Slough council writes off Nova House debt after fixing unsafe cladding

Slough Borough Council has agreed to write off part of a multi-million loan which was dished out to repair a block of flats with unsafe cladding in Slough town centre.

Nova House, in Buckingham Gardens, failed a Government cladding safety test back in June 2017 in the wake of the Grenfell Tower disaster in London.

As a result, in 2018, the council bought the company that owns the freehold to the site, Ground Rents Estate 5 Limited (GRE5), with plans to remove the cladding and repair the building.

But the renovation took longer than expected after structural issues with the building were identified.

At a cabinet meeting on Monday, Councillor Dexter Smith, the council’s leader, said that since 2018, ‘significant remediation works’ have been undertaken and completed.

The block of 68 flats now conforms to safety standards and looks ‘quite visually appealing’, he added.

Peter Hopkins, the council’s director of property and assets, said: “It’s been a really difficult project that the team have delivered and has made a number of residents now safe and compliant in a building that was a death trap before.”

But the overall costs of the repairs – including having a waking watch on the building and the legal fees – spiralled to £33million, a report presented to councillors said.

To help with the renovation, a loan agreement was set up in August 2022 for a £10million loan from the council to GRE5.

This was subsequently increased to £15million in 2023.

A grant from Homes England and the ‘successful’ recovery of an insurance claim against the building’s warranty provider also helped partially fund the works needed at Nova House.

Monday’s cabinet meeting at Observatory House heard that GRE5 has a £5.76million outstanding loan to Slough Borough Council.

Councillors agreed to write £4.5million of the loan off – leaving an outstanding £1.2million balance that needs to be settled by August 2027.

Cllr Smith (Con, Colnbrook and Poyle) said: “This step is required because GRE5 does not have the income or the asset in place to meet the full line of interest payments, and the company’s only ongoing income is from ground rent.

“The gradual write-off therefore strengthens the company’s balance sheet and enables a solvent wind up of the company.”

The 2026/27 business plan for GRE5 also includes a disposal of the freehold and moving towards an ‘orderly winding up of the company’, he added.

“So, in other words, we’re going to sell this company or this block of flats owned by the company,” Cllr Smith said.

The day-to-day management of the building is now the responsibility of the newly formed Nova House Right to Manage (RTM) company.

The meeting heard that the freehold will first be offered to the leaseholders as part of the winding-up process before considering disposing of the company on the open market.