CROYDON IN CRISIS: The housing repairs contractors who were at the centre of the Regina Road council flats scandal are walking away from their new £21m per year deal two years early.
EXCLUSIVE by STEVEN DOWNES
Less than a year since they were handed a juicy multi-million-pound four-year contract renewal, Axis, the council’s much-criticised housing repairs contractor, have decided to quit the deal early – and probably before they can get sacked.
It will leave the cash-strapped council – and whoever is in charge of the Town Hall after May’s local elections – with a huge problem of finding someone – anyone – to replace them.
Axis were mired in a national scandal last year when the damp, mould and disrepair of Croydon council flats in Regina Road caused a public outcry after being featured on TV news bulletins.
Independent consultants were hugely critical of the council’s housing department and their repairs contractors. In a damning report they said that the council and its contractors failed “to deliver even basic ‘core’ housing services effectively… potentially symptomatic of poor performance across the council’s housing service”.
Among their key findings, the consultants said that there was “a poor operating culture with a lack of care and respect for tenants”.
Signs posted: Repairs contractors Axis were among those who earned the anger of Regina Road residents
Axis was guaranteed £21.4million-worth of business from Croydon each year, almost regardless of the number of repairs they had to perform, or the quality of their delivery.
According to Town Hall statistics that were used to justify the contract extension, the council was claiming that Axis had been exceeding all their performance targets. Given the context of what was discovered at Regina Road and elsewhere in the council’s housing stock, such figures clearly had little basis in reality.
A possible explanation for the council’s self-satisfied approach to Axis was to be found in other figures which showed that just 1-in-10 of the maintenance jobs undertaken by the contractors was ever monitored or checked.
Axis fan: Alison Butler
The council cabinet member in 2020 who recommended the multi-million-pound contract extension for Axis was Alison Butler. Butler, the loyal council deputy leader to the discredited Tony Newman, remains a Labour councillor today.
As recently as February 2020, Butler was reporting to the council’s scrutiny committee that everything was absolutely hunky-dory with Axis and the repairs service. “Customer satisfaction with the repairs service had improved,” Butler claimed.
Croydon first awarded the borough-wide maintenance contract for all council properties to Axis in April 2014, under the then Conservative-controlled council.
The contract was supposed to be worth almost £150million over its initial seven-year term.
But last Friday night, the council sneaked out an announcement. Describing Axis as their “responsive housing repairs provider”, disingenuously the council said, “Following discussions with Axis, their… partnership will now end in 2023.”
But according to senior sources in Fisher’s Folly, those council “discussions” were in fact Axis saying “Cheerio!” and scarpering for the exit door as quickly as they possibly can.
The council propaganda department’s spin went along these lines: “Until 2023, Axis will continue to carry out repairs on behalf of the council and contribute to its joint housing improvement programme. Both parties remain committed to working together to make sure council tenants do not experience any gaps in service during the transition period.” Which would make a pleasant change.
Perhaps an indication of the hapless and clueless nature of what is left of the procurement department in Fisher’s Folly, council chiefs are now asking residents – the very people they routinely ignore – for their help.
“Residents will now also be invited to get involved in helping to shape the council’s contract with its new repairs provider, to ensure that they are at the heart of the service,” the council statement simpered.
‘Journey’: Patricia Hay-Justice
They’ve even come up with a non-ironic email address for the purpose: residentinvolvement@croydon.gov.uk
The council press release quoted Patricia Hay-Justice, the cabinet member who had the misfortune to inherit the spectacular clusterfuck that was Butler’s legacy on housing.
According to Hay-Justice, Croydon is “on a journey”, a “wide-reaching housing improvement journey”. She said, “By listening to our tenants we will ensure any future repairs contract will prioritise the aspects of the service they identify as most important.”
Which is councilspeak for them looking for parts of the maintenance contract that they can drop from any future deals, to save a few bob here and there.
The council now faces a 12-month scramble to identify and evaluate an alternative service provider and to agree terms which the authority – which is currently hacking chunks out of its operational budget – can afford.
With less than a handful of outsourcing firms offering the kind of borough-wide repairs service that Axis was supposed to deliver, Croydon might need to find other ways of maintaining its buildings. But time is not on their side.
