Southwark Council has come under fire for ‘overcharging’ flat owners for repairs to buildings that it owns, and taking years to pay the money back.
Figures released through a Southwark resident’s freedom of information request showed that the Labour-controlled council owed leaseholders an average of £1,258 in the 2021/2022 financial year after overestimating how much major works would cost.
Southwark’s Lib Dem group said the findings were “shocking” and demanded a review of the process. Labour said that it had to charge leaseholders up front, or it would not have money for other housing projects or repairs.
Council estates are made up of council tenants, and people who own flats that have been sold off – leaseholders. The buildings themselves are still owned by the council. When repair work needs to take place, the council can charge leaseholders for their share of the costs.
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The council makes an estimate of the costs, and then charges leaseholders, who have the option of paying in instalments. The actual final cost becomes clear at the end of the project, but the council has been taking an average of three-and-a-half years to send leaseholders the final bill.
Pam Murphy, who owns a flat in a council block on Southwark Bridge Road in Borough, uncovered the data, which goes from 2016 to 2022, through a freedom of information request. She said that she had been left more than £2,000 out of pocket in major works that took place shortly before the Covid-19 pandemic, on top of previous repairs about ten years ago.
Commenting, Cllr Victor Chamberlain, who leads the Lib Dems on Southwark Council, criticised Labour for the delays for “making our residents’ lives harder amid a cost-of-living emergency.”
He added: “Leaseholders are already struggling with inadequate housing repairs and poor customer service. At the very least, Labour should have the decency to ensure the council pays any debts it owes to residents quickly and fairly”
Cllr Darren Merrill, Southwark Labour’s cabinet member for council homes and homelessness, hit back at the Lib Dems for “proposing to give much more favourable terms to leaseholders at the expense of secure tenants who have not been able to afford to buy their home, whilst delaying the council’s ability to undertake essential works”.
Cllr Merrill argued that: “Estimated bills allow leaseholders to contribute to the cost of works at the start of a project, whilst secure tenants have been paying into the council for years. We offer a variety of repayment options for leaseholders including three to four years’ options interest-free, with longer term options with marginal interest rates charged…
“We aim to provide as accurate an estimate as possible, and the fact that we are able to achieve better value than predicted saves residents and leaseholders money.”