Southwark Council's Housing Projects Plagued by Cost Overruns and Poor Quality, Review Finds

Southwark Council's Housing Scrutiny Commission has reviewed major works projects on the Canada Estate, Fair Street/Devon Mansions, and Kirby Estate, revealing significant cost overruns and concerns about the quality of work. A report presented to the commission on Monday, 28 July 2025, highlighted failures in procurement, contract management, and communication with residents, prompting a call for improved processes and greater accountability.

The review focused on projects completed under the Quality Homes Investment Programme (QHIP), with internal and external reviews conducted by the Task and Finishing Team (TFT) and Pellings, respectively. The Public Reports Pack included the Outcome of the Review of the Canada Estate 2017/18, Fair Street/Devon Mansions 2018/19 and Kirby Estate 2018/19 QHIP Major Works Projects report, which summarised the findings and recommendations of the TFT and Pellings following reviews of major works projects.

Key Findings

The Task and Finishing Team's internal review identified common issues across the three projects, including:

• Procurement: Tenders were often awarded based on price alone, without a proper assessment of quality. According to the report, For these projects however, the quality aspect of the tender analysis was a simple 'pass or fail' assessment based on method statements submitted by the tenderers.
• Contracts: Contracts were not always formalised before work began.
• Gateway Process: Contract variations exceeding £100,000 were permitted without formal approval.
• Communications: Relationships between residents and the council's project teams were strained, leading to communication breakdowns.
• Stock Condition Data: Inadequate stock condition data affected the accuracy of feasibility studies. To address this, the council has commissioned a new four-year housing stock condition survey, scheduled for completion in March 2029.

Specific findings for each estate included delays and cost increases on the Canada Estate, failure to achieve practical completion on Fair Street/Devon Mansions, and quality issues with window installations on the Kirby Estate.

Pellings' independent external reviews corroborated the TFT's findings, highlighting significant cost overruns, programme delays, and quality concerns. Their recommendations included ensuring full design and scope lock-down pre-contract and mandating resident engagement prior to construction up to RIBA Stage 5.

Management Response

Ryan Collymore, Director of Repairs and Maintenance, submitted a management response outlining actions taken to address the identified issues. The response included an action plan with target dates for completion.

Recommendations

The TFT made several recommendations to address the identified issues, including:

• Improving the procurement process to include a true assessment of quality.
• Ensuring contracts are formalised before works commence.
• Adhering to the Gateway process for contract variations.
• Reviewing consultancy contracts to ensure consultants are held liable for their failings. This may involve a formal contractual default process or another legally binding agreement. The aim is to ensure consultants cannot claim fees against the cost of additional works arising from their own failings.
• Improving communication and consultation with residents.
• Undertaking skills appraisals of staff responsible for managing major works projects.
• Basing future projects on robust stock condition information.

The Housing Scrutiny Commission will monitor the implementation of these recommendations as part of its work programme for the 2025-2026 municipal year, as detailed in the Agenda frontsheet.