Edinburgh statutory repairs: Millions to be recovered

By RORY REYNOLDS
Published on 18/03/2013 15:46

AUDITING experts are to be paid hundreds of thousands of pounds to pursue residents for debts stemming from Edinburgh’s statutory repairs scandal.

• Deloitte will be paid around £800,000 to bill househoulds for work carried out under the scheme

• Officials have asked councillors to appoint the firm to recover up to £22m

• The £22m relates to more than 430 projects overseen by the city council

Deloitte will be paid around £800,000 to bill households for work carried out under the controversial scheme.

Edinburgh City Council officials have asked councillors to formally appoint the firm later this week to recover up to around £22million.

Unique to the Scottish capital, the system allows the local authority’s Property Conservation department to issue compulsory repair notices to ageing private buildings, mostly Victorian tenements.

This forces residents to carry out work and ensure the properties remain in good condition.

The £22m relates to more than 430 projects overseen by the city council, which hired and paid private contractors to carry out the work up front.

However, it has been unable to recover the costs to date due to a police fraud investigation and a separate internal probe, which both relate to the overcharging of residents and allegations that council surveyors handed work to contractors which used inferior materials.

Allegations previously confirmed in a police report state that council officials were taken to lap dancing bars by at least one contractor.

Deloitte - which also carried out the internal investigation at the council at a cost of around £2m - has emerged as the chosen bidder, costing the work at £792,965.

Over the next six months it is tasked with billing all of the homeowners who are yet to pay for the work.

However, the process is expected to be complex, as many projects are several years old and are mired in allegations of corruption on the part of contractors.

Cllr Alasdair Rankin, the city’s finance leader, claimed that bringing in a private firm to carry out the billing would give residents greater faith in the process.

He said: “It’s essential for the council’s finances, and to reduce a burden on Edinburgh taxpayers, that we recover the amounts for work done but never billed. We fully recognise that property owners need to have faith that the bills are properly worked out which is one of the reasons for appointing an independent organisation to do this. I’m sure many also want this issue resolved sooner rather than later and Deloitte will help us achieve that.”

Appeal for ‘unnecessary’ work

Lawyers acting for a number of property owners have also warned that they will appeal any attempts to bill their clients for work which they believe was unnecessary.

Mark Turley, director of the communities department at Edinburgh City Council, said that external staff were needed to work on the billing operation, despite the “significant cost”.

He wrote in a report to the finance committee: “There is an urgent need to progress the recovery of the outstanding council costs and there are insufficient in-house staff to deliver this within a reasonable timeframe.

“In order to expedite the financial recovery a consultant is sought to work in partnership with City of Edinburgh Council to bring these projects to billing stage and to support the recovery of this money.

“There is a significant cost to the proposed appointment. However this will be offset by an improved rate of billing and collection. The additional costs of the recovery work will be charged to the existing bad debt provision.”

Suspended

The property conservation service is currently suspended, and 11 staff have been sacked to date.

Only emergency work is being undertaken, for example to repair buildings where masonry is crumbling. A newly revised system will be launched from April.

The council introduced the scheme for monitoring historic buildings following the tragedy at Ryan’s Bar in the West End in 2000, when Australian waitress Christine Foster was killed by falling masonry. The sheriff who presided over the fatal accident inquiry ordered the council to carry out an immediate audit of properties across the city, after which the existing system was introduced.