'A regular and sustained practice of overcharging'.
In 2022 Lambert Court took Accent Housing to the First Tier Tribunal to determine whether service charges were 'reasonable'.
TRIBUNAL VERDICT: REPAIRS
Assessment of repairs: ESH Construction at Lambert Court.
- Not a single invoice was genuine - inflating charges by 81%.
- A contracted discount of 4.92% had not been applied to over 70% of all repair work.
- Additional work had been included in major works and charged for but not undertaken.
Lambert Court - an isolated example?
In 2017 ESH Construction were contracted to undertake repair work to all Accent Housing properties in the North of England. That contract was worth £28 million.
In 2022 they were discreetly removed from the contract .
Is it really credible to believe that the scale and extent of overcharging exposed to the tribunal is restricted to only Lambert Court? Overcharging I have alleged is fraudulent.
Consequences of exposure.
Paul Dolan CEO and all board members were informed of suspicions two years ago of fraudulent activity. That included letters sent from Rachael Maskell MP for York to Paul Dolan addressing the very issue Simply ignored.
Sarah Ireland (Executive Director) admitted other estates have the same problems but 'not to the same extent' as Lambert Court'. That is acceptable?
Richard Wilkinson (Non Executive Director) has documented work being charged for on his estate but not undertaken. Yet he has chosen to ignore it?
Michael Long (Homeownership officer) has admitted he is aware that the practice occurs elsewhere, Harton Lea was cited. His explanation for 'overcharging' - 'a few invoices had slipped through'.
Promises
Sarah Ireland promised two things at a meeting at Lambert Court. An 'investigation and audit of the Esh contract' across all estates and all the requested invoices for work to Lambert Court.
Neither of those promises have been fulfilled.
Those promises were confirmed in two emails;
Sarah Ireland Executive Director
email 23/12/2022. 'We will be undertaking a full audit of works delivered by ESH and associated charges levied for these.'
email 20/01/2023. 'Those estates that have left for right to manage. 'I have confirmed to Julie Wittich that these should be included in the investigation and audit of the Esh contract.'
Backtracking
Julie Wittich's response was surprising.
.... 'Sarah Ireland did not at any point in time indicate that we would undertake an independent investigation into any fraudulent practices.'
Reference shoud be made to earlier emails. Julie Wittich continues.
..... 'I have been very clear that there is absolutely no indication whatsoever that any fraud has taken place in relation to transactions with our contractors.'
No explanation as to how that conclusion was reached ignoring all the evidence produced to the Tribunal
Refusal to provide invoices
The request for invoices for work undertaken to Lambert Court is being denied despite Sarah Ireland promising 'We will provide you with the additional information that you require.'
It is disturbing when the two most senior executives of Accent Housing demonstrate such a complete lack of integrity.
Without a genuine independent investigation across the area covered by the contract with ESH Construction residents will not know the 'extent' of the problem and how much they, themselves, could have been overcharged going back six years.
They are simply relying on the uncorroborated words of Julie Wittich.
Robert Bloom (Head of homeownership) once defended the 'sustained' practice of overcharging by claiming it was only 'some minor incidents of mis-coding.'
Not one invoice produced over a two year period was genuine.
As documented on this site employees of Accent Housing will lie to cover up unscrupulous practices.
Residents at Lambert Court were charged £946.73 for changing 12 standard 75W lightbulbs.
The schedule of rates dictates a cost of £6.47 for changing each individual bulb. ESH Construction would have had to replace 146 lightbulbs to justify that cost. They replaced 12.
This problem was initially queried with Robert Bloom, Head of homeownership, prior to taking tribunal action.
'you will be aware there is more to it than just changing a lightbulb'.
It turns out that, actually, there is nothing more to it than just changing a lightbulb.
Robert Bloom is head of sales and homeownership.
This money was refunded as part of the recognised systematic overcharging on repairs by ESH Construction.
ESH Construction
ESH Construction are based in County Durham and were awarded the contract for repairs to the North Eastern region in 2017. That contract covered estates across West Yorkshire, the North East and North Yorkshire including Lambert Court in York.
They also had repairs contracts with other major housing associations including North Star Housing group with over 4000 properties involved. Emma Speight Executive Director of Assets and Growth at North Star Housing Group has been made aware of this issue.
Most repair contracts to leasehold properties are based on a schedule of rates produced by the National Housing Federation (NHF). £1.4 billion is spent on repairs across all Housing Associations using this system. Each individual piece of work has a cost attached which covers all aspects of that work - except importantly travel time.
More information on the schedule of rates;
Tenants in rental properties have fixed service charges and encounter a different set of problems to leaseholders.
