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Islington Gazette,
Thurs, Feb 27, 2014
Council housing
Why not withhold PFI payments?
“[It] seems to be a pretty unsatisfactory contract,” “We’ll see what our options
are,” “We need a plan of management” and “We want to be transparent whenever
possible” (!) Cllrs Richard Watts and James Murray (housing) were speaking
about the council’s PFI (private finance initiative) housing-management
contract with Partners at a recent angry town hall meeting with council
leaseholders.
The council isn’t only an estates’ landlord. The PFI is the two-part contract under
which the majority of the borough’s 6,500 street properties are managed – many would say mismanaged. It doesn’t expire until 2033, by which time it will have cost the general taxpayer upwards of £720 million – some estimate about £1billion, allowing for interest payments incurred over its lifetime.
Bad enough? Now for the alleged sting in this nasty scorpion’s tail: “There’s ‘an eight-digit financial penalty for ending that contract.”
So here we have it – “We wouldn’t sign that kind of contract now,” but it’s too expensive to cancel. Who, one wonders, is advising the council? This is money paid by all Islington taxpayers, not only residents of the council’s freeholds. As for political will, where were the dissident voices when Gordon Brown was pushing PFI?
Ironically, the question to which Cllrs Watts and Murray gave the above answers wasn’t about the lifecycle of the contract – though searching questions need to be asked about that – but the suspension, on grounds of breach of contract, of the monthly payments by which Partners receives its guaranteed PFI monies.
Since Cllr Watts agreed that it’s “pretty clear” that work carried out by United House,
“particularly in the first round” of the contract, was “not good enough” – there was, “frankly, some pretty shocking work” (he should see some second-round examples) – why is the council refusing to consider withholding such payments?
As the questioner asked, how can a contractor (Partners) “fail to deliver with such impunity?”
If, as was stressed at the meeting, Islington wants to be a “responsible landlord”, the politicians will have to go further than this.
Meg Howarth,
Ellington Street, N7