Decision Maker: Cabinet Procurement and Insourcing Committee

Outcome: For Determination

Is Key Decision?: Yes

Is Callable In?: No

Date of Decision: October 6, 2025

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.