Islington town hall’s ‘sweetheart deal’ with building firm is condemned

Details have emerged of a profit-sharing “sweetheart” deal struck by Islington Council that saw a private contractor pocket more than �12million.

A legitimate arrangement between the council and building firm Kier, which ran from 2000 to 2010, saw each party receive �12.1million of taxpayers’ money over the ten-year period.

Under the deal, the town hall gave Kier a lump sum based on an estimate of how much all repairs to council houses would cost throughout each year.

At the end of the 12-month period, if the repair work had cost less than expected, the remainder would be split between the council and Kier.

Many feel that these kind of deals should never have been made because they are so open to abuse.

Housing Minister Grant Shapps, speaking on a TV programme about leaseholder charges, said: “I feel that’s unforgivable, these kind of sweetheart deals, and I feel particularly strongly when it’s a local authority doing this kind of thing. They should have the interests of their tenants automatically at heart.”

The council confirm that the share they received will be spent on building new homes, but many leaseholders, who are charged for repair work, feel they are entitled to some kind of rebate because they believe they paid their share of the full estimate, not the actual cost.

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Brian Potter, chairman of Islington Leaseholder Association, said: “It’s absolutely disgusting. Any profit-sharing arrangement is very dubious and suspicious. They should pay a fair amount for the work done and there wouldn’t be anything left over.

“As soon as this deal started virtually all the outstanding repairs were conveniently forgotten when Kier took over. The whole thing stinks.”

Cllr James Murray, Islington Council’s executive member for housing and regeneration, said: “The joint venture arrangement was set up under a past administration and the money was reinvested in housing stock.

“However, in the current administration we do not think this arrangement is best for our residents and we ended the joint venture contract soon after coming to power.”