A cross-party scrutiny committee will this week examine the council's handling of the stalled £5.1 million refurbishment of Draper House at Elephant & Castle.
Work on the project was halted last November after a gas leak left a resident of the 24-storey council-owned tower in hospital.
For the last three months the building – a prominent landmark next to the Strata SE1 tower – has remained shrouded in scaffolding even though no work has been carried out.
Southwark Council announced last week that it had terminated its relationship with the contractor, Breyer Group plc, by mutual agreement.
The Draper House project was just part of a £120 million contract with Breyer signed in 2010 for major works to council homes in Borough, Bankside and Walworth.
Residents of Draper House's 140 homes will now be consulted on whether the works will be passed to a back-up contractor which already has a relationship with the council or retendered from scratch.
Residents of Draper House brought a deputation to council assembly last month after the sudden cessation of work meant that some homes were left with plywood boards instead of windows during the Christmas period.
The works at Draper House included concrete cleaning, removal, kitchen and window installation, new front entrance doors, upgrade of electrics, main entrance refurbishment and internal decoration to communal areas.
Draper House was again discussed by the council's overview and scrutiny committee on 4 February which asked the housing, environment, transport and community safety scrutiny sub-committee to hold a further session on the subject at its next meeting on 25 February.
"It would be a mistake for us to pretend that the only problem has been the very serious incident with the gas leak, because the problems with this contract predate that by months and months and months," said Cllr Cathy Bowman, chair of the overview and scrutiny committee and Lib Dem councillor for Newington ward.
"I've been into residents' flats and the standard of work ... has been very, very poor and wouldn't satisfy many people.
"I would like to know how it can conceivably be justifiable that leaseholders are paying £35,000 for works that no-one round this table would find satisfactory if they had let a contract for works in their own home."
Investment manager Ferenc Morath told councillors that Draper House is "by far the most complicated refurbishment scheme in the borough" – not least because the housing department does not own any of the land around the base of the tower which made it difficult to set up works compounds and scaffolding.
In a report prepared for this week's meeting, the authority's head of major works David Markham admitted that "very basic errors" by council officers in 2011 had compounded the problems with the contract.
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