FHDC Housing Account: Millions Unspent on Council Homes

Folkestone & Hythe District Council’s council-housing account ended 2025/26 with a much bigger reserve than expected. That’s the good news. The less comfortable news is how it got there: millions of pounds of housing capital work didn’t happen in-year, major new-build and acquisition spending slipped, and a long list of tenant-facing works now has to be carried into 2026/27.

The Housing Revenue Account, or HRA, is the council’s ring-fenced landlord account. In normal English, it’s the pot for council housing: rents come in, repairs and housing costs go out, and the money is supposed to support the council’s housing stock rather than ordinary council services. FHDC’s February 2025 HRA Budget expected the reserve to close 2025/26 at £3.237m; the provisional revenue outturn now shows it closing at £9.608m.

That larger reserve matters. It gives the HRA more protection and more room to manage future costs. But a fatter piggy bank isn’t the same as a better landlord service if some of the money is still sitting there because works, homes or acquisitions didn’t arrive when planned.

The sharpest number is in the capital programme. Capital means the big, long-term stuff: buying or building homes, major repairs, heating schemes, fire works, lifts, disabled adaptations, electrical remedials and estate improvements. FHDC’s latest approved HRA capital programme was £33.838m, but actual spend was £17.776m, leaving £16.062m unspent or slipped into the next year.

That means FHDC spent only about 52.5% of its latest approved HRA capital programme. This isn’t a tiny rounding issue. It is nearly half the live programme not being delivered in 2025/26, even though the budget was there on paper.

The biggest single delay was New Builds/Acquisitions. FHDC had a latest approved budget of £22.508m for that line, but spent £9.294m, leaving a £13.214m underspend. The appendix says the majority of the projected underspend related to interim accommodation depending on houses being available to complete before year-end, plus the re-profiling of the HRA pipeline.

That one line explains more than four-fifths of the total capital underspend. It also cuts straight across the February budget narrative, where current proposed schemes for 2025/26 included 44 units at Risborough Barracks and 26 units in Hythe, described as far above the HRA Business Plan’s 20-units-a-year minimum aim. By the outturn, the revenue appendix says the Risborough Barracks acquisition of 44 properties had been rescheduled to 2026/27.

The smaller lines are easier to miss but harder to shrug off. Carbon Improvement Works carried forward £627,000. Everist Court Remodelling carried forward £623,020. Domestic Gas Heating Improvements carried forward £256,187, Remodelling Independent Living Schemes £213,800, Telecare Digital Upgrade £195,060, and EICR Remedials/Electric Heating £153,000. EICR simply means electrical safety inspection remedials — the follow-up works needed after checks find problems.

Other carry-forwards included £102,000 for Sandgate Flats, £79,550 for Disabled Adaptations, £65,920 for Windows and Doors, £59,500 for External Enveloping, £47,027 for Re-roofing, £44,000 for Passenger Lift Improvements, £42,000 for Fire Protection Works, and £21,792 for New Paths. Disabled adaptations are the changes people need to live safely in their homes; fire protection works and lift safety works don’t need much translation.

Revenue also improved, but again the reason matters. FHDC’s HRA income was £442k worse than the latest approved budget, mainly because dwelling rents were £378k lower after an over-estimate during budget-setting and the rescheduling of the 44 Risborough Barracks properties. Non-dwelling rents, mainly garages, were also £60k below budget because fewer garages were occupied.

Spending fell much further. Total HRA expenditure was budgeted at £18.161m and came in at £15.485m, a £2.676m underspend. Repairs and maintenance alone were £1.562m below budget, with planned maintenance, Mears, void repairs, right-to-buy flats communal balances, insurance claims, rechargeable works and asbestos removal all listed in the breakdown.

There was also no revenue contribution to capital, despite £1.169m being budgeted. That means money expected to move from the day-to-day HRA account into the capital programme didn’t need to go, because the capital programme was reviewed and financed differently after the spending slipped. That helps the reserve, but it also confirms the same basic point: the account looks better partly because work moved out of the year.

FHDC is asking to carry forward £388,376 of revenue budget and £15,743,856 of capital budget. A carry-forward is council-speak for rolling unspent budget into the next year, rather than treating it as gone. That is not automatically bad, but it does mean residents didn’t get the full 2025/26 programme in 2025/26.

There is also a small but untidy numbers issue. The main report recommendation refers to £15.769m of capital carry-forward, while Appendix 3 totals £15,743,856, or about £15.744m. The difference is only about £25k, but in a forensic budget paper councillors shouldn’t have to guess which figure is right.

FHDC does have one strong achievement to point to. Its Social Housing Decarbonisation Fund project was awarded £2.591m of grant, had a combined project budget of about £5.182m, completed works to 338 homes, beat the original 300-home target by 38 homes, and finished with final spend of £5,181,814, just £186 under budget. That’s real delivery.

The forensic conclusion isn’t that the HRA is broke. It plainly isn’t. The council-housing reserve is far stronger than the original budget expected, borrowing need was lower than planned, and some grant-funded decarbonisation work was delivered well.

But tenants don’t live inside reserve balances. They live with windows, roofs, heating, electrics, lifts, paths, adaptations, fire doors and homes that either arrive or don’t. FHDC’s HRA piggy bank got fatter in 2025/26, but £16.062m of its latest approved capital programme didn’t get spent, and £15.744m is now being pushed into 2026/27.

The question for councillors is therefore simple enough. Is this a one-year timing problem, with delayed work now ready to land, or is it a delivery problem dressed up as a healthier balance sheet? The answer won’t be found in the reserve figure; it’ll be found in whether FHDC actually spends the carried-forward money and gets the work done for tenants living in its council-owned homes.

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The Shepway Vox Team

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