A schedule of rates is a priced list of repairs, installations, and other minor works. Typically, the schedule will be used in a contract to standardise pricing which benefits both the supplier and the buyer:
The NHF Schedule of Rates is the most popular third-party schedule, widely used across the UK for maintenance & repair contracts. Building companies who wish to work for housing associations will often find themselves using the schedule
At its most basic level, a rate will display a code to identify the rate, a letter indicating the urgency of the job, a brief description of the works involved, a unit of measure for determining the required quantity of the rate (e.g. per square metre) and the rate price.
One of the most common points of friction between buyers and suppliers when using rates is regarding what exactly is included. Below is a list of what each rate includes – it is not exhaustive
Developed specifically for the social housing sector by the M3 group and Rand Associates working with the National Housing Federation (NHF)
The M3NHF Schedule of Rates is involved in a large part of the sector’s finances, an estimated £1.3 billion a year is managed through the housing maintenance system incorporating the Schedule of Rates.
Rand Associates release new information on updated versions of the SOR, present seminars on the use and misuse of SOR and organise training programmes on the application of SOR in the workplace. They are the publishers of the schedule and accepted authority on its practices.
These points are important as it puts the responsibility for determining which specific code is applied to a job firmly on the shoulders of ESH as the clients representative where, in fact, it should be Accent Housing that take responsibility for control of costs.
It also prevents repeated billing for the failing of first fix solutions
Responsive repairs
It has long been recognised that there are inherent problems associated with any SOR as it relies very heavily on the integrity of whoever is responsible for its implementation and the need for a robust audit and system of checks in place.
Lack of dissemination of information to the “man on the ground” in respect of measurement rules, content of schedule of rates items and inclusive nature of the rates themselves.
Operatives just provided with a generic description of repair and not given access to any schedule of rates information.
Operatives and sub-Service Providers moving from employer to employer taking bad habits with them.
Sub-Service Providers seeking to recover under-recovery of costs, by job building either with by claiming additional quantities, or items already deemed to be included. ‘Cherry picking’
Client inspection, and job done
Quantities claimed not in accordance with Measurement rules
Making good
Ease and adjusting doors claimed on new doors,
repairs to doors, and ironmongery
Claiming for additional costs of materials
Clear blocked downpipes when gutter clearance also claimed
All these practises repeatedly occur at Lambert Court. Client inspection has never been undertaken to my knowledge which simply means not one piece of work undertaken at Lambert Court can be validated.
Within the SOR there are composite codes which group a selection of repairs under one category and could be classed as composite codes. For example, to repair a roof leak it would include all the various parts of that repair work under one schedule. To select individual components and charge each SOR separately hugely inflates costs. This is demonstrated with reference to the repair of the roof leak to 5 Lambert Court.
I have explained previously the reasons Lambert Court requested under section 22 (LTA) all the corroborating invoices for that financial year.
It was only upon receiving the invoicing that any clarification of how costs had been applied to Lambert Court regarding repairs and maintenance were partly revealed.
I would add that in attempting to make sense of the material presented (in this instance for repair and maintenance) there were over 60 redacted pages within the repairs documentation, numerous repeated invoices falling under different category folders and numerous invoices buried within lists of all Accents costs across various estates. Some charges presented by ESH fail to appear in the home communal repairs folder but are found elsewhere, for instance under health and safety, fire safety, sundries.
The invoices revealed in the sect 22 request do not fully describe the true nature of the costs. Each invoice can be an accumulated total of various works completed under the guise of one job which results in the invoices presented appearing as one single entity.Without the SOR applied to individual components of that invoice the genuine cost cannot be verified.
I requested the SOR that ESH use in calculating charges but have been limited to only those that applied to the roofing works at 5 Lambert Court. I do have a copy of the complete SOR (version 6) from 2013 and so could work out equivalent costs and codes from that set. I believe Accent use a more recent version (6.1) but to date they have refused to present that SOR.
These requests for a copy of the SOR were made to various staff memebrs at Accent. A copy was never presented. All those employees have since resigned.
It was still possible to work out the percentage difference between the limited prices/codes offered by Accent and the corresponding codes/prices in the 2013 version 6 set to compare price differentials.
After working out the percentage difference between prices for the same codes in version 6 SOR from 2008 and the figures presented by ESH in their revised SOR and employed in 2019 there appears to be an average 13% reduction in the present SOR costs applied by ESH in 2019 compared to version 6 M3NHF SOR issued in 2008.
Without the relevant complete set of rates, it is difficult to work out exactly why.
One explanation could be that in the tender stage ESH offered a discount on the pricing contained within the SOR. This is common practise but has associated problems in that the longevity of contracts has meant that heavily discounted contracts place contractors at the risk of market forces.
Also, as a by-product it encourages contractors to place their best staff on contracts with more risk resulting in a poorer service to the areas served by this discounted rate. (Ten years ago, this would have been referred to as ‘suicide bidding’ and resulted in the collapse of some of the largest construction firms). It simply encourages recovery of costs through various means, for instance manipulation of SOR.
If this was indeed the case and reduced rates were applied why were the subsidies not reflected in the charges to Lambert Court?
It was later proven during the FTT hearing that ESH had, indeed, offered a discount on the rates and had failed to apply it in over 70% of cases