Convicted statutory repairs staff could be chased for fraud costs

Repair work on tenements
Repair work on tenements
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PROPERTY staff sacked over the statutory repairs scandal at Edinburgh City Council could be pursued for damages to help cover the huge costs of rectifying the collapsed system, it has emerged.

City leaders today said they would seek to recover funds from any former employee convicted of fraud at the property department, while contractors found to have profited from alleged corruption at the local authority would also be targeted in an attempt to recoup tens of millions of pounds.

It is understood lawyers would have to take those convicted to a civil court to claw back some of the money.

Lothian and Borders Police is currently investigating allegations staff were bribed by some contractors in exchange for lucrative repair projects.

Bill Cook, the city’s deputy finance leader, said: “Where people have behaved in an illegal manner we are duty bound to pursue them for the funds. The public would expect that of us.”

The council is facing a major shortfall in funding after paying around £30 million up front to contractors. The council is trying to discover which work has been done, if that work needed to be done and, if it was completed, that the correct materials were used.

A further £9m of outstanding bills that homeowners have refused to pay – because many believe the works may not be legitimate – has gone uncollected since March 2011. The Deloitte investigation in the scandal has also cost £2.2m.

In August, the Evening News revealed that the team drafted in to deal with complaints had used up two-thirds of its £300,000 budget, despite resolving only 45 of 750 cases.

Staff at both the property conservation department – which deals with repairs to the city’s ageing tenements – and property care – which looks after schools and civic buildings – have been suspended and all but emergency work has been frozen while investigators probe corruption claims.

At the same time, council chiefs are attempting to design a new scheme to ensure there is a mechanism so buildings cannot be left to fall apart.

Alasdair Rankin, the city’s finance leader, today said the new property system would be a significant departure from the previous one. He said homeowners would be encouraged to take responsibility for their own homes, with tenement owners grouping together to agree that communal works needed to be done, and the council only stepping in as a last resort.

The previous system is alleged to have seen officials deployed to actively look for buildings which could be served with a notice.

Lorn Macneal, 56, an architect who challenged surveyors over a £300,000 bill and managed to cut the costs of the work on his New Town tenement to just £40,000, cast doubt on the feasibility of recovering costs.

He said: “Many of the contractors are out of business now and their directors are likely to have passed on assets to their family members to avoid any kind of recovery.

“When it comes to council staff, most of those involved are probably paid £25-30,000 and I’m not sure how feasible it is to recover from them.”

He added: “The problem now is the council is absolving themselves of any responsibility and leaving it up to homeowners. These buildings do need a large amount of money spent.

“We know all too well of the tragedy of the waitress killed 12 years ago by falling masonry, so there has to be some mechanism that ensures this work is done.”