In the vote in August last year, the proposal by Torbay Tenants' Housing Association to take over property in Torquay, Paignton and Brixham was defeated by a vote of 85 per cent of the 2,000 tenants. Only 150 voted in favour.
Nick Raynsford, Labour's housing spokesman, yesterday wrote to Sir John Bourn, head of the National Audit Office, to ask him to investigate the "extravagant and ineffective use of public money". He made his demand after receiving a letter from David Curry, the housing minister. This revealed that a parliamentary answer he gave four months ago contained an error, and understated the amount spent on the Torbay association by pounds 300,000.
Mr Curry told Mr Raynsford a "clerical error" by the Housing Corporation, which channels public money to housing associations, meant "the wrong figures were added together".
"I can only apologise for this mistake. Obviously there was no intention whatsoever to mislead you, or the House, and I am taking the earliest opportunity to correct the figures."
Mr Raynsford demanded also to know why the Corporation's accounting system was "so inadequate that a mistake on this scale could occur".
The Torbay ballot was held under the "Tenants' Choice" legislation put through by the late Nicholas Ridley, Secretary of State for the Environment under Margaret Thatcher.
But the scheme has failed to "set tenants free" from council landlords. Fewer than 1,000 homes have been transferred after only five successful ballots. Only seven ballots were held under the legislation, of which Torbay was the largest, at a cost of pounds 4.2m to the taxpayer. The Government is repealing the scheme in the Housing Bill.Reuse content