Sunday, 24 May 2015

Government removed refurbishment cash from provider facing inquiry

Novas funds withdrawn

The government withdrew millions of pounds of funding from a flagship project run by a housing provider now facing a statutory inquiry.

The Housing Corporation last week ordered a statutory inquiry into the financial management of Novas Scarman.

This week the Communities and Local Government department revealed it had pledged £17 million to support refurbishment work at the Arlington House hostel in 2005. But the following year it withdrew £4.2 million from the scheme. The withdrawal happened when the organisation was known as Novas Group, before last year’s merger with the Scarman Trust and Path.

The CLG said that the change was ‘due to the project’s failure to obtain planning permission in time’.

Meanwhile, Camden councillor Patricia Callaghan this week told Inside Housing that she had resigned from the board of Novas Scarman over the impending sale of the hostel.

Novas has been selling off property and hostels in recent years, and in 2005 St Mungo’s was given grant to buy 11 of Novas’ Supporting People projects.

Ms Callaghan said she was ‘spitting blood’ over the decision to sell Arlington House, which she blamed on financial pressure from massive investment in social enterprise as well as historic debts arising from Novas’ merger.

‘I was very upset about the way the selling of Arlington was handled,’ Ms Callaghan said.

A spokesperson for Novas Scarman said the group ‘experienced six months’ short-term cash flow pressures as it waited [for] a large repayment of VAT paid and grants owed to it, now all largely paid’.

‘The merger with Scarman and Path mostly created short-term pressures on cash flow, with £800,000 in contract fees owed to the Scarman Trust that should all have come in by the end of 2008.’

She added that the group originally planned to turn Arlington House into a social enterprise hostel but ‘failed to win planning approval’. There was a funding cut from the CLG as a result.

Readers' comments (1)

Comments are only open to subscribers of Inside Housing

Already a subscriber?

If you’re already a subscriber to Inside Housing, your subscription may not be linked to your online account. You can link your subscription from within the My Account section of the website and clicking on Link My Account.

Not yet a subscriber?

If you don't yet subscribe to Inside Housing, please visit our subscription page to view our various subscription packages.

Have your say

You must sign in to make a comment

sign in register

Newsletter Sign-up

Related images

Related

Articles

  • Region fears competition for housing funds

    1 April 2015

    A partnership of south-west region housing providers and builders has warned the region could be sidelined if the UK continues to devolve housing budgets.

  • Council pension funds reject 3% challenge

    5 February 2015

    A number of local authority pension funds have rejected calls for them to take on a ‘3% challenge’ to invest in housing projects in their area.

  • Pension funds commit £500m investment

    22 January 2015

    Two of the UK’s largest local authority pension schemes have announced plans to invest a joint £500m in infrastructure, potentially including social housing.

  • Scots councils spend 100% of DHP funds

    26 August 2014

    Four Scottish councils have already spent or committed their share of the country’s emergency housing payments for this financial year, official statistics reveal

  • Funds shift to councils and smaller providers

    25/07/2014

    Dozens more councils have been allocated funding for affordable homes and smaller housing associations have become the biggest bidders, as larger landlords shunned government cash in the 2015-18 funding round.

IH Subscription