Cornwall Council has explained why it is having to spend an extra £750,000 turning a former St Austell pub into flats - having already spent £1million buying the building.

The council purchased the former General Wolfe building in the town centre last summer.

The former pub, which is a Grade II listed building, had previously been converted into housing, having been used as a toy shop after it closed as a pub.

The council bought it last year with a view to using it to provide temporary accommodation for homeless people.

However there have been questions asked about the amount of money the council paid for the building and a suggestion that it had been overvalued. At a meeting of Cornwall Council’s Cabinet this morning Olly Monk, Cabinet member for housing, clarified the issue in response to a public question.

Cllr Monk said that the council had been approached by a vendor seeking to sell the property for £1.1m and said that the council undertook a valuation which factored in the rental value of the property. As a result of this the council made an offer of £1m on behalf of the council’s own housing association Cornwall Housing.

He explained that the council wanted to use the building to help with its programme of providing more temporary accommodation after seeing the number of households needing emergency housing rise from around 250 to more than 700.

Cllr Monk said that the General Wolfe building was bought as it was already being used as flats and could be brought up to standards and help provide housing for people.

However, he explained that “the conversion became financially unviable” and said that the council wanted to address this with an injection of capital funding, which has now been provided through money from central government.

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The Government has provided £750,000 which will be used to carry out the required works on the General Wolfe. The cash is part of £7m which has been provided for housing provision as part of the Cornwall Devolution Deal.

However, the Cabinet meeting heard that the money was being provided as it was time limited and would not require the acceptance of the Cornwall Devolution Deal to be provided.

A report to Cabinet explained that the £750,000 would help to allow 13 flats to be used and would be “enabling a prominent site in St Austell town centre to be refurbished from its current derelict state”.

The report states that the flats would be affordable accommodation for local people.