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On a Hyde Housing estate in Sidcup, Kent, the housing association has charged tenants £140,398.68 for emergency light testing, servicing, and repairs work over a period of four years. All of those in the properties are on social rents.
The charge equates to £2,924.97 per day. The work is carried out one day per month by a tradesperson paid £120 per day. Hyde charges a 15% management fee which equates to £438. The remaining £2,486 is presumably pocketed as pure profit by contractors.
Hyde is charging £2,924.97 per day for work being carried out by a tradeperson paid £120 per day.
Tenants are being fleeced to an extortionate degree, and because a large proportion of tenants in the affected properties are receiving benefits to help pay housing costs, taxpayers are also being ripped off. Hyde takes its cut, and the contractors rake in their own profits.
Hyde’s Service Charge Excesses
Complaints of this nature against Hyde are not new. Similar cries are heard about other housing associations across the sector too. This is an extreme example, but all cases raise questions about the financial relationships between housing associations and the contractors they hire for mass service provision.
Hyde’s latest financial statement, 2020-21, shows that it has a core operating income of £272.6 million, available liquidity of £907.6 million, and a core operating surplus of £85.4 million.
The landlord awards contracts for a host of different activities, from construction, to maintenance, to homelessness service delivery.
Taking into account its mighty purchasing power, tenants and residents should receive excellent value for money. Instead, the charges rocket without explanation.
Profiteering and Cynical Exploitation
There are many examples of what appear to be extravagant profiteering by sub-contractors across the sector, but Hyde holds top spot for the level of extortion and the number of different ways it has found to extract additional cash from tenants and residents.
It is not surprising that so many now question the robustness of Hyde’s procurement processes, and ask who is really benefiting.
Since the Grenfell fire in 2017, many landlords have sharply increased charges for even the most basic of fire safety measures, but with little observable change in service provision. In a cynical turn that is now all too common, a tragedy that cost the lives of scores of tenants is being exploited to provide a profitable income stream, with tenants and residents footing the bill.
Hyde’s tenants have lost all trust and faith in its ability to manage service charging – with very good reason. Based on the evidence sent to SHAC, there is by extension something seriously wrong with Hyde’s procurement systems too.
Procurement systems are often found to be weak, sometimes to an extent that suggests collusion by the landlord. In another case, a group of directors created three separate companies all sharing the same three directors. This allowed them to regularly submit three ‘bids’ for construction work to meet the landlord’s procurement rules which required them to get three quotes for all works. It allowed the same three directors to always win when the contract was awarded. It is hard to believe that the landlord was unaware of this sleight of hand.
It is time for legislation to be tightened to make housing associations genuinely accountable to the tenants and residents paying to maintain them. And it is time for elected politicians to stop turning a blind eye.
SHAC@Hyde – Fighting for Improvements
SHAC@Hyde meets monthly to discuss issues with the landlord and develop campaigns to address them. All meetings are advertised on the Events page. To join the group and receive an invitation, please register with SHAC here.
21 October 2021
Disclaimer: The views and opinions expressed in our Blog are those of the authors and do not necessarily reflect the views and opinions of the Social Housing Action Campaign (SHAC).