Consortium’s debts could now exceed £1 million after recent liquidation
HCA paid failed Cyntra consortium £600k
The Homes and Communities Agency paid out over £600,000 in grant to a procurement consortium that abruptly ceased trading two weeks ago.
Of a total of £679,000 funding from the HCA received by Cyntra since it was set up in 2005, £315,000 was given in the 2009/10 financial year to help it establish a procurement network which now faces being disbanded.
An HCA spokesperson said the agency ‘is considering its options in relation to the grant paid’.
A meeting of creditors, including former members of staff, is due to be held later this month. The HCA is understood to be considering whether to add its name to the list of creditors. This would take the total owed by Cyntra’s local authority and arm’s-length management organisation owners beyond the £1 million mark.
The framework set up using HCA money was finalised last year with contractors promised £800 million of work over four years. The consortium was liquidated before any significant amount of work could be procured through the framework.
Cyntra’s liquidators could still sell the framework agreements with contractors to local authorities. This is understood to be the option favoured by the HCA.
The spokesperson added: ‘Our main aim is that the learning developed by Cyntra, such as the procurement framework, continues to be available to achieve further savings in social housing management and maintenance.’
Last week, Inside Housing revealed that Cyntra ceased trading after its board had been presented with a range of options on how to tackle its financial instability.
Notes from a board meeting in May showed that members – which included Ascham Homes, Hounslow Homes and Sutton Housing Partnership – had been told the company was on the brink of collapse and would be ‘technically insolvent’ by August if it continued trading without extra financial support.