Our sources in Fisher’s Folly confirmed that Axis jumped before they could be pushed.
Reverse gear: the council now needs to replace Axis in less than a year
“Axis could see the writing on the wall,” said one. A newly appointed council official responsible for ensuring terms of contracts are being met has, apparently, already started to make an impact.
But as the council source points out, “While I think the council should have been showing them the door, the timetable for sorting out new arrangements for repairs is pretty demanding. Even smaller and better landlords would take more time to determine a repairs contract like this,” they said.
“Whoever takes charge of the council after May’s elections will not have as wide a range of options as would be ideal. My fear is that Croydon won’t have time to do anything more than a conventional tender for the whole service. I have my doubts whether any of the other scale players are likely to be better than Axis.
“It could all be very risky, even for a better-run local council than Croydon’s.”
And the source also warned that the service being provided by Axis over the next 12 months now that they have decided to quit could be well below even their low standards. “Suppliers tend to lose the plot once they know they’re on the way out, and I don’t know what Croydon’s strategy is for mitigating that in relation to Axis.”
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Read more: ‘Shoddy’ botched repairs as council housing scandal deepens
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They are both as crap as each other…
This is an opportunity to bring the management of the work back in house and offer the delivery of the work to specialist local small businesses.
Residents deserve a better service, and they need to be able to hold those managing it to account to ensure that service is good enough. Residents’ and tenants’ associations should be able to call in their local councillors and feed in directly to senior managers at the Council to report on performance.
Delivery shouldn’t be farmed out to another multinational firm who only specialise in cutting costs, not upping service. We need to support local businesses and break up the type of work needed to allow them to bid for it. This will not only bring opportunities for jobs and skills to grow in Croydon but also keeps a stronger link between those delivering the repairs and their neighbours who need them.
If the Council just pushes this work out to another large contractor then this will be a missed opportunity and it’s Croydon residents who will suffer the consequences.
A sound proposal but a very challenging one. As someone working in the sector, I doubt there are the competent housing management staff in the market at an affordable rate to be able to establish such a unit. The whole point of the major single supplier offer is that the contractor is able to deliver all of this. Unfortunately the race to the bottom in the lowest price procurement battle means that inevitably subeconomic bids are submitted – now worsened by supply chain issues and inflation.
The solution might be to collaborate with an adjacent borough with an established housing management team to assist taking it forward, but collaboration with other boroughs has never been one of Croydon’s strengths.
Breaking up these major contracts and moving away from the lowest price option is proven to work well, but it takes courage and tenacity to make it work. Dealing with an array of small local contractors can be just as challenging as dealing with a single major national entity. Small contractors are rarely used to working to council policy & standards, can struggle to deliver to a large social housing estate and need the resources to be able to invest in ERP systems.
While the report below doesn’t primarily address issues of housing management there are essential themese that can be taken from it.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1041002/Constructing_The_Gold_Standard_Final.pdf
I agree that this change would be challenging, but equally Croydon has suffered for decades because the Council has chosen the easy option. There comes a point when we have to say enough is enough, we deserve better.
I know that Brighton and Hove Council are already doing this, and I hope other councils are as well. So we do need to learn from them about the difficulties and challenges they have faced, as well as possible solutions.
We also need to open up the conversation with local businesses about what they might be capable of delivering and what support they might need. It is worth the Council investing in support for local businesses to enable them to take on this work as this will lead to a better quality of service and provide skills and jobs for Croydon residents.
I see that the document you linked to is 135 pages long and these types of contracts are not one of my areas of expertise. So I won’t comment directly on it, but I agree it is also something we should be looking at to identify lessons that can be learned.
How about employing small, local firms and giving some jobs back in the borough, instead of to bigger operators? Quality not quantity. Actually, actually involve the actual people in the actual community. Actually.
Axis took on a contract paid for by the tax payer and, presumably, had made commitments in terms of scope. Clearly they have failed, but why has it taken so long to uncover this? Who was responsible for overseeing this contract and what were the key performance indicators by which to judge and pay Axis? And what efforts are being made to claw back money inappropriately paid? Or will all this just be blamed on the old regime? As if……
“Never in the field of human conflict has so much been taken from so many by so few.
This should be set in stone in the entrance of Croydon council lovely new HQ.