Councillors clash as London council overspends millions on housing disrepair cases

Hackney Council has admitted overspending by millions of pounds on legal disrepair claims brought by its own social housing tenants.

The local authority reveals it paid out more than £1 million in compensation to social housing tenants and overspent by more than £5.5 million on legal disrepair cases.

The council says the social housing sector has seen a sharp rise in disrepair claims from tenants.

Soaring legal disrepair costs

Independent socialist councillor Penny Wrout challenged Hackney Council over its soaring legal disrepair costs at a council meeting.

Ms Wrout pointed to a report by the council which claims the overspending was down to “more resources in place to progress cases.”

She asked: “Legal disrepair was just over £5.5 million overspent, which simply can’t be attributed solely, as the report suggests, to more cases going through the courts.

“Even the alternative dispute resolution scheme, which was set up to save on legal expenses, is £1.5 million overspent.”

Ms Wrout also called for figures on how many disrepair cases were brought against the council last year, how many were lost, and how much was paid out in compensation.

Substantial sting in the tail

Councillor Nicholson, Deputy Mayor and Cabinet Member for Housing Management and Regeneration, said: “The council, in its role as a social housing landlord, has seen a number of legal disrepair cases increase in recent years.

“It must be stressed that the borough is not alone here. The social housing sector as a whole is experiencing much the same.”

Cllr Nicholson confirmed Hackney Council received 508 legal disrepair claims in the last financial year. Of these, 26 were rejected and 454 were closed, with 237 tenants receiving compensation.

He said the total paid out was around £1 million, averaging just over £4,500 per case.

Councillor Nicholson adds: “However, completing more cases and repairing the homes came with a substantial sting in the tail, legal and associated costs charged to the council by third parties amounted to approximately £3.6 million over the course of the year.”

Cllr Nicholson said the council is working to cut legal costs “by ensuring homes are repaired in a timely manner,” which he said would reduce the number of disrepair cases and help resolve long-standing issues faster.

Losing an alarming amount of money

He defended the council’s alternative dispute resolution (ADR) scheme and criticised Cllr Wrout for the tone of her questioning.

Cllr Nicholson said the scheme had stopped 164 cases from escalating into full legal claims, with average payouts of £1,700.

However, Cllr Wrout argued that the figures still show the council is “losing an alarming amount of money to legal fees.”

Ms Wrought then asked: “Is the council properly considering if a case is winnable on just terms, rather than waste money fighting weak cases?”

Nicholson insisted the council tries to resolve disputes or settle before going to court, and pointed to the ADR process as a key part of that approach.

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