VAT oversight causes day centre fears (From Echo)

VAT oversight causes day centre fears

9:06am Thursday 29th March 2007 in News By Jon Austin

A NEW pensioners' day centre has been thrown into doubt following a "blunder" over costs.

Developers - Lovell Partnership and Mosaic Homes - are allowed to bulldoze the George Hurd day centre in Fauners, Basildon, and replace it with 61 flats, as long a new centre is built in Audley Way.

But now councillors have voted to remove a legal requirement, which forces the replacement development, because of a VAT "oversight".

Councillors at the latest development control committee meeting heard Basildon Council, and the housing association, had "overlooked" the fact the firm would have to pay VAT on the cost of building the replacement centre.

Clive Simpson, head of planning, said the sum concerned - said to be £300,000 - was so significant it would leave the new centre too expensive to go ahead.

Council head of housing Rab Fallon said it was lucky the blunder had been spotted just days before contracts were signed.

Yet Labour councillors remained concerned.

Lynda Gordon, a Lee Chapel North councillor, said: "I find it hard to understand how a company with this sort of experience could fail to spot such an important issue as VAT earlier.They must be used to dealing with this type of contract. Now, on paper, they have permission to go ahead without a replacement.

"We were not given enough information to be able to vote in favour of this."

Sylvia Buckley, Tory chairman of planning, assured it would still be a requirement and new contracts were being drawn up.

She said: "VAT is a very confusing subject and that is why this was not realised earlier. There will still be a replacement built and we hope work will start soon."

The firm was given planning permission back in 2005, but nothing has happened since.