Agenda item

Report of the Corporate Director of Adults, Housing and Health. To be presented by Cabinet Member for Housing & Planning (Deputy Leader)

The Cabinet Member for Housing and Planning, and Deputy Leader of the Council introduced the report. It was explained that the Council had invested in the refurbishment of thousands of council homes across Haringey and that the proposal was to commit more than £0.5bn to refurbishments over the following ten years. This aimed to bring 100% of council homes in Haringey to the Decent Homes Standard by 2028. The proposal would improve the average council home’s energy rating from C-grade to B-grade, cutting bills for thousands of residents. That meant double glazing was installed, new modern boilers fitted, wall and loft insulation added, new front and back doors installed, as well as other measures.

It was explained that the Council was working to transform the way it procured building services and that, instead of managing many small contracts, it agreed to a few large contracts, one for each quarter of the borough.It was stressed that the Council closely monitored the performance of those firms, ensuring they consistently delivered quality. It was explained that this approach also enabled greater resident involvement in decision-making, both in procurement and governance. When designing repairs or refurbishments for a series of homes or an entire building, there was a real opportunity to collaborate with residents through regular engagement and the Resident’s Voice Board. This requirement was written into the contracts.

The Cabinet Member explained that the scale and duration of these contracts allowed the Council to create jobs and opportunities for local people. Social value was maximised in the contracts. The Council aimed to see local jobs created, apprenticeships offered, and investment directed into the local community. These expectations were also embedded in the contracts. This agreement embedded a long-term partnership with the appointed firms, bringing investment not just in bricks and mortar but also in communities across the borough.

In response to comments and questions from Cllr Emery, the following information was shared:

• The Council had a proportion of Council Houses that met decent home standard at 80%. It was also explained that officers would respond in writing to questions on number of buildings at EPC B+
  
  
• It was explained that scores for any successful bidder were required to be above 81.34% in the tender evaluation process.

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RESOLVED:

That Cabinet:

1. Approved the award of the four partnering contracts across four geographical Lots, to four separate successful bidders in accordance with CSO 2.01(C).
   
   
2. Approved delegated authority for the Director of Housing, in consultation with the Corporate Director of Finance and Resources, to issue works orders under the contract in line with the annually Cabinet-approved Housing Revenue Account Housing Capital Programme.

Reasons for Decision

Haringey Council owned and managed approximately 20,500 properties within the London Borough of Haringey.

The award of the four contracts supported the strategy approved by Cabinet in July 2022—Partnering Contracts Strategy for Housing Major Works—and established four long-term partnering contracts. These were identified as the best way to address decency issues through a holistic approach to refurbishing both tenanted and leasehold properties, while maximising the social value benefits of the Council’s investment. Key objectives of these contracts included:

• Ensuring all stock met the Decent Homes Standard and maintained that standard going forward.
• Ensuring all Council-owned homes achieved a minimum EPC B rating by 2035.
• Maintaining statutory safety standards in all blocks.
• Providing employment and training opportunities, supporting and enabling SME supply chains in the borough, and involving residents at all stages of procurement and delivery.

In December 2023, Cabinet approved a new Housing Asset Management Strategy. This strategy established a clear process for prioritising investment in the Council’s housing stock, set a new standard for investment, and defined the framework for delivering that investment. This framework was created through the establishment of long-term partnering contracts, as outlined in the Cabinet-approved strategy (July 2022). The streamlined framework improved commissioning and delivery of housing investment, contract administration and management, contractor performance management, and the realisation of value for money and social value.

The Partnering Contracts delivered housing capital investment works to properties owned and managed by the Council, including but not limited to:

• Decent Homes-related works
• Building Safety & Fire Safety-related works
• Block refurbishment works
• Mechanical & Electrical works
• Decarbonisation-related works
• Neighbourhood & Estate improvement works
• Internal and external cyclical works

A procurement process was undertaken via a mini-competition through Lot 2.3 of the newly procured LCP Housing framework to identify four suitably qualified contractors. A separate contractor was selected for each of the four geographical lots. Each contract provided capital repairs and maintenance services to the Council’s housing stock. It was recommended that four contracts be awarded—one to each of the four separate recommended bidders identified through the tender evaluation process.

As part of the mini-competition, bidders could apply for multiple lots but be awarded a maximum of one. Each bidder was required to set out their lot preferences in their tender submission.

Alternative Options Considered

Contractual Options

Continue with procuring contracts individually:
This route did not support wider corporate objectives, as it limited opportunities for co-production and delivery of social value. It was also vulnerable to uncertain market conditions in the construction industry. When contractors had the certainty of longevity, they were able to invest in the contract, implement social value, and drive down supply chain costs—benefits that could not be achieved when contracts were let individually. The Council was not permitted to segregate contracts to avoid open market tendering for contracts exceeding the public works threshold of £4.733 million. Additionally, there were management costs associated with continuously producing specifications, going out to tender, and running leaseholder consultation processes. A more consolidated approach allowed officers to focus resources on contract management.

Put in place a framework with annual contract awards:
A framework agreement, commonly used as a multi-supplier arrangement, established relationships with several contractors to deliver works as approved providers. While this reduced some risks associated with single-contract procurement, the lack of guaranteed continuity of work reduced the potential for delivering wider social value—particularly in terms of meaningful employment and technical apprenticeships. Annual awards also made it harder to involve contractors early in planning stages. The uncertainty of continuity could deter market interest, especially in volatile times.

Award contracts based on type of work:
The approved Asset Management Strategy prioritised delivering works to residents’ homes in a holistic manner to reduce disruption. Letting contracts based on work types rather than properties would have departed from this strategy. While the in-house team could theoretically coordinate such works, they did not currently possess the necessary skill set. This would have shifted liability for delays from contractors to the Council. Delivering works holistically also offered financial advantages by reducing access requirements, site setup, and management costs. Moreover, splitting contracts by work type could impact warranties and contractor liabilities if one contractor’s work caused product failures or damage.

Deliver the works in-house:
The Council already delivered its housing repairs and maintenance service in-house, valued at around £20 million per annum. A small kitchen and bathroom programme (circa £1 million) was delivered in-house in 2020/21, which highlighted that the Council lacked the necessary skills at both management and operative levels to deliver this type of work. The scale of change required to take on this work internally would have been significant. Risks included health and safety, building safety, supply chain issues, and labour availability. Partnering with contractors allowed Council staff to develop key skills, which could support a future transition to in-house delivery if deemed appropriate.

Partnering Options Considered

Period of the Contract:
Across the local authority and housing sectors, several major works partnering contracts had recently been awarded or were in procurement. Clarion let a 20-year contract, London and Quadrant procured a 15-year contract, and Hackney was out to market for a 4-year framework. After taking market advice, a 10-year contract with a 5-year break clause was considered appropriate for Haringey. Given that procurement and full mobilisation would take around two years, the contract needed to be long enough to attract bidders and deliver long-term benefits. A contract exceeding 10 years was deemed too inflexible given potential changes in the wider environment. The five-year break clause offered flexibility, allowing it to be applied to one or all contracts.

Number of Contracts:

Options were considered for dividing the £570 million worth of works. Awarding to one or two contractors was ruled out due to capacity concerns and risks such as poor performance or insolvency. More than four contracts were also ruled out, as this would dilute the benefits of long-term agreements with a small number of committed contractors. Aligning with the Council’s Corporate Delivery Plan 2024–2026 enabled the best synergies, particularly for delivering social value aligned with borough priorities. Due to the concentration of social housing in the East of the borough, that area was split into two lots. This also made two of the lots more attractive to medium-sized regional contractors, encouraging greater diversity in the pool of bidders.