Former housing chiefs in Hounslow accused of plundering potentially millions of pounds worth of public building materials will avoid legal action, it has emerged.
Two employees were sacked from Hounslow Homes and one resigned amid allegations senior staff stole materials and used publicly funded staff for private work.
But the Crown Prosecution Service announced in October there would be no criminal proceedings due to a lack of evidence, and Hounslow Council's top lawyer last night said it would not pursue a civil court case against the suspected culprits.
Richard Gruet, assistant director of corporate governance, told members of the council's audit committee such action was not seen as a 'useful use of resources'.
"The standard of proof required for criminal proceedings is higher than for civil matters," he said.
"However, evidence is required and the view that was taken is that it wasn't seen as a useful use of resources to chase this down through civil action, in terms of the amount of work and the potential amount that might be recovered."
getwestlondon last week revealed how a heavily redacted report into the alleged wrongdoing suggested a culture of bullying and sexual harassment within the arms length management organisation meant staff had been too afraid to speak out.
The dossier claims bosses, whose names are blanked out, had been helping themselves to building materials from Hounslow Homes' stocks since as far back as 2005.
It also accuses them of giving jobs to friends and family, and failing to declare corporate jollies at Twickenham Stadium.
Based on the amount spent on stock, it suggests, a conservative estimate for the value of stolen goods would be in the region of £900,000, though the true figure is believed to be much higher.
That's on top of the value of private work carried out by Hounslow Homes staff, which the report says was worth at least £58,000.
The alleged corruption was eventually exposed by a whistle blower in June 2013 and an independent investigator was appointed by Hounslow Homes.
But the matter was not referred to the police until November 2013, giving those implicated plenty of time in which to wipe potentially damning emails.
Councillors on the audit committee last night demanded to know how the alleged corruption had been allowed to continue unchecked for so long.
They also sought assurances measures are now in place to prevent a repeat as Hounslow Homes is wound up, with housing services coming back in house from the new year.
Although Hounslow Homes' accounts were subjected to external audits, it emerged these were based on figures provided by the housing association itself.
Given the investigation indicated Hounslow Homes routinely manipulated figures, Councillor Mukesh Malhotra criticised this system as a 'historic failing'.
Council officers insisted there had been significant changes to senior management at Hounslow Homes in the wake of the allegations, and controls on expenditure had been tightened.
They also said a number of internal audit reviews had been carried out since the corruption allegations surfaced, including a fraud risk assessment, though the findings were not provided to the committee.
The council says it is working closely with staff at Hounslow Homes to ensure a smooth transfer of services between now and next March.
This work includes a review of all Hounslow Homes procurement decisions, the integration of IT systems and improvements to reduce the amount of time properties are left sitting empty.
HOW MUCH DID ALLEGED FRAUD AT HOUNSLOW HOMES COST THE PUBLIC?
Although the report says a lack of proper record-keeping means an exact estimate of the cost is difficult to make, it does attempt to provide a figure.
It says the value of materials held by Hounslow Homes rose to at least £6.5 million at its peak, which was 39 per cent of the organisation's £16.7m turnover that year.
Given the industry best practice figure for the value of stock as a percentage of turnover is around 25 per cent, that suggests some £900,000 was misappropriated by staff.
The report goes on to suggest the amount spent on materials was 'actually substantially higher' than £7m. Given the theft is believed to date back to 2005, this suggests the true figure could easily run into millions of pounds.