AN extra £2.6m of taxpayers' money will be handed to failing property management company Ascham Homes.
The troubled company, which has already received a £5 million bail out from the council, requested the cash to stabilise its finances, boost its repairs reserve and to pay for a “financial recovery plan”.
The previous cash injection was to enable the company to bring thousands of homes up to a basic standard of decency.
The council was forced to and hand over the cash after a legal ruling, which prevented Ascham Homes charging leaseholders who had not been properly consulted on the work.
The money also covered £114,000 spent trying unsuccessfully to overturn the ruling and an undisclosed amount paid to former chief executive Hassett Auguste.
He stepped down in November following council concerns about the authority's performance.
The council’s housing revenue account has been losing £1m a year, taking the authority close to the figure considered by officers to be a reasonable minimum balance.
The £2.6m bail out was agreed at a cabinet meeting last night.
Cllr Matt Davis, Conservative group leader, said the bailout was needed, but failings should never have been allowed to happen in the first place.
He added: “It has taken far too long for the council to address this issue and we hold the portfolio holder [Cllr Marie Pye] culpable for this.
“There has been a complete failure to provide challenge or leadership to Ascham Homes and we call for her resignation.”
Mick McGough, a leaseholder who helped win the legal battle against the council, said the authority was “throwing good money after bad” in agreeing the bail out.
Speaking at the meeting Cllr Marie Pye, housing cabinet member, said: “We all understand the need for this [the bailout] but it comes with the caveat that we expect improvements from Ascham Homes.”
She told the Guardian today that Ascham Homes is run by an independent board which Conservatives sit on and added that, until recently, she was excluded from board meetings.
She added: “Maybe Cllr Davis should ask members of his own group who have sat on the board over the last few years how we got into this state.”
Ascham Homes is due to be inspected by watchdog the Audit Commission next month, and a poor rating is likely to have funding implications.
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