The City of London Corporation has been forced to ask the Government for 'exceptional support' to prevent its housing account from failing to carry out essential repairs on its estates, a move that could have led to breaches of health and safety laws.
A Financial Crisis in Social Housing
In a confidential paper set to go before the Corporation's Court of Common Council, officers revealed the Housing Revenue Account (HRA) faces "serious issues with sustainability". The dire financial situation meant the local authority risked being unable to complete necessary works on its social housing stock, which includes estates like Golden Lane – featured in the TV series Slow Horses – and York Way in Islington.
To avert this, the Corporation submitted an application to the Ministry of Housing, Communities and Local Government (MHCLG) in December 2025. It is seeking permission for a 'Capitalisation Direction', which would allow it to move money from its general City Fund to prop up the HRA. The requested amount is £10 million plus a contingency to cover revenue costs over four years.
The Risk of Statutory Breaches and Bankruptcy
The internal document starkly warned that without this financial support, "not all necessary works required for compliance would be completed within the mandated timeframes". This "would potentially result in breaches of statutory health and safety obligations" for the council.
The financial pressures on the HRA are severe. The Local Democracy Reporting Service (LDRS) previously revealed that the backlog stems from years of underinvestment. Furthermore, the Corporation told the Unite union that granting a requested 3.5% pay rise to staff could force it to issue a Section 114 notice for the HRA – effectively declaring it bankrupt.
Long-Term Plans and Government Scrutiny
A spokesperson for the City of London Corporation stated that, like councils across England, it faces significant HRA pressures. They argued the additional funding would enable long-term cost savings through better contract management, more efficient rent collection, and reduced repair costs.
The Corporation has already approved a massive £211 million, 10-year programme to upgrade 2,900 homes across several boroughs, with over £151m agreed in late 2025. However, some have questioned whether this funding will fully resolve the deep-seated issues.
The Government's response to the capitalisation request is still pending. Approval might come with conditions, potentially including a review of the Corporation's wider governance to improve financial sustainability. The Corporation's Finance and Policy and Resources committees recommended the application, which was approved by the Town Clerk.
