A WAR of words has erupted after it was revealed an investigation into a controversial housing deal has cost Blackpool Council more than £60,000.
Accountancy firm KPMG was called in to examine the transaction which saw the council sell £2.7m worth of homes and former hotels to a housing association for just £3.
It has now emerged the probe – which exonerated the actions of two former councillors – has cost the taxpayer £62,661.
Former council leader Coun Peter Callow today said the public would be shocked at the cost of the investigation.
But current leader Coun Simon Blackburn said it was imperative an investigation take place into a deal which lost the Council £3 million.
Coun Callow said: “We are pleased with the result of the inquiry, but the cost has been huge and has to be met by the taxpayers at a time when councillors are having to watch every penny.
“(Council leader) Simon Blackburn attacked me for the £4,000 cost of an inquiry into his expenses, but I think the public will be more shocked when they hear the investigation he called for cost more than £60,000.”
But Coun Blackburn, who launched the investigation into the housing deals today argued it had been money well spent.
The KPMG probe, which began last July, centred on the then Tory-led council’s decision to use £3m in Government grants to buy up former hotels in Crystal Road (pictured), Pleasant Street, Tyldesley Road and Central Drive. However, the council did not have enough money to carry out the renovation work so sold the properties for a nominal fee of £3 to a housing association which could then access the necessary funding needed.
Among the deals at the centre of the probe was the purchase of a property on 25/27 Crystal Road, formerly owned by ex-Tory councillors Ian and Susan Fowler. The property now looks likely to be demolished due to structural defects.
Allegations circulated, prior to last year’s local elections, the Fowlers knew the property had “a history of subsidence”. They went on to lose their seats on the council.
The KPMG report cleared them of any wrongdoing, although its findings has led to recommendations to town hall officers on future purchases of property.
The council admitted there were “mistakes” in the transaction and a full structural survey would have revealed major structural deficits. Coun Callow added: “The fact is the Housing and Communities Agency supplied the funding for the scheme and were aware of what we were doing, selling the properties to an association for a nominal fee.”
However, Coun Blackburn countered: “Given the amount of money lost in the affair was almost £3m, and given that in any future projects, the amount at stake could be very much more, this is money well spent.
“That is both in terms of learning lessons for the future and drawing a line under ongoing gossip and innuendo relating to the actions of the last administration. I agree we need to “watch every penny” – which is why we have done what we have done – found out how almost £3m was lost.
“We have also saved more than £2.5m on the cost of senior officers and councillors.”
Conservative group leader Coun Peter Evans said: “The houses didn’t cost us anything because it was grant money given to Blackpool to buy those houses.
“But the cost of this inquiry will be borne by the council tax-payers.”
The final report from the KPMG inquiry has yet to be made public and the company declined to comment.
Last month, The Gazette reported how an investigation was launched after Coun Callow lodged a complaint in relation to Coun Blackburn’s attendance at a Local Government Association meeting which cost £4,511.
Coun Blackburn was cleared of any wrongdoing.