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Probe into Hackney Council's contractors reveals aggressive pricing, excessive claims and 'dishonourable' culture

PUBLISHED: 17:49 08 April 2019 | UPDATED: 18:43 08 April 2019

Hackney Town Hall. Picture: Ken Mears

Hackney Town Hall. Picture: Ken Mears

Archant

The findings of a probe into the management of Hackney Council's £246m housing contracts will be under discussion tonight, after it was discovered aggressive pricing, excessive claims for works and "dishonourable culture" were "common".

Some contractors working with the council have overcharged for works; proposed to deliver and charge for work that wasn’t needed; falsely claimed work to be complete; and delivered shoddy jobs, according to the council’s own “Living in Hackney” scrutiny commission.

One job in particular – which Lakehouse subcontracted to Polyteck – is under criminal investigation, the report says, after allegations of money laundering and bribery were made following “substantial over-claiming” for fire safety work.

The council has retained “a significant sum of money” under the contract because works that were claimed to have been carried out are still under dispute.

Housing chief Cllr Clayeon McKenzie will be grilled about a restructure within the council last summer, prompted after problems with electrical specialist Morgan Sindall came to light two years ago.

Under an £810,000 contract, the firm was supposed to be doing the jobs the council couldn’t do in-house – but only completed 24pc of the 1,452 repairs it should have done in 18 months. Many jobs had to be redone because of the low quality, and the council had to spend considerable time training up a whole new project management team after the first lot weren’t up to the job.

They were also found to be guilty of “aggressive pricing”, which saw double charging by claiming for works that had already been invoiced for, and claiming for greater amounts of work than appropriate.

When council officers gave evidence to a scrutiny commission set up to look into the matter, it was found that aggressive pricing was a common issue and some providers might under-price to win contracts before seeking to recoup at a later date.

“It was felt in hindsight that some of the prices put forward by Morgan Sindall were unrealistically low,” said Cllr Sharon Patrick, who led the commission into partnering contracts for the delivery of the council’s improved kitchens, bathrooms, roofs and windows investment programme; major works on communal and structural parts of buildings; and services including the maintenance of lifts and door entry systems.

She continued: “The partnering approach was designed to foster trusting and collaborative relationships between contract providers and their clients. Evidence shows this vision to have been idealistic.

“Rather than working truly in partnership with their clients, some partnering contract providers appear to be seeking to take advantage of this approach whilst relying on client representatives not looking too closely at the pricing or invoicing, and on clients not having internal resources to carry out full checks of works.”

In response the council has brought the “clerk of works inspection” post back in-house rather than contracting it out to the international consultancy and construction company MACE. They are supposed to now ensure full sign-off of works before payments are made.

The number of quantity surveyors, who can help ensure the council pays a reasonable price for works, had been cut back from 12 to six, but now more have been employed again. And the role of “resident liaison officer” is now being delivered in-house wherever possible rather than by contractors.

“This will better ensure that resident liaison officers are working fully on behalf of and advocating for residents, and that residents have more confidence in the function,” wrote Cllr Patrick in the report.●

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