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RESOLVED:
 
1. 
To approve the business case and direct award of a
contract via Fusion21 Framework ‘Building Improvement
Works’ for Kitchen’s and Bathroom’s Works to
Wates Property Services Limited at a value of £3,000,000 for
1 year with the option to extend by one further year at the
Council’s absolute discretion.
2. 
To approve the business case and direct award of a
contract via Fusion21 Framework ‘Building Improvement
Works’ for Kitchen’s and Bathroom’s Works to
Chigwell London PLC at a value of £2,000,000 for 1 year with
the option to extend by one further year at the Council’s
absolute discretion
3. 
Also to be noted that an annual report on the
performance of these two contracts, as well as the tracking of the
social value commitments, will be presented to Hackney Procurement
Board annually.
 
 
Reasons for
Decision
 
The reasons for proposing this capital work
procurement option are set out to include consideration of:
 
· 
The need for the Council to fulfil its legal obligations as a
landlord for the maintenance of its homes and estates;
· 
The opportunity for capital investment works to contribute to
broader Council ambitions of creating a fairer, safer and more
sustainable Hackney;
· 
The ambition is to ensure
 
The key deliverables for this procurement
are:
 
· 
Procuring construction services to ensure the Council can invest in
homes to fulfil its legal obligations as a landlord;
· 
Procuring these contracts in line with the provisions of the new
Housing Asset Management Strategy 2019-2027;
· 
Provision of cost-efficient, quality-driven related works across
the entire housing stock, which are focussed on the greatest
investment need, and meet all relevant technical standards;
· 
Appointing contractors who are suitably flexible in their scope to
respond effectively to resident consultation suggestions for works
to homes and estates;
· 
Maximising the indirect social value from these contracts through
local employment, community investment and resident satisfaction
with the quality of their homes and local area;
· 
Ensuring that capital works can support the Council’s broader
sustainability objectives, such as the air quality action plan, as
well as improving the energy efficiency of homes to reduce fuel
poverty;
· 
Ensuring compliance with the Council's Standing Orders, Regulatory
Procedures, and the Council’s Corporate Policy.
 
The proposed contract is intrinsic to
meeting the Mayor’s priorities for a fairer, safer, and more
sustainable borough. These priorities include the Mayor’s
vision that everyone in Hackney has a good-quality and stable home
and the commitment to ensuring the Council continues to invest in
and make the best use of its housing stock to provide the homes,
blocks, and estates in which people want to live and are proud
of.
 
The proposed contract is a key driver
in managing and maintaining Hackney’s housing stock
efficiently and sustainably. This procurement strategy is aligned
with the objectives of the Housing Asset Management Strategy
2019-2027. The strategy sets out capital work objectives for
investing in our homes and estates, the ambitions that Hackney has
for the quality of its homes and the related priorities to ensure
that the limited available resources are directed at the greatest
need. This investment includes fire safety and energy-efficiency
measures that are essential to providing homes that are safe,
decent, and fuel-efficient for our residents.
 
The Landlord and Tenant Act 1987
places a legal duty on the Council for the repair and maintenance
of the Council’s homes and estates. The new contracts make a
significant contribution to undertaking this statutory
function.
 
The capital works to support the
Asset Management Strategy, which sets out the objectives and
priorities for investment in the existing housing stock and other
Housing Revenue Account (HRA) assets and the financial parameters
for the planned investment programmes.
 
Summary of Procurement Process
Used
 
Due to a reduction in budget
availability for this financial year, as detailed within 4.5,4.6
and 4.7 above,  the scope of this
contract has been reduced from internal and external works to
internal works only. There are currently circa 285 properties
covering the High and Low Risk Hackney programmes for 2025/26, that
require domestic kitchen renewals and bathroom renewals within the
current financial year. They will also incorporate works to rectify
possible hazards to residents in the home, including damp and
mould. The high risk programme also covered internal fire safety
works. The appointed contractor(s) will be required to complete all
properties within a 30 week period as a minimum.
 
