Instead of being demolished immediately, the houses stand empty for years and are often vandalised, according to a report published today by the National Audit Office, the public spending watchdog.
Frequently - as in the case of a proposed improvement in the M20 in Kent, where 231 houses were bought - the plans change and the purchase is rendered unnecessary. In total, the NAO says, 60 per cent of the department's house purchases outside London need not have been made.
Since 1989, expenditure by the department on compulsory purchase orders of threatened properties has increased 200 per cent to pounds 220m in 1992-93. In March 1993, the department had 3,600 houses and 300 plots of land on its books - of which 788 houses were lying empty. These included 'executive' houses in Chorleywood, Hertfordshire, which were affected by plans to widen the M25.
Officials bought 64 homes in Chorleywood, most for more than pounds 175,000 each. They were passed to a housing association to manage pending their eventual demolition. Finding tenants to pay market rents of upwards of pounds 650 a month proved difficult for 16 of them. After eight houses were vandalised and two squatted in, the department hired a security firm for pounds 60,000. A further pounds 130,000 was spent on repairs.
In another case in the West Midlands, one property attracted squatters who caused pounds 36,000 worth of damage before security cover was arranged at a further weekly cost of pounds 2,000. It was sold at a loss of almost pounds 180,000.
Repairs costing pounds 158,000 were carried out to 12 houses, also in the West Midlands, even though they will be demolished in the next two to three years. The department had to carry out the work after neighbours and MPs complained about the properties.
Part of the problem, the NAO says, is that the department is often forced to intervene before plans for a new route are finalised. As soon as the new road is rumoured, property prices start to fall. By the time plans are settled, the department has issued needless compulsory purchase orders.
'Shortening the time taken to announce the preferred route would help the department reduce the level of unnecessary acquisitions,' the watchdog declares. 'If road schemes are delayed, there is a risk that land and property is obtained in advance of need.'
Much of the blame for the waste, though, lies with the department's officials. Although there are set time limits for each stage of the road-building, 'they do not monitor centrally whether they are acquiring or entering too early', the NAO says.
Negotiations can often drag on and force up the price. The NAO found that the average time taken to reach an agreed price on a compulsory purchase order was 10 months. The department has assured the NAO it is doing its bit to try to speed up negotiations.
Since 1987, the cost of farming out the properties to housing associations and agents to manage has doubled to pounds 4.3m. By March 1993, the department was owed rent arrears of pounds 2m. Again, the department is criticised for behaving too generously. The new route for the A3 at Liphook in Hampshire caused officials to buy an old people's nursing home. A former tenant ran up arrears of pounds 26,000 which, says the NAO, were not pursued early enough.
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