Ealing Council faced the loss of a £9.2M grant from the Housing Corporation this week following the break down of its relationship with its development partner for the regeneration of the South Acton Estate.

Cabinet approved the selection of Wates as its development partner in October 2004. The first indication opposition Councillors or the public were given that Wates had concerns with the arrangement was on Monday evening when an urgent report to Cabinet was published. The report indicated that Wates had concerns over the extent of Council control and were also demanding a 20% profit margin.

The report recommended embarking on an arrangement with Ealing Family Homes whereby there would be a “good faith” agreement to seek out a new private sector development partner. The urgency revolved around the £9.2m Housing Corporation Grant which would be in jeopardy if an agreement was not in place by 31st March 2006.

Leader of the Opposition, Cllr Jason Stacey said the last minute arrangement was so close to the wire that it was impossible to assess whether it was in the best interests of South Acton residents or the borough as a whole. He said,  “This saga raises serious questions about processes of decision making in Ealing. After 18 months of partnership with Wates it was literally only the night before a decision had to be made that opposition councillors or the public were informed there was a problem. This Council put in jeopardy £9.2M of vital regeneration grant money at risk by not being open about what happened, or involving councillors of all parties at an earlier stage. We still do not know the full reasons for the break down of the Council’s relationship with Wates or the full implications of this last minute deal with Ealing Family Housing.”

In response to a number of public accusations, Councillor Liz Brookes, cabinet member for economic and social regeneration, has today sent a letter to residents of the South Acton estate in which she writes, "Some of you may have heard rumours or have read articles in the press that there are difficulties with the project. I want to ensure that you have the facts. Most of you will know that over a year ago we appointed Ealing Family Housing and Wates Developers to be our partners in redeveloping the Phase 2 area including new and refurbished housing, community facilities, new landscaping, redesigned streets and roads." 

"The scheme is very complex legally and financially. A key part of the funding to do this work is £9.2 million in the form of a government grant from the Housing Corporation. To ensure we get this money we needed to sign a development agreement with both Wates and Ealing Family by 31st March 2006.  To our disappointment we have not been able to conclude an agreement with Wates in time to meet this deadline. There are a number of reasons for this which are too detailed for this letter but they include Wates wishing to introduce a second private developer and discussion about investment return guarantees."

She continued, "The Council remains committed to delivering the regeneration plan that we have agreed with residents and we are making every effort to do this. I would have preferred to be writing to you to confirm that a deal has been signed and both councillors and officers are disappointed that we have not yet managed to resolve matters with Wates. However we will continue to work to find a solution."

Local Liberal Democrat Councillor Gary Malcom said, "Ealing council seriously risked losing £9.2 million because they did not manage the project properly. Leaving things so close to the deadline with no leaway for delays means that some events may bring trouble. There are still aspects of the redevelopment that are not ideal for residents and it would have been better if the council had planned matters more effectively at the start so that residents would get a good deal as well as the council being able to get its hands on extra money."