Thursday, 28 July 2016

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Novas funds withdrawn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.

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