West Hampstead accumulates £11.5m deficit
Genesis Housing Group has found another huge hole in the finances of its West Hampstead subsidiary – but hopes the discovery will ‘draw a line' under its troubled past.
West Hampstead Housing Association recorded a deficit of £5.5 million for the year 2001/02, contributing to an accumulated deficit of £11.5 million.
However £4 million – the bulk of the annual shortfall – was created not by losses on operational activities but by provision for ‘one-off and exceptional items' pinpointed by Genesis, mainly relating to West Hampstead's extensive temporary housing operation.
These include debts to landlords who leased properties to the association and potential claims by landlords for dilapidation costs.
Genesis group finance director David Levenson said: ‘Some money is owed, some money is being claimed, some is where we have had to take a view of the possibility of claims.
‘There was no other choice but to ensure that we are as fully covered as we can be against any eventuality.
‘All the bad news is out and included. We want to draw a line under the past.'
Despite the deficit, Mr Levenson said he believed there was no need to extend West Hampstead's financial cover beyond the existing £3 million overdraft guaranteed by the Housing Corporation and the £5 million loan facility extended by Genesis.
However the association's ongoing programme of property sales across north London will continue.
A corporation spokesperson said it was satisfied with Genesis' continued handling of West Hampstead.