Local government reporter and Kent Journalist of the Year Alan Watkins continues his investigation into Medway Council’s housing repairs fiasco

The housing repairs contract likely to end in losses of several million pounds for Medway Council was awarded in a hurry.

Councillors were told last week that only £246,000 will be recovered because council managers signed off the contractor’s invoices, many of which were inflated.

One senior councillor said the situation which led to the overcharging was “disgusting”.

In early December, 2006, the council was about to award the contract to a company called Spring Grove Property Maintenance. But less than a week before, Spring Grove was bought out by Erinaceous Property Management (EPM).

EPM’s reliability record was never checked out.

EPM got through the council’s annual repairs budget in seven months and later went into liquidation. It was then bought by a Finnish investment team called 3C Asset Management.

Last month it was sold on to a Gloucester firm called Mears after 3C lost a similar five-year maintenance contract for Dartford council said to be worth £50 million.

Veteran Labour Cllr Paul Harriott, a housing expert, told the council’s Business Support scrutiny committee that some of the 3C managers had been with a string of previous contractors with whom the council had had repeated difficulties.

Cllr Harriott said overcharging “had been brought to the attention” of the chief financial officer (Mick Hayward) in January, 2008. Mr Hayward did not respond as Cllr Harriott went on to say the former director, Ann Windiate, and ex-assistant director for housing, Geoff Ettridge, had also been told.

“Many of our officers were at fault for signing off the money,” said Cllr Harriott.

“It disgusts me.Frankly, it is disgusting.”

Cllr Steve Kearney (Lib) said: “I don’t blame officers. Somewhere there has to be something fundamentally wrong with the whole system.”

Cllr Craig Mackinlay (Con) said the council had been “royally turned over”.

The shambolic situation in the council's housing department was made public only after the Medway Messenger repeatedly exposed what was going on.

Three staff turned whistleblowers and tried to stop the overspending.

One was disciplined. Two others were made redundant.

All three are suing the council for unfair dismissal and damages before the Employment Tribunal next month.

Other staff, including the two bosses, took early retirement or were replaced.

The decent homes alterations were suspended 13 months ago, but are expected to restart later this year.

The multi-million pound task has to be completed by March, 2011, to meet government deadlines.