An MP has today slammed the UK's third-largest affordable housing provider for a "frightening" report which led to a £170,000 repayment based on massive overcharging on repairs to Merton homes.

From Monday: Circle Housing Merton Priory repaid £170,000 by repair contractors after systematically overcharging for repairs to Merton homes

Wimbledon MP Stephen Hammond made the comments in response to the findings of an independent investigation into a £220m five-year contract between Circle Housing Merton Priory (CHMP) and contractors Keepmoat Property Services.

Property investigators Savills uncovered evidence of repeated overcharging for repairs, post-inspections not being carried out, and payments being "batch-authorised", a report published on CHMP's website revealed this week.

But the "not-for-profit" 9,500-home property group, which is a subsidiary of housing giant Circle Housing, said no evidence of fraud was found and that only properties occupied by social housing tenants were affected.

That means residents who claim to have been hit in the pocket - several of whom the Wimbledon Guardian has spoken to - will not be refunded unless they come forward with their own evidence of overcharging.

Mr Hammond said: "It is appalling that it required an outside investigation to bring this to light and that a comprehensive procurement and contract management system was not in place.

"Whilst I am pleased that Savills have concluded there was no fraud, it is frightening that any organisation can overcharge by such a degree, and equally frightening that CHMP had no checks in place to stop this happening."

The investigation was commissioned after a whistleblower who had worked in the housing association's Morden headquarters contacted the Wimbledon Guardian in August last year alleging contractors were overcharging for work.

Mr Hammond said he was "cautious" about findings that leaseholders, who have to pay out of their own pockets for repairs to their homes, were not affected.

Many leaseholders live in blocks of flats shared with tenants and repair costs are added to service charges and divided between residents.

Circle Housing executive director Deborah Upton told the Wimbledon Guardian last week that any leaseholders who believed they had been overcharged for repairs could request a post-inspection and would be repaid if they had been unfairly billed.

But she said she was confident that no leaseholders had been overcharged.

Wimbledon Times:

'Concerned': MP for Mitcham and Morden, Siobhain McDonagh

Mitcham and Morden MP Siobhain McDonagh, who has previously said she felt like she "works for CHMP" due to the number of complaints she receives, also responded with concern to the report.

She said today: "The findings of the Savills report are concerning – every penny of Circle Housing’s funds should be used to provide good quality homes to residents and I hope procedures will be put in place so this doesn’t happen again."

Keepmoat has since paid back the money to CHMP's repairs and maintenance department. It has also significantly reduced the number of sub-contractors it uses to carry out repairs, Ms Upton said.

She said CHMP has implemented a "catalogue of improvements" to the way it works and Savills had been commissioned to create a new billing system.

The report comes after the government housing watchdog downgraded Circle Housing's rating in April after an investigation into its repairs services in Tower Hamlets found less than 20 per cent of emergency repairs were completed on time.

Circle Housing manages 64,000 homes across the UK, most of which are former council properties which have been transferred to the housing group.

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