Investigation after leaseholders query cost of improvement works
Islington launches fraud inquiry into housing PFIs
Islington Council’s anti-fraud team is reviewing its two housing private finance initiative schemes after leaseholders raised concern about the way they were charged for improvement works.
The probe on the £239.7 million PFI schemes, set up to refurbish 6,440 homes on several of the north London borough’s estates, will examine the relationship between Partners for Improvement in Islington Ltd, the consortium delivering the projects, as well as contractor United House and its sub-contractors.
Leaseholders who share blocks with social housing tenants are billed for works, with PfIL serving an advance notice detailing the expected costs based on United House estimates.
Following the completion of the work, the actual costs are calculated by United House using invoices received by sub-contractors.
Charges to leaseholders under Islington’s PFI scheme are capped at £10,000, with the PFI consortium covering the rest.
Dr Brian Potter, chair of the Islington Leaseholders’ Association, said: ‘Some of this work would have £40,000 spent on it and you wouldn’t believe it, it was just a coat of paint and a couple of new windows.’
The probe will look at whether consultation procedures were followed, bills were accurate and on time, errors in leases were identified and leaseholders contacted, and whether building and planning regulations were complied with.
A leaked internal council document states that allegations of fraud have been made against United House staff. A United House spokesperson said: ‘We are fully supportive of Islington’s review into leaseholder invoicing in connection with the PFI contract. We are aware that unfounded allegations of fraud have been made. We strongly refute these allegations and look forward to the outcome of the review.’
A PfIL spokesperson said: ‘We fully support Islington Council’s review and we will continue to work with the council to provide excellent services to tenants and leaseholders.’
United House carried out a separate investigation last year after anomalies in accounts submitted by a contractor came to light, leading to disciplinary action against several of its employees. It has since dispensed with the services of a sub-contractor.
Last month, a National Audit Office report examining the cost of housing PFI found that the combined overspend on the two Islington projects was £164.7 million.
The audit team will complete its report by the end of August.
Probe will look at whether
- Consultation procedures were followed
- Bills were accurate, on time, and apportioned correctly
- Bills included explanations for variations from the estimate
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