By Carl Davis
Fiona Fletcher-Smith, chief executive of London and Quadrant (L&Q), who also chairs the G15 group of large landlords, recently wrote to Michael Gove, the UK’s Secretary of State for Housing, to address concerns about the alleged widespread misuse of service charges in social housing. (Inside Housing 10/05/24 and Housing Today 10/05/24).
Her public statement came as a response to accusations set out in a letter from MP George Howarth to Michael Gove, which was composed at SHAC’s behest and countersigned by 34 fellow MPs. Howarth described systematic overcharging as a form of financial abuse and being akin to a new type of benefit fraud.
Fletcher-Smith defended the sector, attributing rising service charges to unavoidable costs introduced by new building safety legislation, which has significantly increased annual service charges per resident. She does not address the widespread inaccuracies in service charge accounts.
L&Q boss Fiona Fletcher-Smith chairs the G15: a cabal of the largest, London-based housing associations. Peabody chief exec Ian McDermott is Vice Chair.
This defence occurs against a backdrop of controversy and criticism surrounding L&Q’s management practices and workplace culture, as well as Ms Fletcher-Smith’s leadership style.
Last summer, as the L&Q boss, she was publicly carpeted and criticized by Michael Gove for failing to listen to tenants and for treating disabled and vulnerable tenants unfairly (Housing Today 28/07/23).
The Housing Ombudsman’s damning Special Investigation report that led to this scathing criticism found L&Q to be heavy-handed, unfair, and dismissive. There were particular criticisms of the landlord’s approach towards tenants with disabilities or mental health issues.
The introduction to the report also highlighted how L&Q had leveraged Ms Fletcher Smith’s role as G15 chair to threaten the Ombudsman during the investigation.
Adding to the complexity, L&Q had embarked on a decade and a half -long corporate journey marked by significant expansion through mergers and acquisitions. This growth failed to achieve the promised economies of scale and diverted attention and resources away from essential maintenance and repairs.
The focus on growth, replicated elsewhere in the sector, comes at the expense of existing tenants and widespread neglect of properties. It is accompanied by an equally heavy handed and dismissive approach to health and safety and addressing disrepairs. Substantial, though unaudited, legal expenditure has drawn accusations that the organization is systematically mishandling complaints whilst relying excessively on law firms like Devonshires to manage disputes and silence criticism. All this helps L&Q and others maintain the massive power imbalance between the landlord and its tenants.
Amid these operational abuses, rampant corporate ambition, self-sabotage and wider economic challenges, service charges have surged. These have been further fuelled – as Fletcher-Smith tells Gove – by rising building insurance costs and uncapped business energy tariffs, along with increases in professional fees.
Fletcher-Smith calls for yet more government (taxpayer) support, including the potential for the government to act as a re-insurer to help reduce premiums. This underscores the financial pressures faced by housing associations in maintaining safety and service standards in the face of escalating costs and the heavy-handed incompetence of boards and executives.
Find out more about SHAC’s campaign to #End Service Charge Abuse
The sector’s leadership lacks the competence to manage their existing homes and effectively develop new estates. When this is called out, they resort to barefaced lies and deception to try to shift responsibility for their predicament onto others, primarily blaming the victims.
The drive to grow the already mountainous surplus amassed by housing associations over the last few years continues. Leaders have prioritised their own, narrow corporate needs over the sector’s founding values and social purpose. Gone is the desire to provide safe, affordable housing, with rents reinvested in improving the quality of the homes. Gone are transparency and fairness in tenant relations.
The correspondence between Fletcher-Smith and Gove reflects an effort to defend the sector against claims of systemic fraudulent mismanagement of service charges as the voices of campaign groups like SHAC and others escalate the call to end service charge abuse.
Her defence is not helped by the recent Tribunal finding that tenants had been systematically overcharged management fees by their landlord Notting Hill Genesis, a G15 member – exactly as George Howarth’s letter describes.
11 May 2024
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