Homelessness crisis: Claims plan to fix problem was ‘illegal’

Homelessness crisis
Homelessness crisis

A last-ditch plan to reduce homelessness in MK has hit a major snag – by being branded potentially ILLEGAL.

Labour councillors were due to unveil the £5 million scheme on Monday, following months of consultation with council officers.

They planned to borrow the cash from the government then hand it to an investment company called the Real Lettings Property fund.

The privately-run fund would purchase 70 local flats to be used for homeless families.

St Mungo’s charity was set to manage the properties, as well as providing “move-on” support.

Meanwhile Real Lettings would pocket a percentage of the initial investment and ongoing annual payments afterwards.

The plan has been Labour’s trump card to deal with the city’s rocketing homeless crisis and reduce the £1 million plus annual bill for hotels and B&Bs.

But at the eleventh hour it was withdrawn from the council’s Cabinet meeting – following a query from conservative leader and finance whiz Edith Bald.

Said Edith: “I called the council’s finance director just before the meeting and said I didn’t think the plan is legal.’

“My understanding is that ​under the council​‘​s own Treasury Management Policy, we are not allowed to ​invest in a property fund.​ We can only use the money for something that would pr​ovide a dedicated​ asset to the council.”

Edith’s doubts follow a recent bid by Oxford City Council to invest money with the same company.

The Oxford officers ruled: “The council is not legally able to borrow to invest. This transaction would have to be funded from available internal cash balances.”

But MK council leader Pete Marland told the Citizen: “I can confidently say it is legal but it is an unusual plan and therefore we are going to check the process to be doubly sure.

He is now hoping to find a loophole by tweaking the council’s treasury policies later this year.