Monday, 30 January 2012

Mistakes made in £3m housing deal

Crystal Road hotels bought by Blackpool Council
Crystal Road hotels bought by Blackpool Council
AN investigation into a controversial deal which saw Blackpool Council sell £2.7m worth of houses for just £3 has cleared councillors of any wrongdoing.
But it has found there were “mistakes” in the transaction.
Although the full report has yet to be made public, it has been revealed valuations were not properly checked.
Council leader Coun Simon Blackburn launched the inquiry last July.
He had been critical of the previous Tory administration’s handling of the deal which saw failing holiday accommodation bought up as part of a social housing pilot scheme.
Among the deals at the centre of the probe was the purchase of a property on Crystal Road from former Tory councillors Ian and Susan Fowler.
Other transactions which came under the spotlight were the council’s purchase of former hotels Shadowlands on Pleasant Street, and the Saville on Tyldesley Road, and the King Edward Apartments on Central Drive.
Coun Blackburn said today: “As a result of ongoing controversy, speculation and gossip, and following a formal request from a member of the public, I asked KPMG LLP to conduct a wide ranging review of the transactions which saw £3m of public money spent on properties that were later sold for a much smaller sum.
“The report is clear in its view there was no wrongdoing by any member of the council, past or present.
“There are a number of key recommendations to ensure no such situation arises in the future – not least ensuring basic structural surveys are conducted prior to future purchases, and valuations are robust.
“Those council staff responsible have now either left the authority, or have been dealt with through internal procedures.”
A property at 25 to 27 Crystal Road was sold by the Fowlers to the council for £180,000. It now looks set to be demolished due to structural problems.
Coun Blackburn added: “It is clear valuations were not correctly triangulated and checked.
“A full structural survey would have revealed major structural deficits with 25/27 Crystal Road.
“A formal decision about what to do with 25/27 Crystal Road has yet to be taken, however, demolition is the most likely and cost-effective option.
“We will examine all options to try and insulate the public purse from any further losses due to the mistakes made in the original transaction.”
Coun Peter Callow, who was leader of the council at the time of the transactions in 2010, said he was pleased councillors at the centre of the decision had been “completely exonerated”.
The Fowlers both lost their seats at last year’s local elections.
Coun Callow said: “I didn’t doubt that myself and the rest of the executive, as well as Ian and Susan Fowler, would be completely cleared of any wrong-doing.
“If something is recommended by an officer, you trust they have done their job.”
Using Homes and Communities Agency funding, the Saville was bought for £200,000 and the King Edward Apartments for £850,000.
A portfolio worth £2.7m was sold in December 2010 to housing group Great Place for £3 so they could revamp them and convert them back into family homes.
Bispham-based cabbie David Palmer spent £256 on delivering 6,000 leaflets in a bid to discredit Mr and Mrs Fowler ahead of the May local elections, and called for an investigation.

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