'Off-shore' management companies slated and warned over unadopted roads

Derbyshire’s highways chief has criticised the “offshore” management companies “registered in the Cayman Islands” that are responsible for many roads on new developments.

 In a Derbyshire County Council scrutiny meeting Chris Henning, the authority’s executive director of place – which includes highways – discussed “unadopted” roads.

Unadopted roads are routes for which the county council is not responsible for managing or maintaining and can mean that they do not get gritted, repaired or have street lights installed on them.

They may also not be serviced by bin collection vehicles.

Councillors and residents regularly discuss issues with unadopted roads in planning meetings, the Local Democracy Reporting Service has frequently witnessed.

On numerous new-build estates, roads are not built to “adoptable” standards, often with the routes being deemed too narrow, with maintenance and responsibility for the streets passed over to management companies, and residents paying extra money – on top of existing council tax duties – for the service.

Mr Henning said: “The biggest issue around unadopted roads is developers not building roads on newbuild estates to adoptable standards and then selling them off to an off-shore management company.

“There are lots of occasions where developers know the law closely and do that.

“It would require legislation to change the law to change this.

“It is all about consumer awareness. Don’t buy a house if you are responsible for roads because often the companies responsible for the roads are registered in the Cayman Islands.”

Cllr Gez Kinsella said the management companies need to be “more accountable”.

He said: “It is an absolute disgrace what is happening. Young families that are pouring all of their life savings into a new home are being penalised.”

There are moves to give homeowners in this situation more power to get details over how these management fees are spent, including recourse at tribunals.

The Labour Government committed last year to consider options to reduce the number of private management arrangements on new estates.

Samantha Niblett, South Derbyshire MP, said last month in Parliament that she had been “inundated” with requests for help with housing estate management companies.

This, she said, had included “lack of transparency, poor communication, soaring bills and contracts they cannot get out of”.

She had asked: “Does my hon. Friend agree that it is fine time we saw an end to the fleecehold stealth tax, which effectively forces homeowners to write a blank cheque to management companies for years to come?”

Alistair Strathern, in a debate on unadopted roads in June, responded: “The Competition and Markets Authority identified that up to 80% of new homes are now going unadopted as a result of the practice, and far too often it is becoming the default model for new estate delivery across the country.”