Tories in Hounslow have accused the ruling Labour group of causing a “miasma of failure” in the performance of the company it set up to build new homes.
Ahead of the May 3 local elections , when the Conservatives will be hoping to make a dent in the overwhelming Labour majority, Tory leader and candidate for Chiswick Riverside ward, Sam Hearn, slammed the council’s firm, Lampton 360, saying it was an example of the “incompetence of Hounslow” under Labour.
Lampton 360 was first set up in 2012 with the aim of trading local authority services to make profits which could then be ploughed back into the council's operations - cash that Labour said was sorely needed in the face of government grant cuts.
The firm has been tasked with increasing the supply of homes in the borough. So far no building has been completed, but 844 homes are planned at 15 sites across the area in a joint venture with developers Be Living, while workers have just started laying bricks at Nantly House, a 75-unit block of flats in Lampton Road.
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The company - which has already used up a £1.25m loan from the council for set-up costs - also aims to buy up 175 homes which could be rented out at affordable rates, but so far only seven have been purchased.
Writing a blog post on the conservativehome.com website , Mr Hearn said: “Few things illustrate more effectively the incompetence of Hounslow Council under Labour than the miasma of failure that surrounds Lampton 360 Ltd.
"This company was set up as Hounslow’s trading arm and has with its subsidiaries soaked up millions of pounds and delivered very little.
“Although a start is soon to be made on one site, it has so far failed to lay a single brick."
Of the firm’s private home purchases so far, Mr Hearn added: “With a hit rate like that, Lampton will need to expand its operations by more than 20 times or become far more efficient. This is extremely unlikely.”
But Labour group leader and candidate for Syon ward, Steve Curran, insisted Lampton 360 would deliver in the longer term.
He said: “[This] displays the usual Tory trick of distorting the facts for their own political benefit. There are numerous inaccuracies. Labour has secured 3,000 new affordable homes, including 400 council homes, ahead of schedule during the current administration and building on this success, the council has recently approved a new four-year target to deliver 4,000 new affordable homes by 2022.
"It should also be noted that Mr Hearn does not mention the collapse of Carillion, and that the services previously provided by Carillion - libraries, parks, cemeteries and allotments - have all transferred smoothly to our council-owned companies or directly to the council."
Mr Curran pointed out that Lampton 360 was just one of many housebuilding joint ventures the council was pursuing.
It is also currently working with developers Barratt on a major town centre Hounslow Quarter development of 500 homes, while there are plans for 176 flats on the former Morrisons supermaket site in Hounslow West .
The Conservative group has criticised Labour for its policy of operating council-owned firms because it questions how transparent they are, but Mr Curran defended the policy saying that, if anything, it monitored Lampton 360 too closely.
He said the council had called in a private consultancy firm to look at Lampton 360 and it had recommended the council actually gives it more freedom to operate independently so that it can take the risks necessary to succeed in business.
He added: “They said we were trying to keep it too closely under control, but we want to make sure we get it right for our residents."
But Mr Hearn said Lampton 360 had shown the risks were too great and that taxpayers ended up shouldering the burden.
He added: "So what can we conclude from Hounslow Labour’s foray into entrepreneurial trading activity? Firstly it is not very good at it and the service to residents actually gets worse."
Mr Curran admitted the policy of buying up homes had not worked, saying: “When we got into the detail we found it was expensive and very time consuming."
He said Lampton would now be concentrating instead on buying groups of houses or blocks of flats to try to improve on its target.
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