Tower Hamlets Watch

Poplar Harca Contractor investigated for Fraud | August 5, 2010

United House Ltd one of the contractors who won a huge slice of Poplar Harca’s £445 million pound contracts for Housing development and Regeneration across its nine estates is being investigated for fraud by Islington Council.

Islington council are launching a fraud inquiry into its two “Private Finance Initiative (PFI)” schemes over concerns raised by Leaseholders with regards to overcharging and quality of work;

“Charges to leaseholders under Islington’s PFI scheme are capped at £10,000, with the PFI consortium covering the rest.

Dr Brian Potter, chair of the Islington Leaseholders’ Association, said: ‘Some of this work would have £40,000 spent on it and you wouldn’t believe it, it was just a coat of paint and a couple of new windows.’

The probe will look at whether consultation procedures were followed, bills were accurate and on time, errors in leases were identified and leaseholders contacted, and whether building and planning regulations were complied with.” – Islington launches fraud inquiry into housing PFIs Inside Housing Magazine 23/07/10

These allegations seem to have been going on for some time and United House Ltd., Kent, who won a multiple awardees contract award from Poplar HARCA in December 2009, have been implicated in numurous breaches of rules and regulations. It would seem that council officials from Islington also have come under suspicion for covering up the scandal;

“London, Islington, August 2008: HBOS owned Partners For Improvement in Islington (PFI Ltd), and their Head of Quality, Ed Butler, acting in cohort with Nic Treble from United House Ltd, have “passed off” part of the £ 350 million Islington Decent Home works as “meeting FULL AVAILABILITY” standard for works that Independent Regulators (CORGI) and Islington’s own experts have condemmed as a

“danger to life and property” (CORGI)
“criminal ”
“non-compliant with statutory requirements” and
“down right dangerous

Even though Islington’s Chief Executive, John Foster, and Islington internal Anti-fraud officer,Jim Hodges, have been handed Enforcement, Inspection and Expert Reports which evidence that false certification documentation was being used to obtain public funds (and also enhanced performance bonus payments) we understand that nobody from the PFI consortium, no officer from Homes for Islington who failed to verify compliance and performance, nor a single officer involved in Islington Council’s bodged cover-up have been interviewed under caution or have been suspended pending an investigation by Councillors or the owners of the PFI .”


…..Please click on the link above it makes for fascinating reading.

Price Waterhouse have been brought in to investigate the claims made against United House, as an internal investigation by United House found no proof of the claims.
Well no surprise there..I wonder has any one of these internal investigations ever revealed a crime?

A National Audit Office report into Housing PFI’s has revealed that Islingtons only two PFI schemes costs have spiraled since their original business plans were put forward, one as much as 3 times as large.
Over both schemes the costs have gone over by as much as £160 million pounds.

Not only is United House under a cloud of suspicion but so are some of the other 14 successful bidders into Poplar Harca’s round of £445 million pound contracts for Poplar.

An Office of Fair Trading investigation over a 5 year period revealed that at least a 100 top construction firms were colluding to overcharge local authorities and major building projects;

“The infringements affected building projects across England worth in excess of £200 million including schools, universities hospitals, and numerous private projects from the construction of apartment blocks to housing refurbishments.” – OFT press release 2009: Construction Firms fined for Illegal Bid-Rigging

“A firm that did not want to win the contract would submit a price that was much too high. In some cases, the successful bidder would then reward them with a secret payment.Cover pricing meant the tendering authority, which could be a local council or other customer, received a false impression of the level of competition and could end up paying inflated prices. The OFT found 199 offences where the 103 companies artificially inflated £200m worth of work.” – The Guardian 22 September 2009

Despite these firms being fined a total of 129.5 million between them, the average fines were a mere 1.1% of these firms global average turnover. So just a smack on the wrist after an investigation costing millions and taking over 5 years, revealed these firms were colluding to cheat the taxpayer out of millions. What galls me, is they even though they were caught “bang to rights”, that because they admitted their guilt, their fines were reduced, some with upto 50% to 65% leniency in discounts on the scale of their fines, because they admitted it.

“Eighty-six out of the 103 firms received reductions in their penalties because they admitted their involvement in cover pricing prior to today’s decision.” – OFT Press Release 2009: Construction firms fined for illegal bid-rigging

At least two others (Durkan Limited & Galliford Try) on Poplar Harca’s special list of successful bidders taking a share of the £445 million pound pot were part of the OFT investigation into over a 100 construction firms and were caught out colluding to push up prices on Local Authority Projects. Durkan Limited were fined £6,720,551, and Galliford Try, £8,333,329.

So I wonder how does Poplar Harca feel about dealing with companies that have been caught up in schemes that implicate them in what seems to be apparent fraudulant activities to fleece the taxpayer out of milions of pounds?

Oh I forgot to say….one last side note. After winning part of the £445 million pound contract to increase the density and misery of those already living in Poplar, Poplar Harca’s successful bidder “United House Ltd” then went on to sponsor the “Tenant Empowerement Team of the Year Award” as part of this years Housing Heroes Awards 2010……

….Poplar Harca’s “Resident Engagement Team led by Fintan Tynan” , won the award this year.

Funny that..

1 Comment »

  1. This articles very interesting and I dont think media give this enough coverage, most Harca residents probably don’t know things like this happen.

    Comment by wain — September 5, 2011 @ 4:46 pm

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