Call for 'independent' body to investigate housing overcharging allegations
Claim that overcharging inquiry will be ‘whitewash’
Published: 14th January, 2011
by TERRY MESSENGER
HOME-OWNERS are furious at a decision to appoint a team from Homes for Islington to investigate allegations of overcharging in a £200million housing repairs contract, claiming that the organisation cannot be trusted to stage an impartial inquiry.
The controversy arose after Islington Council replaced investigators from private audit firm PwC with officials from HfI, who will now carry out the probe.
Islington Leaseholders Association (ILA) chairman Dr Brian Potter said: “This is the fox being put in charge of the chicken run. It’s going to be a complete whitewash.”
But Islington Council insists that HfI is “perfectly well qualified” for the task and can do it much cheaper than PwC.
Councillor James Murray, Labour housing chief, said: “We have to be very conscious about spending leaseholders’ and taxpayers’ money.”
The investigation was ordered in 2009 after the council received allegations of fraud against Partners for Improvement in Islington (PFII), a private venture which is undertaking a project to refurbish more than 6,000 street properties owned or formerly owned by the council.
PwC was asked to investigate an unspecified instance of alleged fraud in 2009 by the previous Lib Dem council administration – and to look into the separate issue of claims by leaseholders – owners of former council homes – that they had been overcharged for work on their properties.
The PFII project began in 2003 and HfI has been monitoring work done and bills charged since 2004.
ILA would prefer PwC to carry out the investigation, as HfI has been overseeing the work for five years without quelling the suspicions of overcharging.
But in a move which has only just come to light, the council replaced PwC with HfI in October last year.
Dr Potter argued: “The PFII operators were supposed to have been monitored by HfI for all those years. Well, what has HfI been doing?
“Investigations at this sort of level should be done by an outside source. It should not be done in-house.”
Islington Conservative Federation secretary Oriel Hutchinson discovered the switch recently when talking to a housing official.
She said: “It’s obviously a conflict of interest when HfI has been performance-managing the contract. You can’t have people investigating themselves, in effect.”
And leaseholder Katy Newsome added: “It’s a case of HfI marking their own homework.”
PwC produced an interim report in September which found instances of overcharging in a small sample of cases examined, but no evidence of the unspecified fraud allegation.
PFII is a consortium comprising builder United House, bankers HBOS, Rydon Property Maintenance and project manager Hyde Housing Association.
A council statement justifying the original inquiry explained: “During 2009, a number of complaints were received from leaseholders and members of the public.
“These related to allegations of fraud at United House, the refurbishment partner within PFII, and concerns that work carried out to leaseholders’ properties had either not been carried out at all or had not been carried out to the required standard.”
Cllr Murray insisted that PwC’s role was to look at the fraud allegation, which had now been dealt with, and HfI was capable of taking up the reins on the issue of overcharging.
He said: “We need to make sure now that HfI looks at a much wider sample to see how widespread the problem is.
“The most important thing is to make sure the leaseholders are confident the work Partners is doing to their properties is carried out properly and billed correctly.”