DUDLEY Council has backed out of a deal to sell a former leisure centre for housing.

The deal, for the site on Wellington Road, was announced by the council’s Conservative  leader, Cllr Patrick Harley and buyer, Stourbridge businessman Amarjit Dhanda, in March.

Doubts about the deal lingered and Labour’s finance spokesperson, Cllr Shaukat Ali, called for an investigation into why the details were made public before a legal due diligence process had been completed.

In a meeting of the council in April, Cllr Harley revealed the deal was worth £1.65m however the authority has now confirmed it will be putting the site back on the market.

Balvinder Heran, deputy chief executive at Dudley Council, said: “While it is correct to say the council had agreed in principle to the sale of the site at Wellington Road, the local authority did not enter into any contract and therefore made no legally-binding commitments.

“Documents and items of information were requested from the proposed purchaser which we must have as part of our legally required due diligence.

“These were not provided within the timeframe stipulated, despite an extension being granted.

“As a result, the decision was taken to withdraw from the proposed sale. The council will be remarketing the site in due course.”

Cllr Ali said: “Rather than having money in the coffers we have more questions. I expect a report at the audit committee giving full details.

“There are massive issues around governance, it appeared we were making decisions before going through the proper process.”

Cllr Ali also accused Cllr Harley of making the announcement before May’s local elections to boost his party’s chances of winning more seats in the council chamber.

Cllr Harley dismissed the claim by highlighting bigger proposed regeneration projects in Dudley town centre.

He said: “If I wanted votes I would have spent three weeks going on about the ice rink, not 100 houses on a plot of land.”

He described the collapse of the leisure centre deal as ‘a shame’ and insisted the council has to accept the conclusions of its lawyers and accountants however he added there may be lessons to learn.

He said: “Perhaps there should be no deal in principle until due diligence has been completed, maybe for the top three bidders.”

Mr Dhanda, from development company Wellington DLC Ltd, said: “The council’s claim that we failed to provide documents and information within the timeframe is simply false.

“The contractual deadline to exchange was 07/05/24, and our solicitor confirmed in writing on 02/03/07 May 2024 that we were ready to exchange with all necessary financial assurances and documentation furnished well before the agreed exchange date.

“On multiple occasions through early May, we legally requested to proceed with completing this £1.65 million investment, which the cash-strapped council turned down without justification.

“We have submitted comprehensive evidence to the auditors Grant Thornton and requested a thorough investigation into the council’s conduct during this failed transaction as part of their ongoing audit.

“Upholding ethical governance standards is paramount and we welcome any impartial scrutiny into this deeply concerning situation.”