A decision to buy and repair an unsafe town centre block of flats could leave Slough Borough Council almost £3 million out of pocket, a report has warned.

The council bought Nova House on Buckingham Gardens in 2018 in order to replace flammable Grenfell-style cladding and ‘to protect the safety of residents’.

It said at the time it wasn’t confident the building’s previous owners were able to carry out the work, and bought it for a nominal fee of just £1.

But costs soared in the following years to more than £33 million as structural issues were discovered.

READ MORE: Council knew flammable cladding was on Mosaic Apartments building before the fire

And although Slough Borough Council says much of this will be paid for with external funding such as government grants, up to £2.8 of its own money may not be recovered.

Originally an office block, Nova House was converted into flats in 2015. But it failed two separate fire safety inspections in 2017.

It had flammable aluminium composite cladding – the same as that which fuelled the Grenfell Tower fire – on its outside walls.

The freehold was owned in 2018 by property company GRE5. Robert Steinhouse, its director at the time, is currently also the director of 37 other property companies.

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However Slough Borough Council says it had ‘concerns about the capacity and ability of the company, and its existing shareholders’ to replace the cladding and bough GRE5 in 2018.

The council says that while the full extent of the work needed at the time was unknown, ‘costs were anticipated to be less than £10 million.’ It also says it had been ‘assumed’ that it could recover the costs ‘following a legal claim’.

But a series of structural problems were found in the rest of the building between 2020 and 2023 after the cladding and balconies were removed. These delayed new cladding and balconies being fitted.

Costs were reported to have reached £19.6 million in 2022 and are now said to be £33.7 million.

READ MORE: Flammable cladding system confirmed on Slough’s tallest block of flats

Slough Borough Council says GRE5 has enough money to cover this, and that much of this has come from outside the council.

This includes up to £13.5 million from Homes England – a Government body – in grants available to make buildings safe, and an undisclosed sum paid by the insurers of the building’s original warrantee holder.

Some £500,000 is also to be contributed by homeowners in Nova House. However the council has also loaned GRE5 £4.8 million to allow the works to progress – of which some £1.2 million can be repaid.

But including interest, the council says that leaves an outstanding loan to be repaid of up to £2.8 million.

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The council says there is ‘significant risk that not all of the loan will be repayable’.

It says that the company’s ability to repay depends on several factors including the outcome of a legal claim, the possibility that some grant funding may be clawed back, and whether homeowners recover some of their costs.

Leading councillors on the council’s asset disposals committee were set to discuss the report on Thursday November 14.