A £450,000 payment to get a housing association out of a Bath building has been branded an “unjustifiable” use of public money.
Leading opposition from across the political spectrum, independent councillor Colin Blackburn criticised the lack of transparency and the loss of 20 homes for vulnerable people.
Bath and North East Somerset Council deputy leader Richard Samuel signed off the six-figure “reverse premium” for 23 Grosvenor Place last month, saying the money could be recouped by selling the property.
It is being paid to Guinness Partnership after it asked to surrender the lease 39 years early because the former hotel does it not lend itself to good quality affordable housing.
Challenging the decision, Mr Blackburn said: “We believe that it is not justifiable to pay £450,000 for a building that will be handed back to us in extremely poor condition and will require further investment to bring back for a suitable use.
“We do not believe it right to allow the tenant to walk away from a full repairing lease without any obligations to contribute financially.
“There has been no discussion or consideration within the council’s scrutiny panels about the implications of losing 20 dwellings from our vulnerable people’s provision.
“We believe that it is not justifiable to pay £450k of taxpayers’ money as a “pay off” to the tenant without even a business plan being in place.
“It was stated that B&NES Council had sought professional advice back in 2018 and the upshot is the £450,000 cost.
“Councillors should have had a chance to see that professional reasoning – withholding it means scrutiny cannot be achieved properly and makes the whole figure/process very confusing.
“There is no detail as to what the future strategy is for the building and what exactly the administration intends to do with it.
“Ultimately, we do not believe that the council is getting best value for money from these arrangements.”
The call-in was backed by independent councillors Karen Walker and June Player, Labour members Robin Moss, Liz Hardman and Chris Dando, and Tories Vic Pritchard, Sally Davis and Paul May.
It will be considered by the corporate policy development and scrutiny panel on Monday 13th January.
Mr Pritchard said: “The public are being kept in the dark over the council’s plans.
“I am astonished that during a housing shortage the Liberal Democrats have put no consideration into the future of 20 beds for vulnerable people – they must do better to protect our existing housing stock.”
Many residents of 23 Grosvenor Place have already been relocated. They were given high priority on the council’s Homesearch portal.
The grade I-listed building was constructed as a hotel in the 18th century and converted into flats in the 1970s.
Mr Samuel, the cabinet member for resources, told December’s full council meeting that the £450,000 payment would be recouped by selling the property, adding: “If there are any funds released, I hope they can be spent on future social housing provision in Bath and North East Somerset.”
Responding to the call-in this week, he said: “Councillors are entitled to call in certain decisions for further scrutiny and this will be debated on January 13.
“I welcome the opportunity for councillors to review the background to this decision and make any recommendations they see fit.
“Currently, Guinness Housing Association owns the leasehold which has 39 years remaining and could sell this on the open market.
“However, we have been given the opportunity to secure the leasehold.
“We already own the freehold and having both would enable the council to carry out a full property appraisal on the asset and decide the building’s future.”
Stephen Sumner, Local Democracy Reporter