Huge rise in spending on Arun's housing stock questioned

Millions more has been spent on Arun District Council’s housing stock than originally anticipated in February, according to an update given to the Housing and Wellbeing Committee on Tuesday (6 December).

It’s a legal requirement for councils to balance their housing budgets but councillors heard that the Housing Revenue Account (HRA) – a ring-fenced account for housing expenditure and income – would go ‘below a critical balance’ by the end of March 2023 without ‘corrective action’.

In a report, chief financial officer Carolin Martlew said the situation had ‘deteriorated’ since the start of the financial year.

Spending is forecast to be £1.67 million more than when the budget was agreed in February.

A deficit of £1.39 million was predicted but this is now expected to reach £3.29 million.

This has taken a hit on reserves and the HRA balance is now expected to drop to £601,000.

Key factors include the costs of a new housing IT system tripling from £600,000 to £1.82 million. It will now be financed through other sources to reduce pressure on the housing budget by £933,000.

Income is £224,000 less than expected, with £227,000 less rent collected than anticipated.

Repairs could come in more than £2 million over budget.

Supervising and management has come in £600,000 overbudget which could be down to a ‘higher proportion’ of agency staff than in other departments.

Council leader Shaun Gunner said: “Between [councillors] signing off the budget in February and the beginning of the financial year, £1.1 million pounds went. I want to know where that went.

“Why was our budgeting so far off at the time because that isn’t just inflation? At the time we knew there would be inflation. We didn’t think it would be as high as it now is, but we knew there would be some inflation.”

Officers explained that there are a number of factors behind the overspend but added that the figures ‘will be subject to review’.

Ms Martlew said rental income was not necessarily down to non-payment but because of new properties waiting ‘come on stream’. She said the £1.1 million gap mentioned by Mr Gunner could be down to an overspend in the previous financial year.