The big homes experiment on the Chalcots: the wrangles, hopes and tears of PFI
29 June, 2017 — By Richard Osley
IT’S not hard to see why many tenants living in the Chalcots tower blocks felt they were part of an experiment.
As rain seeped through window frames, mice scurried around some of their flats and lifts fell prone to regular breakdowns, most residents could not understand why they had to wait seven years for a public-private renovation deal to be brokered, let alone begin.
Until the late-2000s, they were living in blocks with unwelcome tags such as “fawlty towers” or Camden’s worst-kept estate, while governments, central and local, and private contractors argued about who would pay to finally give them a safe, secure home.
It was reasonable enough for them to ask why money could not be released in traditional, direct investment to rescue their estate. Instead, Chalcots became a sort of guinea pig in a new strategy of refurbishing council homes through PFIs – private finance initiatives.
Among eight initial projects in the country to bid for cash, it was a step into the unknown. Some called it a gamble with their lives and homes at stake. But the residents could hardly be blamed for welcoming arrangements that would allow repair work to finally begin.
When it did, the then MP Glenda Jackson stood on a podium outside Blashford, pledging that life was about to change. You could detect the weary caution among some tenants who had naturally developed a “believe it when we see it” armour.
While refurbishment undoubtedly brought improvements, the snap evacuation of tenants on Friday possibly trumps all the stories of misfortune that had gone before. It wasn’t meant to be like this, and perhaps unsurprisingly it has led to a new debate about the logic of PFIs.
Chalcots towers before the PFO work and new cladding
The Chalcots deal saw a consortium of companies refurbish tower blocks, with new kitchens and bathrooms installed, and thermal cladding attached to the buildings. Rydon, one of the lead contractors, meanwhile, secured a prized 15-year maintenance contract.
With the deal chopped up during lengthy negotiations, the council retained some of the less lucrative responsibilities, such as gas supply checks and maintaining fire doors.
It has been suggested in recent days that one of the problems facing any investigation into what led to Friday’s unprecedented evacuation will be unpicking which company did what and when, without the council having overall control. This, for critics of the Chalcots deal, is a key drawback to the PFI concept, whatever the final results of the council investigation.
“Clearly it’s [the PFI deal] something we have to look at in great detail now, because it takes you one step away from the direct management of everything that happens in the blocks,” said council executive director, Jenny Rowlands when the Town Hall’s top brass met tenants last Thursday.
Such a sentiment might have come straight from the mouths of tenant campaigners and pressure group Defend Council Housing, which vigorously warned at the time that PFI deals, or stock transfer to the sort of arms-length management organisations formed in Kensington, Islington and elsewhere, would see the council lose track of life on estates.
These arguments were louder in Camden, partly because DCH’s main organiser, the late Alan Walter, lived nearby in Kentish Town. Eileen Short, from DCH, said yesterday (Wednesday): “What we have seen at Grenfell, and to some extent at Chalcots, should mark the end of privatisation, of outsourcing everything, of deregulation. At Chalcots, the tenants warned of problems they were facing but they were never listened to. Tenants have repeatedly not been listened to.”
She added: “Without direct investment, you lose the accountability. This goes from top to bottom. There is a shift in political opinion. You don’t see people rushing to PFIs, in housing at least, any more. People do not want decisions about their estates simply to be about who can bid the lowest.”
In the case of Chalcots, the idea of the best deal emerging from a private market competing for the work was severely tested when the council – after years of negotiations – was left with only one bidder. Two other potential bidders pulled out, apparently not seeing much value in the work ahead. Then, when the bid went to the Labour government at the time, the Treasury decided it was too expensive at £117million, only agreeing to release money for Chalcots when a new package cut back to £66million had been developed.
What was cut out of the deal and how the specification was watered down may now be considered by Camden’s review into what went wrong.
Finance chief Councillor Theo Blackwell said: “Money for council housing has always been restricted by Whitehall. PFIs are long term contracts with many partners. Their inherent complexity is a reason they went out of fashion.”
The wrangling is an unhealed wound for local Labour politicians, who felt boxed into agreeing devices that would bring investment for council housing by the policies of their own government, which had ruled out simple direct investment to modernise estates. Former Labour council leader Raj Chada said: “Everyone should be held to account – the government, the council, contractors. It is perhaps indicative of the PFI nonsense that we had to go through. We should have had and always had direct investment in council housing – something I have argued for more than a decade. I hope the current government will wake up and do what many of its predecessors failed to do.”
Mr Chada was no longer at the council when the work was signed off. Between 2006 and 2010, Camden was run by a Liberal Democrat and Conservative coalition. Housing chief at the time, Chris Naylor, could not be reached yesterday.
Tory ward councillor Jonny Bucknell, meanwhile, also looks back with regret. “I said at the time it was beginning in a blaze of glory and it would end in tears,” he said. “And I think the evacuations are the tears. PFI seemed like a good idea at the time – getting the private sector to take the risk – but no doubt the Titanic seemed like a good idea at the time.” Asked whether people would be surprised to hear a Conservative seem so negative about market forces, he said: “Well, I’ve said in the past that I’m 51 per cent Tory and 49 per cent Labour. What was needed here was not to ask for millions of pounds and trying to do everything. They should have done it a bit at a time. People didn’t necessarily want a new kitchen, they wanted the windows fixed.”
As the New Journal has reported this week, Rydon itself has defended its work on Chalcots. Cllr Bucknell said he felt the company had performed fairly well in running the maintenance contract, and there are plenty of tenants who have no complaints about their living conditions post-refurbishment.
Leasehold flats available in the towers, meanwhile, are available on the private market with a starting price of £550,000; before the evacuation at least. But the sight of hundreds of people forced from their homes has naturally led to arguments from the past being revisited.
There is a potential to take that review right back to the original design of the blocks, constructed in the late 1960s. But the reality was that by the turn of the millennium, Chalcots was badly in need of repair and councillors were in a bind over what to do next. The estate’s problems would regularly be raised in the pages of the New Journal. Perhaps most strikingly, given the context of the current crisis, in 2005 former tenants’ leader Peter Harvey led a tour of the fire safety defects he could spot.
Younger residents, meanwhile, made the film, Tower Blocked, screened at independent cinemas. It reveals what it was really like waiting for busted homes to be fixed. Paul Perkins, a youth worker from The Winch, makes desperate appeals for information as phone calls go unanswered.
The Guardian’s Polly Toynbee, who lives close to the estate, is seen in the film concisely explaining why people simply wanted direct investment and how the government could access it through prudential borrowing. The frustration, meanwhile, is etched on the face of every tenant interviewed in the film.
Mr Perkins was helping out at the rest centre at the weekend. He no longer lives in the towers but is one of the survivors of the saga. He has seen it all – from the broken windows to the day the work started and finished, to this unprecedented evacuation. He has no big complaints about the work. It needed to be done. But having lived through the experience, he retains reservations about the process of PFI deals. “They are opaque in so far as private interests and companies can protect commercial information, hence outsourcing accountability and obscuring transparency,” he said.
Transparency is something council leader Georgia Gould is now calling for. “This arrangement [PFI at Chalcots] is clearly incredibly complex and there are some real questions about it,” she said. “If I’ve taken one thing out of this whole process, it is that the stronger the role the council has as a developer, as a regulator, involved with the capacity we have in-house to ensure that the housing we build is safe, the better. I want us to be a massive public house-builder in Camden but in the future we need to put more responsibility onto the council. Definitely.”