A DEAL by City of York Council to rent out a warehouse to builders’ merchants Jewson is to be renewed for another 12 months.

The Press reported in 2008 how the firm was renting the warehouse, situated at the authority’s Eco Depot site off James Street, for just £5 a month in return for a discount to the council on building supplies.

Council chiefs had to tighten up procedures then after a district auditors’ report revealed serious potential flaws, saying the authority did not have adequate controls to be sure that the prices charged by Jewson were in line with those readily obtainable on the open market.

The then Labour group leader David Scott accused the council of “financial incompetence” over the contract, but Coun Andrew Waller, who was the Lib Dem council leader at the time, said it followed ‘national best practice’.

The authority said the arrangement had been recommended by the Office of Government Commerce (OGC), which was also involved in setting up the agreement.

The contract was awarded on a five-year basis, expiring this September, but Coun Julie Gunnell, cabinet member for corporate services, revealed yesterday that Jewson had started paying a commercial rent last April.

And now the arrangement has been extended by officers for a further year until September 2013 to allow for a full review of the service and a re-tendering.

Coun Gunnell said the extended Jewson contract would be for a maximum of 12 months, again for a commercial rent.

“During this period, we will be working up requirements for all service areas so that we can procure a contract,” she said.

She said this task was under way now because a full procurement team had been put in place at the authority since Labour took over the administration last May.