Purpose

An interim contract to deliver the capital
improvement programme for PAM - Internal and External

Content

RESOLVED to:
 
1. 
Approve the establishment, via the use of a competitive
flexible procurement procedure, of a £180m framework
consisting of 3 contractors and for a contract term of up to 4
years (2+1+1), to enable Hackney to deliver Planned Internal and
External Works across the Hackney housing stock.
2. 
The contract award report will be presented to the
Cabinet Procurement and Insourcing Committee for decision.
 
Reasons For Decision
 
1 
Statutory and Regulatory Compliance
Under the Landlord and Tenant Act, the
Building Safety Act 2022, the Fire Safety Act 2021 and the Housing
Health and Safety Rating System (HHSRS), the Council has a legal
duty to provide safe, well-maintained homes for tenants and
leaseholders.
 
The Regulator of Social Housing has given the
council a C3 consumer grading, indicating that tenants and
leaseholders may be seriously disadvantaged if urgent corrective
action is not taken.
Where works can be charged to leaseholders,
the council must comply with the consultation requirements of
Section 20 to avoid legal challenges, financial penalties and
further reputational damage.
 
2 
Safety and Risk Mitigation
The Housing Ombudsman’s 2025 Special
Investigation Report found maladministration in 79% of cases
reviewed and severe maladministration in 26% of damp, mould, and
repair cases. Many of these issues stem from delayed or incomplete
capital works.
Essential fire safety, compliance, and
structural works must be prioritised to reduce the risk of injury,
property damage, and regulatory intervention. Delays in delivery
increase the likelihood of costly reactive repairs, asset
deterioration, and prolonged exposure to hazards for both tenants
and leaseholders.
 
3    Capital Investment
to Support Council Priorities
Capital works underpin Hackney Council’s
wider ambitions for a fairer, safer, and more sustainable borough.
By investing in our housing stock, the Council will:
 
· 
Deliver homes and estates residents and leaseholders can be proud
of.
· 
Enhance neighbourhood safety and liveability.
· 
Build trust in the Council’s housing service by visibly
addressing regulatory failings.
 
4 
Delivery in Line with the Housing Asset Management Strategy
2019–2027
This procurement ensures investment is
targeted at the highest-priority areas, extending the lifecycle of
building components and reducing future maintenance burdens. Works
will be aligned to strategic asset plans while ensuring all
leaseholder recharge works are properly consulted on under Section
20.
 
5  
Procurement and Contractor Capability
Appointing suitably qualified contractors will
enable the council to efficiently deliver high-quality work across
the housing stock. Contractors must be flexible enough to
incorporate resident and leaseholder feedback, meet accelerated
timelines and manage Section 20 consultations for rechargeable
works. Resilience in the supply chain will also be a key selection
criterion, helping to avoid delays caused by labour or material
shortages.
 
6    Resident and
Leaseholder Engagement
These works must be delivered with residents
and leaseholders at the heart of the process. This engagement will
include clear communication of timescales, scope and safety
measures. Section 20 consultation will provide leaseholders with
full transparency on the scope and estimated costs of the works,
building trust and reducing the likelihood of disputes.
 
7    Social Value and
Community Benefits
The procurement will secure additional
benefits such as:
 
· 
Local employment and apprenticeships.
· 
Community investment projects that improve estates and public
spaces.
· 
Skills training for local residents to support long-term economic
resilience.
 
6.8  Sustainability and
Environmental Compliance
The works will contribute to Hackney
Council’s environmental commitments, including the Air
Quality Action Plan, carbon reduction targets and initiatives aimed
at improving the energy efficiency of homes and reducing fuel
poverty.
 
9    Corporate Governance
and Financial Responsibility
This procurement will comply with the
council's standing orders, procurement legislation and corporate
policy. Robust cost control and strong governance will ensure that
the programme is delivered within budget and provides the best
value for public funds.
 
Current Concerns
 
10  Risks of
Non-Delivery
Failure to act risks further deterioration of
housing assets, increased resident and leaseholder dissatisfaction,
and heightened regulatory scrutiny. The Council could face legal
challenges for non-compliance with Section 20 obligations and
statutory safety requirements. The RSH may escalate intervention
measures, and the Housing Ombudsman could issue further severe
maladministration findings.
 
11  Impact on
Residents and Leaseholders
Prolonged delays in addressing capital works
backlogs will exacerbate issues with damp, mould, leaks, and
general disrepair, directly affecting health and quality of life.
For leaseholders, poor consultation and a lack of transparency on
costs could lead to formal disputes and increased complaints.
 
