Investment secured for Brockley council homes

This is something of a formative moment in the history of Brockley Central - an article written by someone with a working knowledge of their subject.

Thanks goes to Kate, who writes one of the area's most entertaining blogs by night and is a proper, salaried journalist by day.

Social housing is a subject with less instant appeal than takeaway pizza, but is important to the future of Brockley nonetheless. This deal with Lewisham Council is one that has been covered by other bloggers, but Kate's article provides a detailed explanation of what's going on.

Investment on the cards for Brockley’s council homes

Lewisham Council has signed a £296 million deal to do up nearly 2,000 council-owned homes in Brockley.

A group of private sector companies is going to refurbish the council’s housing estates and street properties, including homes owned by leaseholders.

The deal uses the Private Finance Initiative, a controversial way of funding major public sector building projects.

PFI works by using private companies’ cash to build public sector facilities. A consortium of private companies uses their financial assets to create or refurbish a public sector project, and then maintain it over the long term – usually PFI contracts last for 30 years. But the public authority, for example a council, then has to pay back that investment over the long term.

The commissioning authority sets performance targets which the consortium must meet in order to receive its full monthly payments. At the end of the contract, the buildings belong to the public authority involved.

In the case of the Brockley refurbishment, the contract will last 20 years and the consortium is called B3.

The lead company is Regenter. Construction company Higgins and management company Pinnacle are also involved, and it’s funded by Japanese bank Sumitomo Mitsui.

It’s taken four years for the deal to get off the starting blocks, which isn’t unusual in PFI. Deals are often held up for years because of contractual wrangling between the commissioning public body and members of the consortium.

B3 has already taken over day to day management of properties on a small scale, and full services will begin in September. The homes will be bought up to the government’s decent homes standard within the next three and a half years; this will include the installation of new kitchens and bathrooms where necessary.

B3 will also be responsible for housing allocations, neighbour disputes, rent arrears, and caretaking on estates. It will work out of a new housing office on Mantle Road where tenants can pay their rent, report repairs and discuss the programme of works.

The consortium will be contacting tenants to let them know about the refurbishment schedule. Leaseholders will be asked to contribute to the cost of the works, but their maximum contributions will be capped. The consortium will notify leaseholders in advance about any proposed works.

The council will retain its ownership of the properties and so tenants’ rights, including the right to buy their property, won’t be affected.

NB. This has already been covered by the Green Ladywell blog:
http://greenladywell.blogspot.com/2007/06/brockley-pfi-signed.html
And here’s a PDF that the council has sent to tenants:
http://www.lewisham.gov.uk/NR/rdonlyres/A616FED0-3607-4E2A-8A7F-C8B5F8DEA2D6/0/BrockleyPFINewsIV_June07_final.pdf


9 comments:

Elijah said...

Interesting read. Hopefully along with the enormous bills and debt will also come some imporvement.

Well done Kate!

Anonymous said...

As a leaseholder, and first-time buyer who has just moved into Brockley/Lewisham, this project leaves me rather nervous...

Hopefully the bills won't be too steep, though, and I'm heartened that the costs will be 'capped' (although a max of £10,000 over 5 years is still rather a lot, n'est pas?).

Anonymous said...

It's time for Brockley PFI leaseholders to WAKE UP!! You have every reason to be nervous. We're leaseholders in the Brockley PFI area and we've just received a section 20 notice of the major works planned for which we'll have to pay a share. For our house (classified as a block of 2 flats) we're facing professional fees of over £7000 and scaffolding costs of nearly £5000 before any work of any description is done. Remember that there around 600 leaseholders in Brockley PFI - not all are in streets but even so why does it cost £7000 per house for professional fees? Is this value for money? Reading the small print of the section 20 notice, It seems that Regenter will be passing on costs of renting office space and employing its staff to Lewisham leaseholders and we need to be questioning this as widely as possible and campaigning against it. We've also read in a Lewisham Council report of the scrutiny committee for Housing, that there are plans to massively increase leaseholders service charges to claw back the ongoing costs of the PFI project. The figure we've seen is £750 a year per leasehold in Brockley PFI-it's not clear whether this will be applied to everyone regardless of what services they receive. At the moment we pay £100 a year so this is a MASSIVE increase! Suggest leaseholders respond to all correspondence, lobby their councillors, MPs and the Mayor to ensure that the worst excesses of this project - funded by a Japanese bank and 3 companies that are all shareholders of each other - don't take us all for a ride. Look beyond the glossy websites and advertising literature - private companies first interest is not philanthropy but profit!!

James said...

Woah - this seems completely at odds with the documentation distributed earlier. Are they not capping your contributions at £10,000 - or are they saying that it will materially improve the value of your property therefore they can charge? £7000 for professional fees is a grossly unjust cost - and I thought there is a possibilty of challenging the owrk and prices they are charging, if one can prove they are excessive. I think you are right and it is time for us to get together before it goes too far....I'm ready for the fight - but how do we organise it?

jon s said...

The pamplet on the web states that in MOST cases the cost will be less than £10,000.

If this is the norm for a PFI, Most (i.e. more than 50%) will have been made with a list of assumptions, and backed off from the contract with a resonable endeavours (i.e. practically non binding) SLA so it is doubtful it is the cap.

Headhunter said...

This is exactly why I moved out of my ex-council flat in Islington and came to Brockley - I could see the looming section 20 and potentially huge bills. In Islington people on the Spa Green Estate were hit with bills of up to £30k per leaseholder. I think this was exteme as the buildings were listed having been designed by the renowned architect Lubetkin in the '50s. There have been several claims that councils are charging leasholders a disproportionate amount of money to recoup costs.

Having said this a friend of mine actually negotiated with the council having been hit with a bill of £7k for double glazing in her leasehold ex-LA flat. She offered them £4k and the council accepted! This was Southwark...

Brockley Nick said...

@Anon - thanks for highlighting this issue, which is clearly important for many. It would be helpful, when posting on subjects like this, if people could identify themselves and / or their sources of information. Anonymous postings naturally look less credible and don't give us a lot to go on if we want to follow-up a story. However, another reader has been looking in to this and I plan to start a dedicated thread to the topic tomorrow.

helen said...

Has anyone successfully 'fought' these charges? I live in a standard Victorian conversion but one of the reasons i bought the property (as a first time buyer) was because it retained wooden sash windows - pvcu windows are not to my taste, out of keeping with the age of the property, and are engegy inefficient, despite what the 'regeneration' literature may say - they requiring regular replacement compared to maintained wooden versions. Regenter also wish to replace my front door with a pvcu version. I appreciate the overall 'regenerative' motivation of the scheme but think the enfocement of a standard approach is shocking (as is the associated fees, scaffolding cost). Much of the 'upgrades' will provide only short term visual improvements. It seems the only to avoid these kind of enforcement is to live in a conservation area, which shouldnt be the case, but it is leading me to look at buying elsewhere in south east london (that isnt under the kosh of the PFI). Would love to hear from others who have successfully argued to retain features of their property and how they have done this - i have been pointed in the direction of a applying for a leaseholder tribunal hearing - would be keen to avoid this if possible....

Tressillian James said...

Helen

Get in charge with your local councillor - and their is also a leaseholders organisation mentioned on other threads re the PFI here on this blog.

I think you have two very good arguments - a) are the modifications needed, or are your windows and doors in good condition; and b) other leaseholders (who do not share their building with social housing) are not having to undergo this work - so why are you treated differently.

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