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Fears are growing that millions of pounds of public money may have been wasted on building work after a tribunal slashed the bill for one estate by 70 per cent.

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Islington Council was over-charged by £1million for work on just two blocks on the Tremlett Grove estate, in Archway, according to a Leaseholder Valuation Tribunal (LVT).

As a result, the charges the council passed on to 14 leaseholders in Brennand and Merryweather Houses have been dropped by around £16,000 apiece – and the ruling could pave the way for many more across the borough to contest their bills.

This shortfall and the remaining £775,000 overcharge may have to come from the public purse.

Some work on Tremlett Grove was done as part of the Decent Homes Programme (DHP), a £600million scheme to improve council housing. If the council has been overcharged on other parts of the programme, millions of pounds of taxpayer money could have been wasted.

The hearing in January heard that roof costs were estimated without proper inspection, windows were replaced based on rotting frames at different properties and asbestos panels were disturbed unnecessarily.

Judy Granville, 61, one of the leaseholders who brought the action, had her bill dropped from £28,500 to around £12,000.

She said: “I felt faint when I got the bill. It’s a life changing amount of money. We all took a massive gamble trying to take them on, so I am really relieved and pleased how it turned out. I urge other people to take heart and challenge unfair costs.”

Brian Potter, chairman of the Islington Leaseholder Association, said: “This report is damning and shows leaseholders being ripped off. The big news is the millions the council could have overpaid. Are they going to claim it back?”

A council spokesman said: “We are carefully considering the LVT decision before taking any further action. It’s vital for both council tenants and leaseholders that Islington’s housing is kept in good repair, at a fair price.”

The council was unable to say whether the same contractors were used across the DHP.

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