£2.25million debt to Southend Council may be ‘unrecoverable’

Southend Council could lose out on more than £2million over its deal with Swan Housing to deliver the £500million Queensway regeneration scheme.

Auditors, Deloitte, have warned a debt of £2.25million owed by Porters Place Southend-on-Sea LLP to Southend Council “may not be recoverable” following a merger of Swan and Sanctuary Housing Association.

The merger with Sanctuary was finally agreed in February after a similar deal with Orbit Group fell through in October when it emerged Swan only had enough cash to keep going until December.

The merger with Sanctuary has stabilised Swan, but it is as yet unclear which Swan schemes, including Queensway, will go ahead. If they do not the council may not recoup its investment in Porters Place.

Porters Place, a joint venture between Swan and the council, is due to deliver 1,700 new homes as well as leisure facilities, cafes, restaurants and community facilities in the town centre regeneration scheme.

In a report by Deloitte to Southend Council’s audit committee, which will meet on Tuesday, said: “Over the last year Swan Housing Association have been in discussions with parties around a possible business combination.

“Through discussions with management and our knowledge obtained around the possible transaction we concluded that there is a risk that balances due under the Porters Place agreement may not be recoverable.”

Ian Gilbert, cabinet member for economic recovery, regeneration and housing, said: “The council remains committed to delivering the Better Queensway project, which would not only transform the current estate, but transform the lives of those who live and work in the area.

“Porters Place LLP has been created as a joint venture to deliver the project, and has required financial investment from both the council and Swan Housing to get to the current stage of having various planning approvals for the scheme for example.

“The £2.25m figures referenced in the auditor’s report refers to what is known as a long-term debtor balance due by Porters Place LLP, and was rightly recorded in our 2020/21 accounts.

“However, the well-publicised merger between Swan Housing and Sanctuary Housing has since completed and we are hopeful that the project will proceed as planned through Porters Place LLP and any long-term investment will be recoverable as the scheme progresses.”

Advertisement

Christine Sexton

Local Democracy Reporter