million minimum threshold target.
The council’s Interim Group Head of Finance, Antony Baden, said the cost of hiring temporary agency staff to fill vacancies had increased HRA spending by £396,000.
He also noted the council’s minimum threshold was ‘high’ for its size, stating that number would probably have to be ‘revised’ in the future.
Jacky Pendleton (Con, Middleton-on-Sea) said she is ‘extremely concerned’ with the HRA’s balance, and that the council needs to take it ‘seriously’.
Simon McDougall (Lab, Pevensey) said the council was ‘one disaster away’ from an unbalanced HRA budget and effective ‘bankruptcy’.
An HRA, like the council itself, cannot go bankrupt, but if its budget is not balanced the council would have to develop an ‘action plan’ to balance it with the Department for Levelling Up, Housing and Communities, or face having its housing service taken away.
The HRA is where council housing stock revenue and spend are kept, budgeting how much is spent on maintenance and repairs and other expenses, against council housing rent from tenants, interest and other income.
Arun District Council has been forecast to run out of money in five years if savings are not found, with its £25 million in revenue reserves, expected to be spent by 2029/30.
