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The sale of a £2.7 million property portfolio for just £3 by a council to a property development company is under investigation.
Blackpool Council leader Simon Blackburn has pledged to go public with the results of an independent scrutiny of the deal.
The council put the portfolio together by buying up failing hotels and bed-and-breakfasts in the seaside town with plans to refurbish them as social housing.
The plan fell through when the costs of renovating each property were put at an average £130,000 which was money the council does not have.
Councillors and residents have spoken out against the deal as one of the properties belonged to former Conservative councillors Ian and Susan Fowler.
“Buying and selling these properties for a £1 has been controversial,” said Mr Blackburn.
“Recognising the public interest, I have requested the chief executive to commission an independent audit in to the criteria for selecting the properties, the price paid and how that related to the condition and price of the buildings when they were sold.”
Susan Fowler denies any wrongdoing by her or her husband.
“Despite the questions, we have no reason to reproach ourselves. We merely sold property in an area that is going through an uplift,” she said.
Blackpool Council is believed to have funded the property purchases of two guest houses and three flats with taxpayer cash from the Homes and Communities Agency.
The property buyer, Great Places, is an active urban renewal and social housing provider in the north of England.
Besides the Crystal Road purchase from the Fowlers, the council investigation also encompasses buying the Saville Hotel, Tyldesley Road for £200,000 and the £850,000 purchase of three apartments on Central Drive.
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