A probe into the end of a Salvation Army contract for homelessness intervention in York has sparked a row over how the affair was handled.

A City of York Council report said talks about the future of homelessness services should have started earlier and not enough attention was paid prior to the contract’s September 2023 end date.

Opposition housing spokesperson Cllr Darryl Smalley claimed the public were misled after officials said there was technically no conflict of interest requiring Labour’s Cllr Michael Pavlovic to step back from the process.

But the council’s Labour Deputy Leader Cllr Pete Kilbane said allowing Cllr Pavlovic to remove himself was right to ensure public confidence and to err on the side of caution.

Cllr Darryl SmalleyCllr Darryl Smalley

It comes as Charles Malarkey, of the Salvation Army, told the council’s Audit and Governance Committee they were still offering drop-in sessions to rough sleepers in York.

The committee heard a raft of issues affected discussions with the Salvation Army in the run up to the contract’s end.

The contract, worth £675,273 over several years, began in 2018 in response to a law instructing councils to tackle homelessness and paid for charity workers to check on and offer help to rough sleepers.

It was extended for six months in March 2023 under the Liberal Democrat-Green coalition administration and the council’s report stated the decision had been properly taken by officers.

Discussions about what to do after the contract’s end began in late August 2023 and continued into September after the city's new Labour administration was advised Salvation Army services were no longer needed.

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Work on the council’s in-house Navigator service, established to get rough sleepers into homes long-term, had been ongoing while the contract was in place.

But another council report in February 2024 stated that despite the Salvation Army being informed of the upcoming end to the contract in regular meetings, the management of expectations became difficult.

It added Labour’s housing executive member Cllr Pavlovic became unhappy about the end of the contract before citing a conflict of interest and removing himself from the process.

The Salvation Army wrote to council leader Cllr Claire Douglas asking for clarity on the future of services in mid-September last year and proposed a further six-month extension.

The matter had been passed to Cllr Douglas and finance executive member Cllr Katie Lomas who decided to offer a final one-month extension due to the late confirmation.

A council response was sent to the Salvation Army on Monday, September 25 last year, with the offer of the one-month extension.

But a major IT outage at the Salvation Army and staffing issues meant they received it on Thursday, September 28.

They responded the following afternoon saying they had too little time to agree and although meetings took place the following week the contract had legally expired.

Liberal Democrat housing spokesperson Cllr Smalley said the handling of the affair had been a fiasco, damaging the council’s reputation, and Cllr Pavolic had run away from the decision.

His group has also lodged a standards complaint alleging that Cllr Lomas misled the public over Cllr Pavolic’s conflict of interest and by claiming the previous administration broke procurement rules.

Cllr Smalley said: “Cllr Pavlovic abdicated his responsibility as the council’s housing chief and must now explain why.

“Cllr Lomas must apologise or resign for misleading the public over this whole affair, the public deserves politicians that are accountable for their actions.”

Labour’s Cllr Kilbane said his ruling group refuted what he claimed were overblown allegations from the Liberal Democrats.

Cllr Pete KilbaneCllr Pete Kilbane

He added they were resorting to personal attacks and were using the complaints process as a political weapon.

The deputy leader said: “This particular case is little more than a storm in a teacup over one councillor saying another councillor colleague had a potential prejudicial interest, which was accurate.

“We take the declaration of interests seriously and will always err on the side of caution if we think the public would perceive a possible conflict, it is important that the public have confidence that they have no personal prejudicial interest in the decision.”