Agenda item

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

DECLARATIONS OF INTEREST FOR THIS ITEM:

None

RESOLVED:

That Cabinet:

1. Approved the provisional award of MDC (Multi-Disciplinary Consultants) Contracts across four geographical lots to four separate successful bidders identified as Bidders 1, 2, 3, and 4 in the exempt portion of this report, in accordance with CSO2.01(C).
   
   
2. Noted that following this provisional award, the second stage of Section 20 consultation would take place by issue of a Notice of Proposal and that following the consultation, a report would be brought back to Cabinet for decision, taking account of any observations made in that consultation.
   
   
3. Noted that the award would be for a period of 12 years with a 5-year break clause. The 12-year period considered the recently procured 10-year partnering contracts and the time required to support the contract by completing and agreeing final accounts during the final years of the partnering contracts.
   
   
4. Noted that the approximate value of the contract award to the four selected bidders was determined based on a fee percentage, as outlined in Appendix A – Part A – Exempt Report, Sections 1.7.2 and 2.1.1.
   
   
5. Approved delegated authority for the Director of Housing, in consultation with the Corporate Director of Finance and Resources, to issue task orders under the contract in line with the annual 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 MDC (Multi-Disciplinary Consultants) Contracts supported the strategy approved by Cabinet in July 2022, ‘Partnering Contracts Strategy for Housing Major Works,’ and established four long-term contracts identified as the best way to support the major works programme and address decency issues. This approach adopted a holistic method to refurbishing properties and blocks (both tenanted and leasehold) and maximized the social value benefits of the Council’s investment. Key objectives of these contracts included:

• Ensuring that all stock met the Decent Homes Standard and that this was maintained going forward.
• Ensuring that all Council-owned homes had a minimum of an EPC B by 2035.
• Ensuring that statutory safety standards were maintained in all blocks.
• Providing employment and training opportunities; supporting and enabling SME supply chains in the borough to benefit from the investment; and involving residents at all stages in the procurement and delivery process.
  
  

In December 2023, Cabinet approved a new Housing Asset Management Strategy. This strategy established a clear process for prioritizing investment in the Council’s housing stock, set a new Haringey Investment Standard, and defined the framework for the delivery of investment. This framework was created through the establishment of the long-term partnering contracts and the Cabinet-approved strategy (July 2022) and provided a robust, streamlined framework to enhance commissioning and delivery of housing investment, contract administration and management of contracts and contractors, and realization of value for money and social value.

The MDC (Multi-Disciplinary Consultants) Contracts supported the delivery of housing capital investment works to properties owned and managed by the Council, including but not restricted to:

• Decent Homes-related works
• Building safety and fire safety-related works
• Block refurbishment works
• Mechanical and electrical works
• Decarbonisation-related works
• Neighbourhood and estate improvement works
• Internal and external cyclical works
  
  

A procurement process was undertaken via Haringey’s Dynamic Purchasing System (DPS) to find four suitably qualified Multi-Disciplinary Consultants to support the partnering contractors in delivering the Council’s Housing Capital Investment Programme. A separate contractor for each of the four geographical lots was awarded for MDCs to provide professional services to draft specifications, compile scope of works, and administer the agreed contract for capital repairs and maintenance services to the Council’s housing stock. It was recommended that four contracts be awarded, one to each of four separate recommended bidders identified through the tender evaluation process.

As part of the procurement, bidders could apply for multiple lots but be awarded a maximum of one lot and were required to set out their lot preferences in their tender submission.

Alternative Options Considered

Contractual Options

Continue with procuring MDC services individually

This route did not support wider corporate objectives as it limited opportunities for co-production and delivery of social value. This approach was at risk of uncertain market conditions in the construction industry. When consultants had the certainty of longevity, it enabled them to invest in the contract, implement social value, and offer competitive fees for their key services. This could not be achieved when contracts were let individually.

There was also the management cost of continuously producing scope of services for procuring consultants, and the time and costs associated with managing the tender period as well as running leaseholder consultation processes. The approach of procuring a long-term agreement allowed officers to concentrate resources on contract management, which in turn resulted in better value for the Council.

Retain the existing framework agreement
The Council held a framework agreement with a single multi-disciplinary consultant, established to support the delivery of a broad range of services. This agreement was originally entered into following Cabinet approval on 13 February 2018 for an initial term of five years, with an option to extend for a further five years.

In line with this provision, the agreement was first extended for a period of two years from April 2023 to April 2025. Subsequently, on 03 March 2025, a further extension was approved via Delegated Authority for the remaining three years, bringing the total duration of the framework agreement to ten years, concluding in April 2028.

Although retaining the existing framework ensured continuity of service, preserved institutional knowledge, and maintained efficiency and value established through the long-standing relationship with the appointed consultant, the existing agreement would expire in 2028, and the Council would generally seek to procure these services via the wider open market. However, considering the £570m investment in the Council’s housing stock and the procurement of four partnering contractors, this provided an opportunity to invite other consultants to tender for these services, which would not only ensure the Council was receiving best value for these services, but also provide an opportunity to procure a single consultant for each of the four lots, limiting the exposure to the risk of having one supplier for multi-disciplinary services across the borough.

Considering this paper sought approval to award a contract to four multi-disciplinary consultants, it was important to note that the existing framework agreement with the current multi-disciplinary consultant would be terminated upon the appointment of the new consultants. However, their contract would remain in effect until April 2028.

While no further commissions would be issued beyond the date the new consultants were in place, the incumbent consultant would be required to complete and hand over all ongoing projects.

Deliver the MDC services in-house
The Asset Management team did not have the staffing structure or expertise to deliver the MDC services in-house. The capital programme had a significant level of complexity that was best managed by external partners. For example, the programme included works to high-risk buildings which required expertise in the design and delivery of these works to ensure compliance with current fire and building safety regulations.

Using multi-disciplinary consultants limited the Council’s exposure to financial and operational risks. Also, had the Council opted for delivering the services in-house, it could have lost the competitive pressure and potential for innovation that came from market-driven competition. Outsourcing encouraged fresh thinking from experienced consultants who were tuned to changes in the industry.

It should also be noted that working with multi-disciplinary consultants in a partnering arrangement enabled staff to develop key skills, which, if at a future date it was seen as appropriate to move to an in-house delivery model, would have provided considerable learning from commercial partners in delivering services of this nature.

Partnering Approach

Period of the Contract
The Council appointed four partnering contractors across four lots for a period of 10 years. This followed a review of recently awarded partnering contracts for several local authorities and registered social housing providers. It was noted that the 10-year term with a 5-year break clause was considered appropriate for Haringey’s capital works programme.

To support the 10-year partnering contracts, it was noted that the Council required professional support to administer the partnering contracts and protect the interests of the Council. It was therefore agreed that the procurement of four independent multi-disciplinary consultants was necessary for a period of 12 years with a 5-year break clause. The 12-year period considered the time required to complete and agree final accounts during the final year of the partnering contracts.

Number of Contracts
To align with the partnering contractors, it was agreed that the Council would appoint four multi-disciplinary consultants—one for each of the four partnering contractor lots. Appointing one or two multi-disciplinary consultants was ruled out due to the capacity of one or two consultants to provide services across all four lots and the risks associated with working with fewer consultants, including poor performance and insolvency. Appointing more than four consultants was ruled out as it was felt that this would not align with the partnering contracts and could dilute the benefits of long-term agreements, particularly around social value benefits.