Thanet council has agreed to write-off £278,000 of an outstanding loan owed by East Kent Housing.
The decision, approved by Thanet council leader Rick Everitt, was deemed ‘urgent’ due to EKH being wound up so housing services can be taken back by the authority.
A council report says Thanet District Council, Canterbury City Council, Dover District Council and Folkestone & Hythe District Council advanced EKH loans of £223,000 each in 2014 to fund the implementation of a single IT system. The loans were due to be repaid in six instalments from 1 April 2017.
The costs of the system were higher than expected and implementation took longer, so in 2018 further advances of £92,500 per authority were made to EKH. Repayments were rescheduled to start in April 2019 in equal instalments over seven years.
But, now that services provided by EKH are being transferred back to the four authorities, the outstanding balances on the loans made to EKH (£278,000 each authority) need to be written off. EKH is being wound up and the IT systems will be transferred to the four councils.
The councils have to release EKH from the debt so that the organisation can be shut down.
A deed of release will be signed by EKH and each council.
The four councils took the decision to close EKH and bring housing services back under authority control following revelations earlier last year that hundreds of council property tenants across east Kent had been awaiting gas safety certificates due to overdue Landlord Gas Safety Register assessments.
It then emerged that there were also grave concerns over potential further issues with electrical certification, lifts, fire safety and legionella testing.
In addition there was the possibility of a criminal case being brought due to contractor P&R overpayments to which could ‘constitute fraud.
P&R terminated its contract with EKH and work is currently being undertaken by Swale Heating.’
EKH staff and the services it provides are set to transfer to the four councils at close of play on September 30 this year.
