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A former home for young people with mental illnesses that was due to be sold off by Redbridge Council could be turned into accommodation for homeless families instead.

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Abury House, in Aldborough Road North, Newbury Park, housed nine patients in supported flats to help them become more independent.

It was shut down by the council earlier this year in a programme of cuts to adult social services.

Residents were moved out and it was earmarked for sale for up to £900,000.

But it could now be turned into a hostel for 10 homeless Redbridge families.

The Adult Social Services, Housing and Health Service Committee approved the change at a meeting on Monday but it will not be final until next year’s budget is set.

Committee member Cllr Muhammed Javed said he and fellow councillors were “delighted”.

He added: “This saves the council money and means families have decent accommodation, because we know not all B&Bs are up to standard.”

A report presented to the meeting said there are 2,094 households in the borough in temporary accommodation, which is used in emergencies to keep people off the streets.

More than 220 have been put into B&Bs but rates are going up because of rising demand.

The council spent £26million on temporary accommodation last year and some people can expect to wait more than seven years for a council house on the overloaded waiting list.

Although it would take around £40,000 to convert Abury House into a hostel and annual staffing and running costs would total a further £120,600, it would save the council around £100,000 in B&B bills and other fees.

Ron Jeffries, of nearby Spearpoint Gardens, had campaigned against the closure of the mental health facility.

He said some residents were worried about possible problems from temporary accommodation but were happier after seeing other hostels in the borough.

Mr Jeffries added: “It’s a great success. It’s really good that it will continue to be used to help vulnerable people.”

The four-storey building dates from the late 1800s and was built as a farmhouse before housing an army regiment and nursing home.

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