Lambeth Council has terminated its contract with troubled housing maintenance contractor, Connaught.

The council’s cabinet had planned to extend the maintenance giant’s contract with the town hall to provide repairs to its 34,000 social housing stock homes and bring its empty homes back in to use.

But the company called in administrators KPMG on Tuesday, September 7, after lenders refused to give it more money.

Some 24 stff working on repairs and the empty homes service were sacked in Lambeth on Friday.

Connaught was supposed to continue providing services while in administration, but the cabinet took the decision to step in and cancel the contract.

A spokeswoman for Lambeth Living, the company managing social housing in the borough, said: “Morrison will take over Lambeth Living’s housing repair contracts from Connaught immediately.

This follows last week’s announcement that parts of Connaught had gone into administration.

“Lambeth Living and Lambeth Council have been monitoring the situation closely, and despite the administrators still being required to provide a service, decided to step in to ensure residents’ services do not deteriorate.

“The transition between Connaught and Morrison is seamless, as Morrison already provides a number of housing repair services in Lambeth.”

Lambeth Council rejected the chance to offer the contract to Mears, the company that had bought out Connaught's existing contractwith Lambeth Council -worth more than £4.5m -for £1.

Lib Dem opposition leader, Councillor Ashley Lumsden, blamed the “mess” the Lambeth Living repairs service found itself in on “poor planning by the Labour administration”, which left it having to renew large numbers of contracts at the last minute, despite knowing about Connaught’s difficulty for some time.

Conservative opposition leader accused Lambeth Living and Lambeth council of "sleepwalking" in to the problem of having to switch repairs contracts, by not keeping better tabs on Connaught's financial problems.

He questioned if Lambeth Council had properly checked if Morrison would be ready to take on the repairs responsibiilities for an extra 8,000 homes without a drop in service quality for tenants.