Council chiefs say they are ‘hugely disappointed’ after being forced to all but abandon plans to bring hundreds of empty homes back into use across Ashfield because of a contractual dispute.
Ashfield District Council announced last year that it had successfully bid for funding of nearly £3.5m to spend on bringing 285 empty homes back onto the market.
But following contractual difficulties with the funding body, the Homes and Communities Agency (HCA), the council has now had to back out of the original scheme and instead plans to purchase 20 empty properties and add them to its council housing portfolio.
Trevor Watson, the council’s service director for the economy, said that he is ‘hugely disappointed’ that the council will not be delivering the empty homes programme ‘as was initially envisaged when the authority originally announced that it had secured funding.’
The original scheme would have seen a landlord or property owner whose house, flat or bungalow had been empty for more than six months applying to the council for a share of the cash.
The council would have funded 50 per cent of the cost of the work needed to bring it back into occupation, with the landlord paying the other half up front.
Repairs would have been administered by the council and the work would have been subject to the landlord entering a 10-year lease agreement with the council, ensuring the property was then rented out.
But Mr Watson said that the funding was subject to a contract being signed between the council and the HCA and it was on seeing this contract that the problems became apparent.
“Unfortunately the draft contract was not made available until late 2012,” he said.
“Legal advice then confirmed that the outline terms and conditions of the contract were unacceptable to the council as it placed a financial risk with the authority if at any stage within the life of the programme, the landlord defaulted on the lease and the HCA grant conditions.
“In a worst case scenario, the financial risk of the full value of the contract would rest with the council.
“Despite protracted discussions, the HCA were not willing to re-negotiate the contract to sufficiently mitigate the risk that lay with the council.
“It is known that this is a problem not just restricted to Ashfield District Council and one that has been encountered to varying degrees across the country.”
In the wake of the collapse of the existing programme, the council has been working with the HCA to set up an alternative scheme.
This new scheme will see the HCA granting £400,000 to the authority and see the much reduced total of just 20 empty properties renovated and brought back into use.
In this case, the council will purchase the properties and then retain ownership of them, with Ashfield Homes managing them as part of its housing stock.
Mr Watson added: “The number of properties in the project is, to a large extent, controlled by the time remaining in the overall scheme, which ends in March 2015.
“The properties will be purchased according to need identified within the council’s housing strategy, with particular consideration given to the Partnership Plus areas.
“This will therefore not only provide benefit in terms of bringing properties back into use it will also have tangible regeneration effects with a concentration on areas of incidents of crime and anti-social behaviour.”
He added: “It remains a priority of this council to provide descent affordable housing and reduce the number of empty properties across the district as demonstrated by the financial commitment directed to the amended scheme.
“It is only one of several such actions and initiatives to deliver against these council priorities but one which will provide an additional number of affordable homes.”
A spokesman for the Homes and Communities Agency said: “Ashfield District Council were originally awarded a grant for a 285 units scheme following the HCA’s Empty Homes Funding bidding round.
“However during contract negotiations it became apparent that it would not be possible to deliver this scheme.
“The HCA has worked with Ashfield District Council and agreed an amended scheme to deliver 20 units which the council is now taking forward.”