Southwark Council has been criticised after a review revealed that quality assessments were not properly conducted during the tendering process for major works projects on three estates.
The Housing Scrutiny Commission met on Monday to discuss the findings of an internal Task and Finishing Team (TFT) review and independent external reviews by Pellings into major works on the Canada Estate, Fair Street/Devon Mansions, and Kirby Estate.
The review, detailed in the 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
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The TFT internal review also found that contracts were not always formalised before work commenced, and that contract variations exceeding £100,000 were allowed without formal approval via a Gateway 3 report. Concerns were also raised about the effectiveness and accountability of external consultants acting as Contract Administrators (CAs). The CA's responsibilities include:
- reviewing the initial scope of works and producing a bespoke Feasibility Study to ensure the project delivery meets the QHIP objectives and criteria.
- preparing specifications and other relevant documentation required for the procurement and subsequent administration of the works.
- preparing monthly valuations for payment to contractors for works completed each month.
- ensuring that the quantity and quality of the work undertaken and reported by contractors as complete, is acceptable and to the required standards.
- ensuring that there is adequate and appropriate labour on site to ensure that works progress regularly and diligently.
- recording and reporting all delays on the Risk Register, identifying the reasons for, and owners of these delays, and subsequent risks.
- capturing and assessing changes to the scope of the works including presenting their impact in cashflow forecasts and reports.
- monitoring, managing, and reporting on the contractor's performance including, matters relating to health and safety.
- monitoring, managing, and reporting on all statutory matters included in the scope of the works.
- issuing any 'Pay Less Certificates' (reduction in payment for poor works) and Default Notices (early warning of failures in service delivery such as poor workmanship or the provision of insufficient labour to complete the project on time).
Issues were also identified with the quality of replacement windows, particularly regarding compliance with regulations and installation standards. The new windows needed to comply with the provisions of the specification and Building Regulations. The specification requires that the windows are fitted in accordance with the British Plastics Federation 'Code of Practice' and to BS 8213-4. It should be noted that all replacement glazing falls within the scope of the Building Regulations.
Communication breakdowns between residents and the council's project team were also noted as a recurring problem. The relationship was often described as challenging and tense, leading to breakdowns in communication.
Ryan Collymore, Director of Repairs and Maintenance, submitted a management response to the TFT and Pellings reports, outlining actions taken to address the identified issues. The response included an action plan with target dates for completion. The
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Specific recommendations made by Pellings in its reports relating to leaseholders were also addressed in the management response. The Director of Repairs and Maintenance stated that leaseholders should only be recharged their fair and proportionate cost of works and services that have been delivered and completed to the required standard, as set out in the terms of their respective leases. The cost of remedial works would not be recharged to leaseholders, and the provisions of the contract would be used to recover any 'unjustified' additional costs.
However, the management response also stated that the recommendation that leaseholder recharges are only issued once works have been fully delivered and independently verified is not in accordance with the council's current processes and procedures and, as such, is not something that the council can commit to at this stage.
Currently, the Council makes a reasonable estimate of the cost of the works that will be payable by the leaseholder before the commencement of each year and, the leaseholder is required to pay the Council in advance on quarterly payment days. This process is in accordance with Section 19 of the Landlord and Tenant Act 1985 (as amended) and, is provided for within the conditions of the lease.
The Pellings recommendation has merit especially, in that it would reduce contention that leaseholders are paying for works that are either incomplete or, not up to the required standard. However, implementation of the recommendation may have significant financial implications for the Council (especially, potential pressure on the HRA).
The council will review its current position in relation to leaseholder recharges for major works to assess the impact of implementing the Pellings recommendation and whether it is a viable alternative, with a target date of 31 March 2026.