HOMEOWNERS face an extra annual payment of hundreds of pounds under a new tenement repairs plan by one of Scotland's largest councils as it scraps its previous scandal-hit service.

Edinburgh City Council's Property Conservation Department, currently under investigation amid claims owners were overcharged for Statutory Repair Notice work and billed for work that was either not needed or not done, is to be replaced and options will be debated next week, a report revealed yesterday.

The proposal for a factor service means homeowners would pay an annual fee to cover future repairs in tenements.

It was also revealed the council is owed £27 million from homeowners for repairs that have been carried out since 2009 and for which the council has already paid contractors, and it is estimating about £6m will never be paid back to the council.

It is thought part of the problem was that unnecessary repairs notices were served.

A second report to go before the council next week reveals that only 46% of non-emergency statutory repairs notices issued in 2009/10 were carried out, adding pressure to the system and creating a backlog.

There are currently 20,000 properties that have been served with Statutory Notices that have not been enforced in the city. It was suggested some homeowners may consider they are paying for the council's mistakes if the replacement for the failed Property Conservation Department requires people to pay an annual fee for a factor – that it is estimated could reach hundreds of pounds – in preparation for potential future repairs.

Labour Councillor Ewan Aitken said: "We have to watch the pendulum does not swing too far the other way so that too much onus is put on owners and repairs are not done as a result. It is a horrendous situation they [the council] have created."

Fifteen people have been charged in connection with a wider police inquiry into the council's property services department, but were not linked directly to the Statutory Repair Notice investigation.

They were charged in connection with corruption, fraud and money laundering allegations.

The council said it wants a complete overhaul of how it deals with the issuing of statutory notices following the serious allegations about how the system has worked.

Alasdair Rankin, finance and resources convener, said: "While we understand the benefits that the previous system, when working properly, had to some property owners, the circumstances in which the Council intervenes on maintaining private properties needs to be much more under control."