Council won’t evict tenants who don’t pay rent, but borrows £429m assuming they will

Wandsworth Council will “very, very rarely” evict tenants who don’t pay rent – a policy that undermines the financial assumptions behind £429 million in planned borrowing – even as the authority burns through reserves at £28 million per year and faces a mounting financial crisis.

The policy was revealed by Cabinet Member for Housing Aydin Dikerdem, who told a committee last month the council tries “not to talk about this too much in public” because of “incentive structures.”

Budget figures published this week show current rent arrears stand at £18 million, which are nearly triple the £6-7 million bad debt provision in the council’s borrowing plan, and are rising by £2 million annually.

The council extends payment periods based on tenant “affordability” rather than enforcing collection, yet the Housing Revenue Account business plan assumes £137.5 million in annual rent income to support the massive borrowing programme.

The policy revelation comes as the council already faces mounting financial pressure. General Fund reserves collapsed from £194 million to £166 million in a single year. £28 million gone, with £12 million simply plugging the gap between income and spending.

Four months before revealing the rent arrears policy, Cllr Dikerdem argued it “doesn’t make sense to sit on reserves” while approving a £424 million capital programme, even though his department was responsible for over 90% of the council’s £17.4 million budget crisis, with the Housing Revenue Account £15.7 million overspent. He was arguing against saving reserves while both the General Fund and his own HRA were in financial crisis.

From secret policy to public boast

Dikerdem first revealed the non-eviction policy at a Housing Committee meeting on 21 January 2026, prefacing it with: “To be frank, we try not to talk about this too much in public because of the incentive structures.” He explained that it is “very, very rare that we would ever evict someone because of rent arrears,” with evictions only happening in “very obvious and chronic” cases where someone is “basically refusing to pay rent even with multiple different offers of payment plans, supports, credit unions, support, all those kinds of things.”

He told the committee that “arrears going up shows that we’re not just evicting people when they have arrears. We have longer term payment periods. We extend it to what people can actually afford.”

Days later at the 26 January Cabinet meeting, he softened the language: “No tenant should feel fear of their home. We have a very, very kind of supportive rent engagement team that will support anyone if they find this difficult.”

By the 4 February full Council meeting, Leader Simon Hogg was describing the approach as having “one of the most generous and compassionate rent repayment offers in London.” What started as an admission the council preferred to keep quiet became, within weeks, a public boast, even as the financial assumptions underpinning £429 million in borrowing remained unchanged.

There is a risk of over-reliance on future projected surpluses which could throw the HRA business plan out of balance and necessitate additional borrowing

HRA Budget Paper (Paper 26-7) from 26 January Cabinet meeting

The reserves argument

Just weeks before the September Cabinet meeting where Dikerdem would argue against “sitting on reserves,” the council had revealed General Fund reserves collapsed from £194 million to £166 million in the 2024/25 financial year. £28 million gone in twelve months. Of that, £12 million was simply plugging the gap between income and spending. Putney.news reported in October 2025 that at this burn rate, “the safety net gets thinner every year,” with the council’s own budget documents admitting reserves “buy time but don’t solve structural imbalances.”

Against this backdrop, Dikerdem told the 22 September 2025 Cabinet meeting that approved a £424 million capital programme and £1.9 million from the financial resilience reserve for a “transformation programme”: “You’ve got to spend money on infrastructure so that you’re not plugging gaps later on and it doesn’t make sense to sit on reserves without improving the foundational infrastructure of our borough.”

At that moment, his department was £15.7 million overspent, homelessness had jumped from 1,414 to 1,692, first-time temporary accommodation admissions from 424 to 478, and repair costs were soaring due to inflation and new building safety regulations: all things that should have given pause on new spending plans.

The borrowing plan assumptions

The HRA budget paper presented to Cabinet on 26 January 2026 (five days after Dikerdem’s Housing Committee revelation) shows the council planning £429 million in new borrowing over the next four years:

Year	New Borrowing
2025/26	£44.860m
2026/27	£108.186m
2027/28 onwards	Balance of programme
Total over 4 years	£429m

The paper states that a core assumption in being able to borrow the money is growing income from council tenants: “As these schemes generate new supply, which in turn generates revenue income, it is reasonable to assume that the balance is funded by additional borrowing with the revenue cost of that new borrowing supported by the additional revenue income.”

Total rental income forecast for the HRA in 2025/26 is £137.5 million with, approximately £32 million a direct transfer from the council’s Housing Benefit system.

Bad Debt Provisions	Amount
2025/26	£6.272m
2026/27	£7.170m
Current actual arrears	£18m
Gap	£11-12m

The paper notes the growing problem of bad debt but it was not something noted or commented on by the administration, with the issue was pushed out to year end: “Predominantly this increase is in response to the increasing levels of rent arrears (including heating and hot water and tenants’ service charge arrears) within the HRA above that normally arising as a consequence of the collection rate target for which a prudent provision for bad debts will need to be determined at year end.”

The current arrears of £18 million represent approximately 13% of the annual rent roll (nearly triple the 5% bad debt provision).

The paper itself warns: “The future forecast surpluses involve a number of assumptions on future spend and income levels which if varied can have a significant effect on available resources. There is therefore a risk of over-reliance on future projected surpluses which could throw the HRA business plan out of balance and necessitate additional borrowing [our emphasis], higher rents (if permissible) or reduced service provision in future years.”

The mathematics problem

The HRA business plan projects that reserves will initially increase as old self-financing debt is repaid. Reserves are then forecast to decline to £107 million (a net £46 million fall from the 2026 starting position).

But that assumes bad debt at a third of the current rate, meaning that reserves will go down significantly faster than budgeted while at the same time the council needs to make larger payments on what it has borrowed.

It’s a risky financial position and one that the current administration remains seemingly oblivious to, believing that it has sufficient reserves to cover the growing losses. That in itself is a recipe for financial disaster.

Five months of statements

Date	Meeting	Statement	Context
22 Sept 2025	Cabinet	“Doesn’t make sense to sit on reserves” (commends “active and forward thinking” spending)	Dept £15.7m HRA overspent, £600k GF overspent, 90% of council’s budget crisis
21 Jan 2026	Housing Committee	“Try not to talk about this too much in public… very, very rare that we would ever evict someone because of rent arrears”	Arrears £18m, rising £2m/year
26 Jan 2026	Cabinet	“No tenant should feel fear of their home. We have a very, very kind of supportive rent engagement team”	Approving £429m borrowing plan
4 Feb 2026	Full Council	“Most generous and compassionate rent repayment offers in London” (Leader Hogg)	Same week as revealing policy kept quiet

Council declines to answer questions

Putney.news sent questions to Cabinet Member for Housing Aydin Dikerdem asking how he reconciles arguing against reserves while his department was £15.7 million overspent; why the eviction policy is kept quiet; how the £11-12 million gap between provisions and actual arrears is sustainable; and whether lenders funding the £429 million borrowing know about the non-eviction policy.

Dikerdem declined to answer the questions, instead responding with personal attacks.

Executive Director of Finance Fenella Merry did not respond to questions about what rent collection rate the business plan assumes, whether it accounts for the eviction policy, and at what arrears level the plan requires formal review.

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