POLICE have told council bosses they will not investigate after contractors overcharged the council by £300,000, leaving taxpayers out of pocket.

A plastering company has been banned from working for Brighton and Hove City Council after overcharging on council housing repairs over a 17 month period.

Unions and councillors have called for a criminal investigation but council officials have been advised by Sussex Police that the issue is currently only a civil matter.

Council contractor Mears, who subcontracted the work out to the unnamed plastering firm, have given a written agreement to the council to pay back the funds.

The Argus first revealed in November that the council was investigating claims of overcharging but the scale of the scandal has now been revealed to be double the original £150,000 estimate.

As well as the council, a number of leaseholders were also overcharged but they will have to wait until April for a refund.

Mears has now brought in new measures including a review of charges by other sub-contractors, a new management structure including a new quality assurance manager and a new recording system including taking photographs of work for council officers to inspect.

The firm has also agreed to carry out more work themselves instead of using contractors.

Suspicions of overcharging were first raised in May by the council’s contract compliance team following an increase in site inspections which began three months earlier.

Councillor Mary Mears, Conservative housing spokeswoman, said it was déjà vu for the council - who were victims of a similar scam in 1996.

She added: “The report has been going on for 17 months so why wasn’t this noticed sooner?”

A UNISON spokesman said he was "very surprised that there hasn’t been a police investigation.

“We have always had concerned about a lack of oversight and expertise within the council when dealing with this sort of big contractor, you need someone with private sector expertise who knows the tricks of the trade.”

A Brighton and Hove City Council spokeswoman said it was hoped the money could be paid back “as soon as possible” but deciding a final amount was a complex calculation which was still being finalised.

She added: “The sub-contractor involved with the overpayments no longer works with Mears and we’re now working with Mears to strengthen processes and procedures to prevent any re-occurrence.

“A follow-up audit will also be carried out in the next financial year.”