Folkestone & Hythe Council Faces £10m Housing Repairs Backlog Despite Budget Surplus

Folkestone & Hythe District Council is under scrutiny after delaying £10 million in vital housing repairs, despite posting a major budget surplus. Tenants question where the money has gone.

Folkestone & Hythe District Council is sitting on surpluses in its council housing account for the second year running. Reserves are growing, and tenant rents are being collected as usual. But despite these promising financial headlines, a more troubling reality is unfolding for the thousands of people living in the district’s council homes: over £10 million in repairs, refurbishments, and improvements have been delayed — and many are still waiting for action.

What is the Housing Revenue Account (HRA) and Why Does It Matter?

The Housing Revenue Account, or HRA, is a legal ring-fenced fund that councils use to manage their social housing. It covers all spending and income relating to the council’s housing stock — in Folkestone & Hythe’s case, around 3,397 homes. The primary source of income is tenants’ rent, and the money cannot be used for anything outside of housing services.

The HRA pays for:

• Reactive repairs (fixing boilers, leaks, etc.)

• Planned maintenance (e.g. kitchens, insulation, windows)

• Void refurbishments (making empty homes ready for new tenants)

• New builds or purchases

• And the staff and contractors needed to manage it all

Local authorities are legally required to keep the HRA balanced. In 2023/24, Folkestone & Hythe District Council recorded a £1.861 million surplus, and in 2024/25, this grew to £3.528 million. But behind this positive picture is a stark truth: these surpluses were only possible because the council didn’t deliver much of its promised housing works.

The £10 Million That Wasn’t Spent

The council’s capital programme — the budget for big one-off projects like roof replacements and energy upgrades — was significantly underspent in both years:

• £1.941 million was left unspent in 2023/24

• A further £7.183 million went undelivered in 2024/25

Together, that’s over £9.1 million in promised works not delivered.

And it gets worse. The council is carrying forward:

• £3.022 million of this into 2024/25

• £8.663 million into 2025/26

That means nearly £11.7 million in repairs and improvements have been deferred. These delays include:

• £769,000 in Telecare safety system upgrades for older tenants — delayed in both years

• £592,000 in thermal insulation, tied to the Social Housing Decarbonisation Fund (SHDF)

• £226,000 in fire safety upgrades, still not started

• £4.8 million earmarked for 44 new homes at Risborough Barracks, delayed until at least 2025/26

The council has labelled these projects as “reprofiled” — a bureaucratic term meaning postponed. For tenants, it simply means they continue living in homes needing critical upgrades.

Rents Collected, But Not Spent on Homes

Usually, councils transfer part of their annual income — especially tenant rents — into long-term improvements through a process called the Revenue Contribution to Capital (RCC).

• In 2023/24, the council contributed £2.868 million from HRA income to capital projects

• In 2024/25, that figure dropped to zero

This drop wasn’t due to completed work, but rather because so little capital work actually happened. Instead, capital was supported by:

• Government grants

• Right-to-buy receipts

• And the Major Repairs Reserve, a fund created through accounting charges on housing assets

The council is still collecting rent from tenants — but it’s not always being reinvested quickly into their homes.

Reserves Up, Results Down

The council’s housing reserve — a financial safety net — has increased:

• From £4.64 million in 2023

• To £6.48 million in 2024

• And it was forecast to reach £6.69 million by March 2025

On paper, this is prudent financial management. But it also means money meant to improve people’s homes is sitting in a bank account — not in new windows, heating, or safety systems.

Tenants Still Waiting

The Telecare system — a digital safety alert platform for elderly tenants — has been delayed in both 2023/24 and 2024/25. Fire safety works are stuck in procurement. Insulation upgrades have fallen victim to both internal staffing shortages and the complexity of SHDF grant rules.

Documents submitted to Cabinet warn of “insufficient capacity to manage delayed expenditure alongside the new year programme” — a clear admission that even if the money exists, the council and its contractors may not have the resources to deliver.

Repairs: A Mixed Bag

While major capital works stalled, everyday repair budgets told a more erratic story:

• In 2023/24, repairs overspent by £277,000, due to disrepair claims and emergency fixes

• In 2024/25, they underspent by £273,000, likely because fewer scheduled works were carried out

Other budgets — for bad debt provision, management costs, and insurance — all came in under budget, helping inflate the reported surpluses. But again, the core issue remains: spending less does not equal delivering more.

Grants, Loans and Lost Time

The council attracted:

• £2.985 million in external housing grants in 2023/24

• £1.747 million more in 2024/25

But many of these grants — like SHDF — are time-sensitive. If projects don’t progress, future funding could be at risk.

Meanwhile, interest earnings from the council’s cash reserves dropped between the two years:

• In 2023/24, the council earned £287,000 in interest.

• In 2024/25, it overspent £188,000 on interest payments due to borrowing and lower rates.

Spotlight on Mears: £11.4 Million Spent, But What Was Delivered?

The main housing repairs contractor, Mears Ltd, has been paid:

• £5.91 million in 2023/24 — £3.68m revenue, £2.23m capital

• £5.46 million in 2024/25 — £3.42m revenue, £2.04m capital (to date)

Yet many of the projects Mears was responsible for — especially kitchen replacements, void refurbishments, and energy upgrades — have not been completed.

Despite this, in March 2025 Mears was awarded a new 10-year contract worth £60 million, with a five-year extension option.

Under the new deal, Mears is contracted to deliver:

• Responsive maintenance

• Planned capital works

• Void refurbishments

Mears also pledged:

• £25,000 in social value

• Local apprenticeships and school outreach

• Annual “Voice of the Client” tenant sessions

But the core issue remains: can the contractor — and the council — deliver?

Who’s Responsible?

• Cllr Rebecca Shoob is the Cabinet Member for Housing

• Andy Blazkowicz is the Corporate Director in charge of housing operations

Together, they oversee policy, strategy, and delivery for over 3,390 households. With surpluses climbing and delays worsening, public pressure for results is mounting.

2025/26: The Year of Reckoning

The council begins the new financial year with:

• £8.66 million in deferred capital promises

• A bigger than ever reserve

• A growing repairs backlog

• And thousands of tenants waiting for answers

Unless Folkestone & Hythe rapidly scales up its housing delivery — through staffing, better project management, or tighter oversight — it risks turning a strong financial position into a crisis of public trust.

We would be interested in hearing about your housing experiences as either a Social Housing Tenant or Private Rented Sector Tenant in the Fokestone & Hythe District Council. Email: TheShepwayVoxTeam@proton.me in confidence.

The Shepway Vox Team

The Velvet Voices of Voxatiousness