Camden Council takes back control of Chalcots estate as PFI company collapses

Maintenance brought back in-house at estate that was evacuated over fire safety flaws

Thursday, 10th May 2018 — By William McLennan


The towers were covered with Grenfell-style cladding, which has been removed

THE Town Hall is to take back control of a council estate that was refurbished under a controversial PFI deal after the private firm which held the contract to maintain its high-rise blocks went bust.

The intervention comes at the Chalcots estate, which was evacuated due to fire safety flaws last summer, and raises fresh questions about private finance deals to improve and maintain council and public buildings.

Partners for Improvement in Camden (PFIC), which won a £150million deal to refurbish and maintain the estate in Adelaide Road until 2021, told the New Journal last night (Wednesday) that they are liquidating the business.

Camden Council stopped paying the company in November, as part of a dispute over who was responsible for failings that led to the drastic evacuation of 3,000 residents from their homes in June last year.

It is estimated PFIC will lose out on £36million as a result of the decision to withhold payment.
The move was part of the council’s attempt to recover the costs of the emergency operation and subsequent safety works that are expected to total more than £70million.

The five towers were at the centre of national focus after the discovery of flammable cladding and a host of internal defects in the aftermath of the Grenfell Tower fire.

Around 3,000 were kicked out of their homes at a moment’s notice

Chalcots was one of a handful of estates across the country to be refurbished under controversial Private Finance Initiatives (PFI) – the method of funding championed by Tony Blair’s New Labour.

Tenants in Camden consistently appealed for improvement works on the leaking estate to be paid for using direct investment from government, but their pleas were ignored.

The council is set to bring maintenance back in-house and take over from Rydon, the construction company that was appointed by PFIC to carry out the works. They included installing the cladding that was later found to be unsafe and has been removed.

Similar cladding was used at Grenfell Tower, where Rydon also carried out refurbishment works.

It has denied any wrongdoing over the fire tragedy in west London and said that its refurbish­ment of the tower block was in line with government standards and regulations. An investigation is ongoing.

Rydon refused to say yesterday (Wednesday) when they would exit the Chalcots estate, but the council said they anticipate all subcontractors to be replaced “in the near future”. They had been due to remain on the site until April 2021.

United Living, the heating contractor, walked off the site at 5pm on Friday, having not been paid by PFIC.

The Town Hall have already appointed another contractor to replace United Living and say they are prepared to take total control of all maintenance with a “Camden-led service using specialist contractors and directly employed staff” – a sign of the Labour council’s new interest in publicly-run services.

It is thought that some Rydon employees may be given the option of transferring to Camden Council.

Defend Council Housing (DCH), who opposed the PFI contract from its inception on the grounds that the council would lose control, said both the Grenfell Tower disaster and the Chalcots evacuation should mark an end of privatisation and outsourcing.

Eileen Short, of DCH, said: “We want services back in-house, with tenant oversight and full accountability.”

Council leader Georgia Gould said last night that “Camden Council is stepping in again where the PFI has let us down”.

She added: “I’m determined we give Chalcots residents the direct, accountable and responsive repairs service they deserve.

“Given the huge costs we have incurred, and in accordance with the contract, we stopped paying PFIC in November 2017 and we now anticipate that their subcontractors will be leaving the Chalcots.”

It is estimated that the cost of the internal works and re-cladding will total around £40m, with at least another £10m spent on the evacuation operation and emergency accommodation.

All windows and “curtain walling” – a metal structure to which windows are attached – are to be replaced, at a cost of £22m, after further investigations found that “the standard of workmanship within the curtain wall assembly is variable”.

Partners for Improvement in Camden said that the works were “signed off at the time by an independent certifier and Camden Building Control as being compliant with the works specification procured by the council”.

Rydon said: “Safety and quality is integral to everything we do at Rydon.”

PFIC was originally a consortium of Halifax Bank of Scotland and United House, but has since changed hands. Halifax Bank of Scotland was taken over by Lloyds Banking Group in 2009.

John Laing Infrastructure Fund bought the project from United House in 2012 and holds a 50 per cent share of PFIC.

According to company records, PFIC made a profit after tax of £1.28m in 2016.

A statement from Partners for Improvement in Camden said they had “reached the unfortunate position of having no option but to enter a liquidation process following the ongoing decision by the council to withhold payment of the unitary charge”.

It said they were “working closely with Camden Council in preparation for the handover of all repairs and maintenance arrangements currently provided by the company”

It said they expected no job loses as a result of the company’s insolvency.

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