Islington Council is facing a deficit ‘in excess of’ £1.8bn in its housing revenue account (HRA) over the next 30 years.

In its principal risk report for 2024, the London borough council said its HRA was under ‘significant pressure’.

Islington blamed government controls on rent setting for taking £1.7bn out of its 30-year HRA business plan, and ‘revenue and capital pressures’ for the remainder of the deficit.

The business plan says the council faces ‘a significant shortfall between our desired level of sound investment and the resources available’.

It says the need to spend money on new safety requirements for tall buildings and on making homes more energy efficient would increase the ‘challenge of providing services on a tight budget’.

The plan also sets out other pressures that have not yet been accounted for, including on the council's responsive repairs service as it attempts to tackle damp and mould.

Islington said it was working out how to improve its HRA position, and would lobby the government ‘for a more favourable rent settlement’.

The housing deficit was identified within the wider risk of the council’s financial resilience, with Islington facing a net budget gap of £31m for 2025-26 and £25m for 2026-27.

Executive member for homes and neighbourhoods Una O'Halloran said: ‘The Department for Levelling Up, Housing and Communities introduced measures in recent years to reduce and cap the amount that renters pay, meaning the revenue that councils receive does not keep up with inflation.

‘This inevitably means that HRAs for councils across the country have seen a reduction in expected income, which reduces our ability to carry out important investment and maintenance work, including tackling damp and mould and keeping homes in good condition.

‘We will continue to lobby the Government for a mechanism to recover this money so that we have the resources required to provide our tenants with decent, high-quality homes.’