Trial by Jeory

This motion has been submitted by the Labour group for debate at next Wednesday’s full meeting of Tower Hamlets council (declaration: I’m a Tower Hamlets Homes leaseholder).

Proposer: Cllr Marc Francis

Seconder: Cllr Carlo Gibbs

This Council notes:

• In 2008, Full Council agreed a motion authorising the Lead Member for Housing to commission an independent audit of leasehold service charges following concerns about the two-thirds increase in the level of Management & Administration fees, numerous historic disputes over the costs recharged and a Scrutiny Review which called for much greater transparency and accountability in the calculation of service charges;

• In 2009, a Project Steering Group (PSG) involving councillors, Tower Hamlets Homes (THH), Tower Hamlets Leaseholders Association (THLA) and other leaseholders agreed detailed Terms of Reference for that audit, commissioned Beevers & Struthers Ltd to carry it out;

• In spring 2010, THH attempted unilaterally to introduce new methodology for the calculation of management fees and a new policy to charge to ground floor leaseholders for services they did not benefit from, which was blocked by the Lead Member;

• In summer 2010 a draft version was produced for the PSG, identifying a series of very challenging issues for THH around the management of leasehold services, value for money, caretaking, repairs and maintenance, management and administration fees, and several Service Levels Agreements with LBTH;

• However, publication of the final audit report was delayed by the Mayoral Election in October 2010 and not finally signed off by the PSG until May 2011, by which time LBTH/THH had already begun consultation on a “Leasehold Policy Review” which was claimed to have been based on its findings;

• The Mayor and Lead Member subsequently established a Leasehold Action Plan Working Group (LAPWG), including representatives of leaseholders to bring together the Beevers & Struthers’ recommendations, those of the Audit Commission and THH’s own Leaseholder Service Improvement Group, and a Statement of Intent was agreed by all those involved to implement the 54 recommendations or agree an alternative remedy;

• Over the next 18 months, just five of the 54 recommendations were implemented and in October 2012, THH sent leaseholders “actuals”, which included significantly increased charges in most areas, particularly block/estate cleaning, a 17 per cent “Overhead” fee and new SLAs with LBTH.  They were told these costs had been calculated on the B&S audit and had actually been “dampened” and so would increase further over the next two years;

• In spring 2013, the St Stephen’s Estate Leaseholders Association published a damning scrutiny report, which exposed the failure to implement the recommendations in the original Beevers& Struthers audit;

• In response, the current Lead Member for Housing & Development, is now proposing an “review” of the original B&S audit.

This Council believes:

• The Mayor and THH have not implemented the recommendations contained in the independent audit in accordance with the agreed Statement of Intent and that the original aim of increasing transparency and accountability has been lost;

• Leaseholders should be fully recharged for the costs of the services they receive, but that the 2011/12 “actuals” are not based on the methodology set out in the recommendations in the B&S audit, but are instead opaque and represent very poor value for money;

This Council resolves to call on the Mayor to:

• Explain why only 5 out of 54 of the recommendations in the B&S audit have so far been implemented;

• Explain why an 17 per cent “Overhead” has been introduced across most Heads of Charge:

• Justify the Service Level Agreements between LBTH and THH and explain what action is being taken to ensure best value;

• Instruct THH to publish a report detailing how the actions it has taken since October 2010 to achieve “savings” have resulted in reduced costs to council leaseholders and tenants.