£40m loan revelation raises more questions over Queensway regeneration project

More doubts have been raised over the future of the £575million Queensway regeneration scheme in Southend after it emerged ailing Swan Housing was given a £40million loan.

The Orbit Group, which dropped out of talks to take over Swan Housing in October after discovering the depth of its financial problems, is believed to have given Swan the huge loan earlier this year.

The loan was handed out after Swan was rated non-compliant on governance and financial viability by the Regulator of Social Housing.

Sanctuary Housing is now in talks with Swan for a takeover set to be completed by November 30.

Speaking at a special place scrutiny meeting, Meg Davidson, Conservative councillor for Prittlewell ward said Swan’s financial problems left a big question mark over the 1,700 home Queensway scheme, being delivered by Swan and the council.

She said: “This is a financial emergency for Swan Housing. It’s got to be done by the end of this month because literally their money will run out.

“There has to be a big question mark because Better Queensway is just one of a dozen schemes that Swan Housing is involved in.”

Cllr Davidson said it had been announced the priorities of this takeover would be firstly to safeguard services to tenants and then to assure Swan’s financial viability.

She added: “In addition Sanctuary is taking on a £40million loan that Orbit made to Swan earlier this year so we will have to wait and see how things develop and whether they will be able to proceed with all the projects they are involved in.”

Ian Gilbert, councillor responsible for economic recovery, regeneration and housing, said: “It’s clearly not a position we would have wanted to be in. However, there is a clear way forward. We’ve had all the assurances we would expect to have at this point in the negotiations and there is no conceivable benefit for the council in withholding our consent in terms of change, of control with the partnership.”

Speaking after the meeting, Stephen George, leader of Southend Council, said: “Sanctuary has a track record of taking over housing associations that have run into financial difficulty and they’ve always seemed to have turned them around so I’m reasonably confident.”

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Christine Sexton

Local Democracy Reporter