Southwark Council and Breyer Group agreed to ‘mutually conclude’ the deal after a gas leak in a block of flats.
The incident at Draper House in Elephant and Castle, which resulted in one female resident being taken to hospital, occurred last November. The woman was released later the same day.
Following the gas leak, work was suspended on the site while Breyer began negotiations with the south London council over the continuation of the five-year ‘partnering arrangement’.
Ian Wingfield, cabinet member for housing at Southwark, said the gas leak was ‘a material breach’ of Breyer’s contract but added that Draper House residents had already raised concerns over the company’s performance.
‘There was clearly a lack of communication between the contractor and residents and this contributed to a major breakdown in trust and confidence,’ Mr Wingfield said. He added that the council approached Breyer ‘on several occasions’ to discuss these concerns before last November’s leak.
In a report due to be given to Southwark’s housing scrutiny committee on Monday, the council has admitted it ‘has not been able to be open with residents, councillors and other interested parties’ about these negotiations while they were ongoing. They ended this month with the two parties mutually agreeing to conclude the contract.
The council will now consult residents over whether to appoint backup contractor A&E Elkins or retender the contract.
The report highlights a number of management failings by Breyer since the contract began in September 2011.
A Breyer spokesperson said: ‘We are surprised that a representative of Southwark has used these words in respect of our mutual agreement to conclude the contract.’
In its 2011/12 financial statement, Breyer admitted it had suffered ‘a difficult year’ after reporting a pre-tax loss of £959,000.