Leaseholders at Tustin Estate run by Southwark Council have had an estimated major works bill at a staggering £146,257.22p for a two bedroom flat.
This may well be the highest bills ever to have been sent out in the social sector. If anyone has seen a larger bill per flat for a social sector major works project please let us know.
An average family would need to not eat, drink or spend a single penny for more than 6 years to be able to pay this bill of £146,257. Even the chief executive of Southwark Council paid £216,236 a couple of years ago might find the need to scrimp and save to find this much money.
The S20 consultation document landed on the leaseholder’s doorsteps in February but because Southwark has a Qualifying Long Term Agreement in place (QLTA) the leaseholders only right is to make observations rather than submit potentially lower quotations.
The council does not even feel it relevant to inform leaseholders who the contractor might be simply assuring that the council is committed to ensuring “the best price for the work”. The leaseholders are not informed of how long this QLTA has been in place.
LKP spoke at the Southwark leaseholders conference last year. We explained we have never seen any evidence these long term contracts provide benefit to the consumer. The opposite may well be the case. For over 20 years the whole of the social sector and all the experts who advise them seem to have based their purchasing decisions on a set of misunderstandings.
1) The social sector often quotes the European Procurement Rules as requiring certain types of tender which tends to encourage the use of these QLTAs. While this may be true for some providers the government told LKP they do not think the European Procurement rules apply to all providers in the social sector. We are also aware of at least one local authority which has taken legal advice which says they do not need to use QLTA and can, therefore, more easily place smaller contracts which fall outside the European contract rules.
2) The social sector often quotes their obligation to use QLTA under the governments’ value for money obligations. The government tells LKP this is not true their guidance makes no reference to the need to use these QLTA’s.
3) The social sector often quotes “Egan Principles” which supposedly recommend the use of QLTA’s. According to Sir John Egan who wrote the Egan Report on improving construction techniques in the late 1990s his “Egan Principles” simply do not exist. He never spoke to the social sector and never intended his report to be used for buildings maintenance.
A copy of the full s20 can be read here: