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John McDonnell (Hayes and Harlington) (Lab): In this Chamber we debate the main issues facing our country and the world, and we pass laws that affect the lives of millions, but as Members we also retain the centuries-old right and tradition, stemming from the earliest days of Parliament, to be able to raise the grievance of an individual constituent when all other routes appear to have been exhausted and the constituent considers that justice has not been done. Often the airing of an individual case can throw light on a more general malaise that needs to be addressed, so in that tradition I wish to raise today the case of one of my constituents, Mr Bernard Fagan, and the performance of Hillingdon council, its arm's length housing management company, Hillingdon Homes, and its contractors and sub-contractors in the delivery of the previous Government's decent homes programme.
The decent homes programme was a well intentioned attempt to bring all council accommodation up to a decent standard and modernise the housing stock by installing new kitchens, toilets, bathrooms, doors and windows and making other basic improvements. The programme was a welcome and desperately needed fillip for council tenants after years of neglect and lack of investment by past Governments. The overall cost of the programme was originally estimated to be £20 billion.
Unfortunately, because of a lack of confidence in local councils to deliver a programme of that scale successfully, the previous Government attached a number of conditions to the investment programme. If a local council wanted to receive a share of the capital investment, it was required either to transfer its stock to a housing association or other landlord, or to establish an arm's length management organisation, or ALMO, and transfer its housing stock to that new body. The ALMO would undertake the day-to-day management of tenants' homes and the area's decent homes programme.
The local council and its tenants had to agree to the stock being transferred to the ALMO, and refusal to transfer would result, in effect, in their losing access to the decent homes investment programme for their area. In my constituency, despite many anxieties, uncertainties and worries, tenants were forced over a barrel to agree to the transfer; otherwise they would have largely had to forgo the opportunity to receive new kitchens, bathrooms and other improvements to their homes.
Despite some limited acknowledgement of the need for greater tenant involvement in the management of their homes, the setting up of the ALMO largely resulted in a transfer of staff from the council's existing housing department, the production of a new logo, a wage increase for the senior officers of the new body and, I have to say, little else to distinguish the operation of the ALMO from that of the council's housing department.
In my constituency, the new ALMO, Hillingdon Homes, was allocated about £60 million to undertake the local decent homes programme, and selected one of my local tower block estates, on Avondale drive in Hayes, for inclusion in the programme. I have worked closely with local residents and tenants associations in my town-in
fact, I have set up many of them-and on the Avondale estate the residents association is chaired by my constituent, Mr Bernard Fagan. When the local decent homes programme commenced in 2005, I kept in close touch with local residents, through the association, to monitor its implementation.
I intervened at an early stage in 2005 because tenants contacted me and the local councillor Lynne Allen. They were fearful that the asbestos removal from individual apartments was taking place without the families being decanted from the properties by Hillingdon Homes, and there were concerns that there were not the appropriate protections for the tenants and indeed the workers involved in removing the asbestos. As a result of those concerns, the local councillor and I met the tenants, visited the estate and contacted Hillingdon Homes and the council, and gained assurances that proper procedures were being, and would be, followed.
Later, in December 2005, Mr Fagan contacted me again to seek an urgent meeting to discuss the problems he was experiencing with regard to the renovation of his apartment, under the Hillingdon Homes decent homes programme. When we met in early January 2006, Mr Fagan took me through the catalogue of errors, poor workmanship, delays and failures of performance that he had experienced at the hands of the contractors and subcontractors whom Hillingdon Homes had employed to install a new kitchen and bathroom in his flat. At that early meeting, he pointed out 19 specific examples of poor workmanship that he had identified.
"On 11th May, Bogdan Building Services, under the supervision of Apollo London Ltd"-
"carried out the gutting out phase of my flat refurbishment. They removed a perfectly functional hood extractor fan and its outlet, in spite of a signed and endorsed drawing clearly stating that this appliance should be refitted. I believe that this was done because the operatives involved had difficulties with interpreting the drawings and with written and oral instructions in the English language...On 12th May, an operative posing as a plumber began working in my home. He installed a toilet 10 mm above the floor, falling short of entering its outlet square and risking leakage...On 13th May, electricians began work on my kitchen and I was left without power in this room for 30 days...On 16th and 17th May, an inept operative masquerading as a carpenter began work on my flat. The standard he achieved over these two days was appallingly bad and he had to be removed from my flat."
I should say at this point that Mr Fagan is a time-served retired carpenter; after years of extensive experience as a professional craftsman, he knows a professional job when he sees one. On one occasion, he felt so sorry for one of the Bogdan operatives that he had to show him how a particular tool operated so that the work could be completed.
"On 19th May, my new kitchen was fitted. The worktop that the kitchen fitter attached to the base units was butchered with a jig saw, short of the required length, with copious amounts of sealant used to disguise the mistake...On 26th May, a tiler achieved a standard close to acceptable in my kitchen, but the standard in my bathroom falls short of what one might reasonably expect."
Overall, the work took nine weeks, more than twice the time mentioned in the information pack sent to tenants in preparation for the work by Hillingdon Homes. During this period, on 15 May there was a fire in Mr Fagan's flat that had resulted from the cooking appliance that he had been supplied as a temporary replacement for his cooker while the work was carried out. The cooking appliance supplied was not the appliance promised by Hillingdon Homes, but a cheaper version. Mr Fagan suffered burns and some of his furniture was damaged. Eventually, he received some form of compensation.
From May until November of that year, Mr Fagan was in regular contact with Hillingdon Homes, seeking remedial action to tackle a litany of problems in his flat resulting from the poor workmanship. He was met by what he described to me as bureaucratic obfuscation, delays, procrastination, incompetence and mismanagement-those are just the repeatable expressions that Mr Fagan has for his treatment at the hands of Hillingdon Homes.
It took me several letters over a period of months to get any practical response from Hillingdon Homes. When the ALMO responded with offers to undertake remedial work, Mr Fagan had had enough and refused to allow the same unskilled and untrained operatives back into his home. He insisted on proper repairs to address the mistakes made and tried to insist on at least some direct labour operatives to do the work that was needed. Eventually, some remedial work was undertaken, but long delayed and after a lengthy struggle with Hillingdon Homes, and on two occasions with action only agreed on the steps of the court as Mr Fagan resorted to legal action.
As I said, Mr Fagan is an active member of Avondale residents association, and currently its chair, so he was concerned to discover whether other tenants had experienced similar problems. I therefore wrote to Hillingdon Homes to ask whether any other tenants had expressed concerns about the work undertaken in their apartments. I was informed by the surveying manager of Hillingdon Homes-I have never met a surveying manager before, but we now have one-that the contractor, Apollo, had undertaken a survey that recorded a 92% satisfaction rate among all tenants who had responded to the company's survey from the 101 properties completed in the programme to date. However, it reported only a 42% satisfaction rate from the Avondale estate, with 38% dissatisfied.
At meetings with Hillingdon Homes and tenants, I urged the ALMO to undertake an independent survey. It refused, and instead sent round one of its own project team to visit the tenants-one of the very people who had been complained about. In the absence of an independent survey, I held a meeting with the tenants and conducted a written survey of my own, which reported overwhelming dissatisfaction with the improvement programme.
Let me outline the basic issues of concern with regard to our experience of the decent homes programme in Hillingdon. The first major concern is the poor quality of the work undertaken, as evidenced by the experience of Mr Fagan and his neighbours. Work on the programme was contracted to Apollo London Ltd, which in turn
subcontracted much of the work to Bogdan Ltd. In one of its publications, Hillingdon Homes explains that Bogdan Ltd was set up by a Mr Bogdan Hrab, a carpenter who had worked on school projects for Apollo in Hillingdon. He recruited what is described as
"a core of Romanian tradesmen",
"skills and competency, which he personally monitors."
"not price-driven but on a tried and tested basis."
The ALMO also implied in one of its publications that the demand for labour for major projects in my area, such as terminal 5 at Heathrow, meant that there was a shortage of skilled workers, and Bogdan and its Romanian work force met this need.
The poor workmanship of the operatives working on the Avondale estate led Mr Fagan to question whether these Bogdan employees were indeed the qualified tradesmen they purported to be. Although Hillingdon Homes sought to assure me that Apollo vetted its sub-contractors, to date no satisfactory evidence has been produced by Hillingdon Homes or Bogdan Ltd to confirm the qualifications of the Bogdan staff. In fact, Hillingdon Homes has now denied that it is its responsibility to ensure that the workers are qualified, and Apollo has refused to release details of the tradesmen's individual qualifications.
Because at that time Romania had not acceded to the European Union, the visa requirements for entry into the UK for employment meant that workers recruited would have to demonstrate their qualifications. In February 2007, I wrote to the Home Secretary to clarify the visa arrangements and to seek an inquiry into the practices of Apollo and Bogdan Ltd. My letter was passed to the Department for Business, Innovation and Skills. The response I received from the Minister of State confirmed the following:
"Although Romania joined the EU on 1st January 2007, its nationals still need permission to take employment here. Authorisation would only be given if they met the skills and other criteria of the work permit scheme and applications require suitable evidence that the worker is suitably qualified. I understand that a work permit application has not been received from Bogdan Building Services. If a company employs a Romanian national without the appropriate authorisation, they and the worker may be committing a criminal offence."
Different rules apply for workers who are self-employed, but it is difficult to see how the operatives employed by Bogdan or Apollo could in any way be classified as self-employed. The Minister advised me that the letter had been referred to the immigration service's enforcement unit to consider what action was to be taken. That was 2007, and I have heard nothing since.
Interestingly, when it was asked whether there was a shortage in my area of the skilled contractors needed for such a contract, the Department for Work and Pensions confirmed that on the contrary, there were local building workers with the requisite skills looking for work in the area.
Questions were asked about the cost and value for money of the refurbishment work undertaken. The initial estimate of the unit cost for the refurbishment of the kitchens and bathrooms was put at £10,000 by Hillingdon Homes. Mr Fagan and his fellow tenants
challenged that figure and undertook a costing of the work themselves, collecting samples of materials and sample costs for the workers' time. They came out with a calculation significantly less than the official Hillingdon Homes estimates. At a later date, Hillingdon Homes reduced its costing from the original £10,000 to £7,900 per unit, but even at that level the tenants have questioned the rate of profit obtained by the contractor and the value for money achieved by the ALMO itself.
It is worth noting at this stage that Apollo was one of the companies that the Office of Fair Trading found to be guilty of price fixing in their dealings on local council contracts. It was forced to repay more than £2 million by way of fines only 18 months ago, one of the highest amounts of any company involved in the scam. Also, the Information Commissioner discovered that it had been involved in the blacklisting of trade union members, which may relate to the low rates of pay given to some of the operatives on the site in question.
Questions have also been asked about the insurance arrangements on the Hillingdon Homes programme after individual claims were pursued against Apollo, with one insurance assessor suspiciously withdrawing from claim negotiations and different dates being attached to the same insurance documents.
Throughout the implementation of the decent homes programme, Mr Fagan and other tenants have expressed strong concerns about the lack of accountability and responsiveness of Hillingdon Homes. Tenants have cited examples of the failure to undertake adequate and timely inspections of work, the reliance on the word of the contractor rather than listening to the tenants themselves, the delays in responding to tenants' concerns, complaints often being ignored, the patronising manner in which the tenants have been treated and the fact that they have been provided with inaccurate and obscure information. All that has increased the level of frustration, because, to quote Mr Fagan again:
"Had this programme been implemented properly it would have been socially beneficial but unfortunately its management and execution have not lived up to its noble aspirations."
With regard to the Romanian workers themselves, Mr Fagan wanted me to make it explicitly clear to the House that he is himself an Irish person who came here to seek work, so this is not an attack on the workers themselves but an attack on the company that may have brought them here without the appropriate skills and qualifications and put them in an impossible position to respond to the needs and demands of the contract. He believes that they may well have been exploited in the process.
Over the past three years I have raised my concerns about the decent homes programme in Hillingdon in direct correspondence with Secretaries of State and Ministers in the Department for Communities and Local Government. Apart from parliamentary questions, my last speech on the matter in this Chamber was in November 2007. I said then that there was a need for an investigation of the council's performance on this matter, and that we knew of a number of examples of poor workmanship. I said that I knew of cases in which tenants had been injured as a result of the work, even following the resources that had been ploughed into the programme.
I feel that I have done my duty in raising this matter, but there has been a lack of response from Hillingdon
Homes, the council and, I have to say, Ministers themselves. Despite getting local remedies to individual problems for tenants, I remain deeply concerned by how the programme was implemented in my area. I repeat my call for an independent investigation into the way in which Hillingdon Homes and the council undertook it.
The Hillingdon ALMO is to be scrapped and housing management taken back into the council in the autumn. I welcome that, but it should not be used to cover up the problems caused by the mismanagement of the decent homes programme. There needs to be a thorough and detailed independent investigation of Hillingdon Homes, and the abolition of the ALMO should not be used as an excuse for not holding that investigation.
My local experience naturally led me to wonder whether it had been replicated elsewhere. I know that the decent homes programme nationally has been criticised for overspends and delays, with more than 300,000 properties still not refurbished. I am aware of the National Audit Office January report, which states that it will be another eight years before the work is undertaken. There are criticisms in the report of the absence of monitoring and weaknesses in the information systems,
"which has reduced the Department's assurance that value for money was being achieved and this in itself constitutes a risk to value for money, because the Department cannot establish definitively whether the Programme has delivered the required improvements at a cost that was considered reasonable."
There is a need for a further review of the programme. I want the work to be completed to improve people's homes, but at a time of limited resources, it behoves us to ensure that whatever resources are available are wisely spent and meet the needs of the tenants. That is why I feel that in my constituency there is a continuing need to review the decent homes programme and its implementation, and to ensure that the situation I have described is never repeated.
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell): I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on introducing the debate and bringing the subject to the House. He has a long record of diligent and assiduous research and work on behalf of his constituents, and today's debate is a good example of that.
I agree that it is important that we get efficient and effective housing services, that we do not waste public money and that the people we serve actually get a service and are not treated merely as targets to fulfil. As well as ensuring that the workmanship is right, we must have the right standards of integrity, prudence and legality. The hon. Gentleman has raised some serious concerns about whether that is the case for Hillingdon Homes. He has also made a stout defence of his constituent, Mr Fagan, and the residents on the Avondale estate.
The hon. Gentleman painted a nightmare picture, which clearly needs to be considered carefully. He has outlined some concerns, which I will tackle shortly. First, let me provide some context. In Hillingdon, the council and its tenants chose to set up an ALMO. I understand his point that perhaps they had a financial pistol pointed at their heads by the previous Government through the suggestion that an ALMO was the way of accessing extra funding to invest in their homes. Indeed,
Hillingdon Homes invested £59 million between 2003 and 2008 and reduced the number of non-decent homes from more than 3,000 to just 23. I understand that statistics show that current non-decency is limited to only 48 homes out of the borough's stock. I hope that the hon. Gentleman agrees that that is a good record.
As the hon. Gentleman also reported, earlier this year, after a tenant consultation, Hillingdon council decided to take management of the homes back from the ALMO and to disband it, which is due to happen at the end of the year. The council claims that it will save £300,000 a year, which will be reinvested in services to tenants. Perhaps, therefore, the story will have a happy ending.
Let me deal with the hon. Gentleman's points and questions. He made some important points about the poor workmanship, but I am sure that he accepts that that matter should be pursued elsewhere. I am sure that he will be diligent in doing that. He has brought to the House's attention what he perceives to be irregularities about visa applications, or possibly the failure to make visa applications when they should have been made. He reminded us that the then Secretary of State was contacted and that a letter was referred to the immigration enforcement unit. Of course, that is not my ministerial responsibility, but I will ensure that his words are drawn to the attention of officials and the Department concerned.
The hon. Gentleman raised concerns about the cost and value for money of the installation. He said that the initial price quoted was £10,000 that not until tenants started to get stroppy did a new figure of £7,900 emerge, and that even now, there is a belief that that figure may be seriously over the top. He also drew attention to the record in the courts of Apollo London Ltd on price fixing. Those matters should concern the House. We need to be satisfied that public money has been properly spent and that a good service has been given.
The hon. Gentleman also reported that he debated the matter in the House back in 2007, when he asked my predecessors to carry out an investigation. I am sure he will understand that it is more his job than mine to defend the record of the outgoing Administration, and I am not going to take a rap for their performance, but I would welcome the opportunity to meet him with my officials to discuss some of his concerns. He feels that his constituents have been let down by Hillingdon Homes, the council and Ministers, but I should make it clear that up to now, I have not let him down, and I will see what we can do in future.
The hon. Gentleman asked a broader question about whether the problem he described is universal and whether it applies in many other areas. That is not our experience in the borough of Stockport, which also has an ALMO. He is right to ask that question and to draw attention to the NAO report on the problems.
I conclude by saying to the hon. Gentleman and the House that the Department and this Government are very strongly committed to ensuring that we get value for money. We all know that resources will be even tighter in future, and that it is estimated that £3.2 billion will have to be spent to get the remaining housing stock to a decent homes standard. There are many other calls on Government money, so we support anything that will weed out inefficiency or anything worse than inefficiency, which is what he hinted at. I look forward to the opportunity of discussing with him how we achieve that in Hillingdon. If there are broader lessons to learn, I am sure that my Department and the Housing Minister will be very willing to do so.
There seems to a rule that we speak right up to the bell, but I think I have covered the main points and I hope that that is satisfactory to the hon. Gentleman. I look forward to taking the matter forward in due course.