A HOUSING organisation ran up a £300,000 loss in one year despite claiming to have saved Northumberland County Council more than twice that much, a meeting heard last week.
The council’s scrutiny committee heard how Homes for Northumberland ended the financial year before last with a £300,000 loss which had to be made up by the council.
In November, the council commissioned an independent inspection of the housing group’s accounts and its findings revealed that many of the authority’s concerns were justified.
In a report to the meeting, Daljit Lally, the council’s corporate director of adult services and housing, said: “The council was concerned at the paucity of financial reporting and information which made the client role difficult.
“This concern was heightened when an internal audit into budget management and financial control gave limited assurance status.
“There was concern that Homes for Northumberland was repeatedly misrepresenting the financial position as it often claimed to have made substantial savings and efficiencies for the benefit of the council when this was not the case.
“In one year, it claimed to have saved the council £700,000 but in fact ended the year £300,000 in deficit.
“The council had to fund the deficit, yet Homes for Northumberland continued to publicly claim the saving.”
The report also revealed that more than 200 homes had not had valid gas safety checks carried out, some for over 200 days.
A new board has now been put in charge of the group, created in 2009 as an arm’s-length management organisation to take over from Blyth Valley Housing, and a council officer has been seconded to cover the managing director’s position left by Ray Boycott while further investigations are undertaken.
Tom Brechany, pictured, the council’s executive member for housing, said: “Over the past 12 months, the council had become increasingly concerned about a number of issues in relation to the performance and management of Homes for Northumberland and raised these issues on numerous occasions with the board and management of the company.
“These issues were exposing both the council and tenants to considerable risk, and we were left with no alternative but to act.
“We have now strengthened the board and senior management of the company and developed an improvement plan.”
“This recent action is separate from the council’s consideration of future management arrangements.
“We want to assure tenants that we have taken these actions in their best interests and, in the coming months, will be working with them to make sure that they have the quality of housing management service that they deserve.”
Homes for Northumberland declined to comment on the report.