Accent have a set price per property contractually agreed for individual works for tenants. Contractors will not spend above this and Accent will not cover any shortfall. Accent claim any underspend which is never refunded to tenants. Accent never overspend. This is why the repairs service to general needs property is so bad and is almost impossible to improve without some radical intervention.
Underlying problems with contracts
The problems with overcharging on repairs stem from the inherent flaws within the initial contract set out in 2017. ESH Construction offered a discount of 4.92% on the listed rate. They are based on average 140 miles from the sites on which they are committed to work.
The charge that residents receive is entirely dependent on the rate that ESH Construction 'select' as applicable. The tribunal agreed that no invoice or applied rate was ever checked.
Sub contractors generate their own invoicing. Equate this with the restrictions placed by the Schedule of rates on what ESH can charge and it creates a serious conflict as ESH cannot recover costs outside the listed rates.
In January 2021 Chris Cuthell Former head of procurement (resigned March 2023) declared;
'Our social value objectives mean your business should be based in the area where the contract is delivered.'
Complete hypocrisy.
Contractors travel from as far as Sheffield to undertake very minor repair work on an estate in York. (The window cleaner travels up from Derby!) Travel time cannot be charged for under the Schedule of rates but contractors have to 'recover' costs.
Invoices presented to prove works completed.
Accent Housing will not provide, even under a statutory obligation, any genuine invoices which can corroborate charges to the estate. The following is an example of what Accent Housing believes covers their statutory obligation to provide invoices, for which residents have no control but pay in full.
This is an invoice provided for a SINGLE piece of work:
There is no description of any work. It is simply a six figure code with a value attached.
This is what Housing Associations hide behind in their defence of service charges.
If you expose the real invoices with the rates applied it opens up a corrupted and unregulated system that facilitates overcharging on a huge scale across the whole UK.
The same individuals at ESH and at Accent, were responsible for the approval of the majority of invoices for repair work undertaken by ESH Construction for Accent Housing.
The director responsible for the presentation of invoices from ESH I believe was an employee shareholder in that company with around 12,000 shares. Dividends are dependent on profits
I contacted both individuals questioning what checks they implemented. Both have subsequently resigned.
The payment certificate below outlines the frailty of this system. A system which allows the same individuals to 'sign off' £40,000 of work each month none of which is checked, all of which is paid for in full by residents but those same residents are denied a single invoice for any of that work.
EXAMPLE OF ACCENT PAYMENT CERTIFICATE.
Accent Housing Group
Certificate Number: PC271 Certificate Type: PPP Certificate Date: 28/10/2019
Contractor: ESH Property Services Housing
Approved By: Contracts manager Kevin White
Accent Approved By: Stephen Davies
Total Value: £39,574.17
Those same individuals were responsible for other works such as the contract for boiler replacement across the region.
Accent Housing refuse to independently audit the ESH account. What reason is there to believe that ESH have not profited through all other works they have been involved with. Other questionable practices include undertaking fire safety work covered under a contract with Tunstalls?
Virginia Cheetham, the homeownership officer for Accent East was once asked how Accent had confidence in the repairs programme. The response was;... 'We trust our contractors.'
Invoice fraud.
There are various indicators of potential invoice fraud. Those 'managing' the repairs service on behalf of residents have a fiduciary duty to apply due care and diligence in their work.
FALSE, INFLATED OR DUPLICATE INVOICES
Weak controls over the review and payment of invoices.
No work is checked to match invoice. One individual is responsible for the majority of invoices being 'signed off'. One individual is responsible for the majority of invoices presented.
Discrepancies between contractor’s billings and supporting documents.
Work description fails to match reported problem. Work description fails to match invoice description.
No supporting document.
Simply a description of work - with no checks to verify that work. Disturbingly Accent Housing refuse to provide any supporting documents.
Vague invoices no detail in item description, etc.
Invoices presented to residents even after a section 22 request contain no details or material description of any work.
Invoiced services cannot be accounted for.
Work undertaken is fabricated and charged for.
Trading Standards have been provided with all the information in connection with the overcharging and practices of both ESH Construction and Accent Housing. That includes the FTT ruling, all invoices with associated schedule of rates, background to the repairs process going back to the initial contract in 2017 and all emails relating to the problem. They are at present looking at legislation which would allow them to instigate an investigation into the matter.
Any member of Accent or residents with any concerns over unscrupulous repairs practices can contact me in confidence at;
Alternatively contact Jane Aird, West Offices, City of York Council, the Trading Standards officer involved with the case.
Fraud