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.
Not bad for a near bankrupt council. Still it is only residents money and not their own. Grrrrrrrr
Sensible decision. In the end I hope the people whose homes were “maintained” by EKH will be more safe and secure.
That would be the EKH that TDC were a 25% owner of? It was TDC that starved EKH of funding or decided which works did or didn’t get done. The situation will only improve if TDC spend more money on their housing and monitor the contracts that they approve properly.
Huge amounts of money are wasted by TDC and EKH making sure that any blame can be attributed anywhere but within the individual councils.
I honestly don’t know enough about the admin etc, you sound as if you know a lot more than me. I was referring to the procedure of winding it up. What do you think would be the best way forward? What do you think a “servant hearted led” council should do in order to resolve the situation? Thank you
Another shambolic decision by a Labour-run council.
Thanks to the Thanet Independents for the coup. Your be the down fall of TDC and you know it.
Erm! Wasn’t it a Tory council that agreed the loan?
Let me just summarise this fiasco :
1. East Kent Housing failed to repay the original loan
2. Four local authorities then lent EKH more money
3. EKH then failed to repay the increased debt
4. Four local authorities are now just doing to write off over £1m of debt
5. That’s Council Tax payers’ money going down the drain
Where is the District Auditor who is supposed to oversee the impropriety of local authorities ?
Well said
Not really, its little more than TDC lending money to itself and then not paying it back. In reality its a case of the councils funding their own loss making company. Perhaps there should be an audit on what the whole EKH fiasco has cost , daft really as the idea behind its creation was that economies of scale would mean that there would be considerable cost savings. 9 years on its become a costly failure and will cost TDC council tax payers even more to put right.
The only real solution is to increase council rents to reflect the true cost of supplying and maintaining the properties. New legislation adds to these costs all the time . Surely those bemefitting should bear the cost not the council tax payer.
The legionella risk control system the council has decided to use is costing around £2 per week per property ( which is absurd) and the “reprovision” of insulation for the tower blocks is budgeted at 13 million so will no doubt end up costing far more. The proposedincrease in council rents of £2.50 a week is hardly going to cover the interest let alone the capital.
What ain’t that taxpayers money. Should be ashamed of yourself next your be putting rent up and council tax to scrape it all back from the poor
Oh so ok for them to write this dept off as lets face it its only taxpayers money after all
There have been decades of poor decision making by TDC resulting in the loss of funds or payments to TDC. I hope no corruption is involved like with a previous leader of TDC. That would be terrible! After-all it is the taxpayer and tenants who will be paying extra to claw the money back. Maybe the leader can stop the payment for a white elephant train station, that will save a bit.
How on earth can Thanet Council afford to just abandon it’s duty to their residents in making sure we get good value for money when services have been cut to the hilt but money is wasted like this? It’s not the first time and it makes no difference which party is in control. It is just bad management from those in charge.
In respect of EKH, the focus should be on those within TDC who should have been making sure that the councils interests were being protected and works were being done corectly. There is more than a suggestion of a culture of very cosy relationships between contractors and those signing off works for payment. However with all the EKH staff hoping to find employment within one of the four councils , no one is willing to say anything.
That would be Sandy Ezekial your referring to, the Tory Leader of the council at the time, who went to prison for corruption didn’t he?
You should try phoning EKH your told to email them to which they never reply spend anything from half hour to hour and nothing ever gets done total waste of time have been living at same council house for 30 years have painted their back garden fences every year to keep them in good condition last year in gales the whole side came down and was told I now own the fences and it’s my job to put right I wonder if I now own the house?
Even better, try being a leaseholder, to report a problem with the common areas etc, you’re told to report to Mears, but the system Mears uses does not list leasehold properties so can’t/won’t help, so instead you have to report using a flat number you know is still a council property.
Its all very well slating EKH but if you knew their staff you would know that they have worked tirelessly despite the risk of losing their jobs. Most have a job with the transfer but some don’t. Spare a polite thought for them.