Tenants given cash to buy abroad: Westminster paid for new homes in Chile, Barbados and Australia

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WESTMINSTER City Council tenants were given grants of up to pounds 20,000 to leave their council houses and buy homes abroad. Destinations included Australia, Chile, Barbados, Tenerife, Italy, Spain, Colombia, Poland, Egypt and Germany.

Reports sent by the council to the Department of the Environment show that residents were neither means tested nor properly interviewed before being given the cash. Yet in its alleged 'homes-for-votes' policy the flagship London council spent millions of pounds of public money clearing out council properties. Some of this money was used to send a number of families overseas.

In one case, a pensioner was given pounds 20,000 to buy a pounds 21,000 home in Portugal. Others, who went to Colombia, Chile and Poland, were given the full

asking price of pounds 20,000 for properties without putting up a deposit.

One family with an annual income of pounds 30,000 was given pounds 13,000 to buy a pounds 68,000 property in the south-east of England. A couple were given pounds 13,000 to buy a pounds 65,000 home in London, even though they had pounds 27,000 in savings.

The reports, obtained by the Independent, describe the council's Assisted Purchase Scheme under which council tenants were given up to pounds 13,000 to vacate property. John Magill, the District Auditor, said last week that the scheme, run from 1987 to 1990, was unlawful and cost ratepayers pounds 2.6m.

The reports also show how the DoE approved the use of government grants, topped up to pounds 20,000, as part of another programme, the Cash Incentive Scheme, designed to empty council properties for the homeless in 1990-91. Opposition politicians have alleged that some of those were sold to people more likely to vote Conservative, a charge denied by the council.

The reports show the amounts granted to applicants, their family type, household income, savings and the location of the property they plan to buy. While most are in Britain, a large proportion are abroad.

Last night, Jack Straw, Labour's environment spokesman, said: 'This is absolutely stunning. It proves that ministers knew exactly what Westminster was up to.

'It is ironic that these grants were given without a means test when all other housing-related benefits are now means tested. No wonder there is a housing crisis in London with such perverted priorities.'

One of the reports, dated 20 January 1989 and written by R B Williams, of the council's Home Ownership Centre, says: 'It is an important part of the council's housing strategy to create opportunities for middle-income home ownership by selling a proportion of its stock as it becomes vacant.' The grants were supposed to be purely to release housing for the homeless to rent. Later reports show that most were let, but a few on the council's controversial designated estates were earmarked for sale.

The report adds: 'Grants so far (up until 1989) have not been means tested, nor have applicants been interviewed in any depth, so it is impossible to be certain as to how many would have bought without the grant.'

A council spokesman said: 'The value of the scheme is in freeing up rented accommodation for the homeless. It works out cheaper than housing people in bed and breakfast. We tell people they can go abroad if they want - that's no secret.'

The DoE confirmed Westminster's interpretation and said that the council had a better-than-average record of re-letting properties freed by Cash Incentive Schemes.

Curbs on homeless, page 2