Cheltenham Borough Council (CBC) has balanced its books on the backs of social tenants, forcing the borough’s poorest residents to pay for financial mistakes through potential rent increases or reduced housing maintenance.

To offset deficits from a £4.7 million Minster Square overspend and a £200 million debt from the Golden Valley Cyberpark, CBC wound up Cheltenham Borough Homes (CBH), claiming £2 million in savings by cutting management roles.

The equal split of these savings—£1 million to the Housing Revenue Account (HRA) and £1 million to the general fund—lacks transparent justification and prioritises council finances over tenant welfare. The cuts caused organisational disruption, leading to a £300,000 loss from voids and a £1 million HRA reserve shortfall. CBC’s subsequent recruitment of similar management roles (Facebook, 13 Jul 2025) reveals these savings as artificial, leaving social tenants to bear the cost of the council’s mismanagement.

False Savings and Financial Motive

On 17 October 2023, CBC’s cabinet approved the dissolution of CBH, citing financial pressures and regulatory changes (Gloucestershire Live, 2 Nov 2023). The council claimed £2 million in savings by eliminating CBH management roles, but provided no clear calculations to justify this figure or the decision to split it equally between the HRA and the general fund. The £1 million diverted to the general fund appears to address deficits from significant financial errors, including a £4.7 million overspend on Minster Square and a £200 million debt from the Golden Valley Cyberpark, both incurring substantial interest costs. This suggests the in-housing was primarily a strategy to bolster council finances rather than enhance housing services.

Operational Disruption and Voids Loss

The removal of CBH management roles led to significant organisational disruption, contributing to a £300,000 loss from voids—unoccupied council properties. CBC attributed this to delays in accrediting contractors, a responsibility of the eliminated roles. The HRA reserve, targeted at £1.5 million, now holds only £500,000, with the £1 million shortfall effectively redirected to the general fund to plug financial gaps. This depletion undermines the council’s ability to maintain housing services, directly affecting social tenants.

Rehiring and the Artificial Savings

CBC’s recent job advertisement (Facebook, 13 Jul 2025) shows recruitment for demand management roles akin to those cut, indicating the initial savings were unsustainable. These roles were essential for managing voids, and their absence exacerbated the £300,000 loss. The rehiring underscores the artificial nature of the savings, as CBC now incurs costs to restore the oversight it removed, highlighting the flawed rationale behind the in-housing decision.

Impact on Social Tenants

By diverting £1 million from housing savings, CBC has placed significant pressure on the HRA, which funds property maintenance and management. This risks further rent increases—following a 7% rise in 2023—or reduced investment in social housing. Cllr Wendy Flynn (G, Hesters Way) noted “no clear benefit for tenants” and criticised the lack of consultation, while Cllr Emma Nelson (C, Leckhampton) described the staff notification process via a Microsoft Teams call on 4 October 2023 as “insensitive” (Gloucestershire Live, 2 Nov 2023). Social tenants, Cheltenham’s poorest residents, are unfairly burdened with the cost of the council’s financial mistakes.

Context of Financial Mismanagement

CBC faces a £11.36 million funding gap since 2010, worsened by rising interest rates and material costs. However, the council’s focus on high-cost projects like Minster Square and the Cyberpark has created substantial financial liabilities. Redirecting housing funds to cover these deficits prioritises short-term fiscal recovery over the welfare of social tenants.

Conclusion

CBC’s decision to wind up CBH and redirect £1 million from housing savings to the general fund reflects a strategy to offset financial mismanagement at the expense of social tenants. The artificial £2 million savings, achieved through disruptive management cuts, led to a £300,000 voids loss and a £1 million HRA reserve shortfall. The rehiring of critical roles confirms the short-sightedness of this approach. Social tenants face potential rent increases or deteriorating homes, an inequitable outcome for Cheltenham’s poorest residents.