A procurement strategy was agreed to
deliver a short term internal works only contract across high and
low risk programmes of work, with one contractor for each
programme. Given the time constraints to secure a contract, it was
agreed by the Housing Service that a direct award call off
opportunity be issued under Fusion21’s Building Improvement
Works Framework (Contract Notice 2023/S 000-025888) Lot 9 and Lot 1
- Kitchen and Bathrooms. It is proposed to set a contract term of
up to 2 years (1+1).
 
The Fusion21 Framework, and this Lot
has been successfully used by the Council previously for this scope
of work and allows direct awards. 
 
The Fusion21 Framework is a highly
competitive framework which allows access to a discounted set of
rates and charges due to the volume discount that was secured under
competition. Additionally Hackney has secured an independent
professional opinion from a leading QS that the rates are
attractive when benchmarked.
 
On 7th October 2024 the Cabinet
Procurement & Insourcing Committee 
approved the Business Case (Key Decision CHE S393) titled Planned
Capital Works Contracts for Property Asset Management, for up to
£180,000,000. As a result of financial challenges that came
to light in early 2025, a reduction in scope was needed to ensure
continuity of delivery with the budget challenges at hand. The
table within section 4.7 highlights reduction in scope that was
needed and the changes between the Business Case and this award
report. This award falls under this Business Case.
 
Alternative Options
Considered and Rejected
 
Option 1 - Consider
moving to a Long-term Capital Work Partnering  Contracts
In March 2025 the team reviewed
procurement time for a flexible competitive procurement exercise.
This option would take over 12 - 18 months to achieve, whereas the
external framework route could be completed in 4 to 6 months. At
this point in time, the use of an external framework route is
preferred because of the urgent need to mobilise new contractual
arrangements.
 
The Council must continue the capital
investment programme to prevent delays in major repairs and ensure
that essential safety projects are carried out promptly. Delays in
capital projects could also lead to extra strain on repair budgets.
Therefore, not proceeding with the proposed Planned Capital Works -
Term Contracts for Property and Asset Management would
significantly reduce capital investment over the next two
years.
 
While this option may, in the long
term, provide a better route to delivering our capital work
programmes, it was rejected at this point due to the length of time
it would take to get contractors on the ground and the risks
associated with the need to deliver much-needed capital improvement
work and essential fire safety work.
 
With the level of budget currently
available, this option would not necessarily be feasible. However,
Procurement has advised that a framework agreement or long term
capital works partnering contract should be established, and with
no guarantee of work, the contract would be in place for the time
when the budget is available to deliver larger programmes of
work.
 
A Business Case was approved in
October 2025 to establish a framework agreement for 2+1+1, and work
on the procurement process will be undertaken shortly. The Capital
Works Partnering Contract is also currently being discussed between
Procurement and PAM. This option has been included on the
procurement pipeline for the longer term consideration for
provision of capital delivery across PAM.
 
Option 2
–  Procure a Stand Alone Contract
for each Project
 The
option of carrying out individual procurement exercises on a
project basis awarding a contract for each property was rejected,
as this would involve significant work in carrying out public
procurement exercises, which require additional staff time. This
option involves an individual tender process to let any capital
work. Furthermore, this would include the two-stage leasehold
consultation, where work is subject to recharge, which means
extended contract mobilisation onsite.
 
Generally, this option requires more
resources than the preferred option to use an external framework,
and would take much longer to procure resulting in extended wait
time for tenants for much needed capital improvement work.
 
For the reasons above, this option
was rejected as the main course of action, though the Council may
elect to pursue it if conditions arise.
 
Option 3 –
Insourcing the Works to the DLO
The option of in-sourcing the planned
capital works is not viable. The scale of the work and risks
associated with it makes it neither desirable nor possible to
restructure the DLO in time to carry out this work. This option was
rejected because it was considered undeliverable within the
timeframe.