Tower Hamlets Council has predicted an overspend of almost £4m on its housing budget due to soaring gas and electricity bills.

The authority has forecast its Housing Revenue Account (HRA) will record an overspend of £3.9m for the year 2022/23 with £2.6m of that amount due to be spent on the spiralling cost of gas and electricity.

A total of £400,000 of this is expected to be spent on the council paying Tower Hamlets Homes (THH) a management fee. THH operates as a housing service and manages some 21,000 social homes for Tower Hamlets Council.

Though the council confirmed in a document that the £3.9m extra will be transferred from the general HRA balances at year-end, the council is looking to bring its housing services back in-house.

It comes on the back of August, when the mayor announced he was bringing the council’s leisure facilities back in-house and has invested £35m into the service. The council has a management agreement with THH until March 2024, though a public consultation has already begun.

THH has been in charge of repairs in council homes and maintenance for the borough’s housing estates since 2008 and is paid a fee by the council to

Tower Hamlets mayor, Lutfur Rahman has pledged to deliver a minimum of 1,000 social homes for rent each year in an attempt to address the housing crisis and overcrowding.

The mayor’s plans are mentioned in a council document: “The mayor is committed to deliver 1,000 social homes per annum. 1,312 net additions to the housing stock have been progressed so far this year. 818 affordable homes have been consented via the planning system for future delivery and 394 affordable homes have been delivered.”

As of October 2021, there were more than 21,000 households on the council’s housing register.