Council's `wasted' pounds 20m demolition

Labour authority faces inquiry into deal to let private firm raze estate for private homes

A Labour council's scheme to demolish 600 council houses and replace them with homes for sale has been raised with the district auditor following growing opposition to the plan.

The auditor of Hull city council is also being asked to look at the way in which a single developer, Keepmoat, has been given sole rights to purchase, without competitive tender, all housing development land in the city for the next six or seven years as part of the redevelopment scheme.

Demolition has started on the tightly-knit Gipsyville estate in Hull despite increasing concerns from residents that their community is being destroyed and that the houses could be refurbished rather than pulled down.

The complex deal is a partnership between Hull and Keepmoat and as well as the demolition it involves the refurbishment of the remaining 600 houses on the estate paid for with government regeneration money, council funds and Keepmoat's profits from the sale of land.

Two weeks ago, The Independent's revealed that the district auditor in Doncaster was to investigate Doncaster 2000, a venture involving the same company, Keepmoat, and the local council.

Councillors in Doncaster have been criticised by the district auditor for accepting "inappropriate hospitality" from Keepmoat after the company left raffle tickets, with a first prize of a trip to the Kentucky Derby, on seats in its box at the racecourse. The prize was won by a Barnsley council official.

The row is an embarrassment for John Prescott, who is a Hull MP and a close political ally of the housing chairman, John Black, who has piloted through the Gipsyville scheme. Mr Black refused to comment last night.

The Hull scheme was not put out to tender because the council says that Keepmoat was the only company interested in developing the estate. It says the extra land sales were necessary to pay for the refurbishment of the remaining homes.

John Perry, of the Chartered Institute for Housing, said he thought the Hull deal was unusual: "Normally, councils only give such exclusive deals on their land to non-profit making bodies such as housing associations. Developers normally have to go through a tendering process for all land."

Local residents opposed to the scheme say the houses have withstood the test of time. They are neatly laid out, next to a park along tree-lined avenues and it is only the damage created by demolition men which makes the estate look run down. The residents are bemused about why Gipsyville, a popular estate in West Hull, one of the better parts of the city, was chosen for such massive redevelopment now not normally favoured by local councils or Government. They point out that there are many areas of Hull with high-rise flats in much more need of radical treatment.

Pat Hopper, 60, a local resident who opposes the scheme and bought her house, said: "There's nothing basically wrong with these houses which a bit of improvement money would not have put right." Residents have suggested that instead of comprehensive redev- elopment, the council's contribution of pounds 10m to the Keepmoat scheme should have been spent on minor improvements requested by the tenants. Mrs Hopper said: "My mother lives next door and all she needs is a new bathroom suite. These houses were refurbished only 20 years ago and everything in them is very sound."

A local church worker, Andrew Dorton, wrote to the housing minister, David Curry, in December expressing concerns at the way the community was being broken up by the scheme and said the council was "intimidatory" for starting demolition of houses next to owner occupied homes like Mrs Hopper's which are still the subject of a planning inquiry decision.

Chris Jarvis, a Labour councillor who has lost the party whip after opposing the scheme, is seeing the district auditor next week about his concerns about the plan: "I can't understand why a Labour council wants to demolish 600 perfectly good homes to provide mostly owner occupied housing and as part of the deal also ties up all its housing land well into the next decade and which also will be used to build housing for sale." The scheme is also attracting opposition around the city. Last month three councillors in the Orchard Park ward who expressed concern in a committee meeting over the proposed redevelopment of a shopping centre by Keepmoat were threatened with losing the party whip if they continued with their opposition because "it was against party policy".

Tony Fee, one of the three said: "All I wanted was for the site to be put out to tender and for the profits to be spent locally rather than on Gipsyville. I have been a councillor since 1970 and never experienced anything like this."

But the council stresses that the scheme has the approval of the Government and has been supported by a ballot of local tenants. Patrick Doyle, the city council leader, said: "The Government is putting in pounds 11.7m of grant through its single regeneration budget. This is very carefully scrutinised at every stage and if they were worried about it, they would not put in any money."

Although 30 houses on Gipsyville have been demolished the scheme is currently being delayed because of a planning inquiry into a compulsory purchase order of a dozen homes which have been bought by former tenants.

If the CPO order is not granted, the financial viability of the whole Gipsyville scheme will be put into question.

The highly charged nature of the decision is thought to have caused the delay since the inquiry in November.