12  Financial and
Operational Consequences
Without timely procurement, reactive repairs
will increase, driving up costs and diverting resources from
planned works. The absence of strategic investment will reduce
asset value, increase long-term maintenance needs, and risk further
non-compliance with statutory and regulatory obligations.
 
Alternative Options
Considered and Rejected
 
Option 1 - Consider
moving to a Long-term Capital Work Partnering Contracts
 
The Council’s capital delivery programme
plays a critical role in maintaining the safety, quality, and
longevity of housing assets, ensuring that residents live in secure
and well-maintained homes. Current contractual arrangements are
nearing their conclusion, creating an urgent requirement to put in
place replacement contracts to avoid a break in service. Without
these arrangements, there is a significant risk of delays to
planned major works, including essential fire safety improvements,
which would directly impact residents’ wellbeing and could
accelerate the deterioration of building assets.
 
To ensure uninterrupted delivery of K&B
capital works until August 2026 with possible year extension, two
new contracts are being procured, with a target mobilisation date
of September. These contracts are designed to maintain programme
momentum, uphold safety standards, and protect the quality of the
housing stock during the transition to longer-term procurement
solutions.
 
Due to the urgent need to establish new
contractual arrangements, the framework route has been identified
as the preferred procurement method. This approach reduces
procurement timescales to approximately 4–6 months, compared
with the 12–18 months typically required for an Open or
Restricted procurement exercise. This acceleration is essential to
prevent gaps in service delivery and to ensure residents’
safety is not compromised. 
 
Any delay in mobilising capital works would
have serious implications for residents and for the Council’s
housing assets. Critical fire safety and compliance works must be
delivered without interruption to meet statutory obligations and to
maintain public confidence. Delays could also increase costs by
placing greater demand on reactive repair budgets. At present, many
projects are being delivered via external framework contracts,
often without associated leaseholder recharges. Not proceeding with
the proposed Planned Capital Works – Term Contracts for
Property and Asset Management would significantly reduce capital
investment in the housing portfolio over the next two years, with
negative consequences for both safety and asset condition.
 
While moving to long-term capital work,
partnering contracts could, in future, offer a more efficient and
sustainable means of delivering the capital programme, but this
approach has been discounted at this stage. The primary reason is
the lengthy mobilisation period, which would delay contractor start
dates and create unacceptable risks to residents’ safety and
to the delivery of essential improvement and fire safety works.
Maintaining business continuity is therefore the immediate
priority.
 
Option 2 –
Procure a Stand Alone Contract for each Project
 
Delivering the capital works programme through
individually procured, stand-alone contracts for each project would
involve conducting separate public procurement exercises. While
this approach may allow for bespoke arrangements for each scheme,
it carries significant operational and timing risks that would
directly impact residents and the timely delivery of essential
improvements.
 
This approach would require substantial
additional staff time and administrative resources to manage
multiple concurrent procurement processes. Each project would also
necessitate a two-stage leasehold consultation for any rechargeable
works, significantly prolonging the mobilisation period before
contractors could commence on-site. The extended timelines would
delay much-needed capital improvement works, including those
addressing critical safety and compliance issues.
 
Prolonged procurement periods would lead to
extended waiting times for tenants and leaseholders, delaying the
delivery of improvements essential to resident safety, comfort, and
wellbeing. The resulting postponement of works could also cause
further deterioration in building assets, increasing long-term
maintenance costs and placing additional strain on reactive repair
budgets.
 
Compared with the preferred option of
establishing a framework, this method would take considerably
longer to procure and require more resources to deliver. The lack
of efficiency and extended timelines create an unacceptable level
of risk in maintaining service continuity and safeguarding housing
assets.
 
Option 3 –
Insourcing the Works to the DLO
 
Insourcing the planned capital works to the
Council’s DLO would require significant restructuring,
expansion of resources, and operational adjustments. This would
need to be achieved within a very short timeframe to prevent
disruption to the delivery of essential works.
 
The scale and complexity of the planned
capital works programme, including statutory fire safety upgrades
and major component replacements, exceed the current operational
capacity of the DLO. Establishing the necessary in-house capability
would require extensive recruitment, training, and mobilisation,
all of which would delay the commencement of works.
 
Any delay in mobilising works would directly
affect residents, leaving essential safety and compliance upgrades
incomplete and increasing the risk of asset deterioration. The
inability to respond quickly would undermine the Council’s
commitment to maintaining high-quality, safe homes.
 
Attempting to restructure the DLO on this
scale within the required timescales carries significant risk. The
operational, financial, and logistical challenges involved make
this approach neither desirable nor achievable for the current
programme cycle.