West Dunbartonshire Council are to pay thousands in penalties after agreeing to withdraw from their Block Building Insurance Scheme following resident backlash.
Begrudged homeowners who saw their building insurance bills rise by up to 50% will now be able to precure their own private insurance policy after a landmark decision.
The current scheme administered by the council for residents who have bought their home from the local authority will end in March 2026.
4,474 resident who bought their home from West Dunbartonshire Council between 1987 and 2016 have had to procure their building insurance through the local authority.
74% of these affected residents are in Clydebank.
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A paper presented to councillors today recommended the council continue the three year insurance contract after fears a £2.5m penalty could be incurred by leaving early.
However, after it was confirmed the day of the meeting that the true penalty sum is significantly smaller and is actually a fee of £189,933, council leader Martin Rooney presented a motion asking for councillors to agree the early withdrawal from the scheme.
The penalty is set to be paid by the council's reserves.
During the meeting, Laurence Slavin, chief officer of resources, said: "At the time of writing the report we had been told the council was committed to paying the insurance provider a £2.5m penalty. However, it has been confirmed the penalty would not be to this scale.
"For me, it changes our position.
"The insurers have advised us of the possibility that homeowners could face even higher premiums on private market.
"The council do offer payment arrangements, that residents may not get from private market."
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Presenting his motion to the meeting, council leader Martin Rooney, said: "Homeowners could face higher individual premiums and there is a risk some owner occupiers.
"They wanted to know whether could could withdraw scheme and allow them to obtain own insurance.
"This motion allows us to withdraw not in 2028 but in march 2026."
The motion was agreed for early withdrawal in March 2026.
In addition to the approval, councillor Michelle McGinty, raised concerns about the way the price hike was communicated to residents.
She said: "My biggest concern is lack of transparency of how we came to a decision. Residents were not aware they were going to face this large hike. What learning is there and how did we get to this position?
"If we withdraw from this scheme there could be risks. We have heard clearly from [residents] that they think they will get cheaper premiums outwith us.
"If we had this transparency, we might not have had concern and upset from them."
Laurence Slavin, replied: "They are all fair points, we addressed this last time and I provided assurance then, any area where there is to be extension, that is a lesson learned for us on how to communicate in future."
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