A nursery occupied a Reading Borough Council (RBC) building for seven years without paying rent or agreeing a lease.

Stepping Stones Pre-School stayed free of charge in the Dunsfold Road, Tilehurst, building from 2011 and 2018.

Claire Fullbrook, who manages the nursery,said: "Stepping Stones Pre-School has been trying to enter into a lease with RBC since the day we moved into the building but to no avail, constantly being told the matter would be dealt with by the RBC legal team.

"We are now paying a substantial amount of money in back pay to cover building costs, utility bills, taxes, etc."

RBC  agreed a two-year lease with the nursery in Autumn 2018, covering ongoing rent, service charge requirements and the repayment of arrears.

An internal review found that officers were ‘reluctant to start evictions proceedings’ due to the important service the nursery provides.

Officers also assumed that the nursery couldn’t pay a commercial rent because they hadn’t submitted a business case or audited accounts.

However, the nursery has had a sufficient surplus cash balance since 2014, according to the council.

RBC has now agreed a two-year lease with the nursery in Autumn 2018, covering ongoing rent, service charge requirements and the repayment of arrears.

The council is considering options to renovate the existing building and enable a longer term letting to the current nursery provider, as well as marketing of the vacant space.

An RBC spokesman said: “The nursery provides an important service in an area of need and the council wanted and needed to support their work at the same time as ensuring a fair rental income to the council.”

The review, from the internal audit team, found that there was a lack of strategic oversight, and conflicting priorities between services.

Issues with the completeness of the council's property records and its ability to identify gaps in the information it holds were also found.

RBC's valuation team ‘appears stretched and under resourced’, according to the review.

Stepping Stones is a charity-based preschool which has been running for over 45 years and received a ‘good’ rating in its last Ofsted review in 2017.

Claire Fullbrook, who manages the nursery,said: "Stepping Stones Pre-School has been trying to enter into a lease with RBC since the day we moved into the building but to no avail, constantly being told the matter would be dealt with by the RBC legal team.

"We are now paying a substantial amount of money in back pay to cover building costs, utility bills, taxes, etc."