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Bills reveal how builders’ charges outstrip inflation• WHEN the story about building contractors fixing prices first surfaced a year or so ago there were calls for an investigation but the ruling Lib Dems in Islington turned this down since the evidence only pointed to subsidiaries working in the north of England (Call for council contracts inquiry. September 25).
It is now clear there has been sustained malpractice throughout the UK’s building industry. Basically, contractors have been operating as a ‘ring’ to keep prices high.
I wonder why they’ve bothered. There certainly hasn’t been any need to drive up prices in Islington where the council and now Homes for Islington (HfI) use their own schedule of rates.
I’ve just compared my major works costs for bills covering 2000 and the most recent in 2008-9. This suggests that the cost of preliminaries or site set-up has increased by about 380 per cent.
The cost of scaffolding has also increased by 380 per cent, while painting and decorating come in at a very reasonable increase of 280 per cent.
The apparent rate of inflation has been 18 per cent every year for preliminaries and scaffolding while painting and decorating seem to have had a modest annual rise of 12.5 per cent.
To put this in perspective, to keep pace with these rates of inflation someone on an average income of £20,000 in the year 2000 would now need to earn £77,000.
It is certainly true that inflation in the construction industry has outstripped the retail price index (RPI). Where the RPI has been hovering along at about three per cent, inflation in the construction industry seems to have averaged about eight per cent a year.
The message to builders is “come down to sunny Islington” where prices outperform all other indexes by as much as 10 per cent every year.
But, of course, I’m forgetting the “special factors”. It’s amazing that we in Islington seem to have so many “special factors”.
Richard Rosser
Highbury New Park, N5
• MICHAEL Read is quite right to say that the HfI contracts have got to come under renewed scrutiny.
However, similar calls from Labour councillors Catherine West and James Murray can be taken with a pinch of salt as there is an election looming. After all, the report produced in 2008 by a council committee chaired by Councillor Paul Convery (Labour) on the HfI capital programme is now waste paper.
The committee even went along with the bland suggestion by a prominent HfI director that framework contracts are more expensive than private ones because health and safety requirements are higher. My repeated and polite inquiries to Cllr Convery about why this should be so did not even get the courtesy of an acknowledgement, let alone a reply.
The HfI spokesman said it had carried out its own investigation last year, and that the use of a framework agreement significantly reduces any opportunity for contractors to engage in price fixing. Whether this is the case or not, there remains plenty of scope to inflate prices.
Under the framework contract for Andover estate, the charges for preliminaries in phase one were a staggering 25 per cent of the total cost of the work, and, if the charge for unnecessary scaffolding had been removed, the preliminaries would have been over a third of the total cost of the work. This is blatant overcharging.
Surely, it should not be left to leaseholders to be forced to seek redress at their own expense, when the public purse is being exploited to an even greater extent.
The council and its HfI client can’t or won’t sort it, so they have a duty to institute a truly independent inquiry and make the results public, if they dare, before the next election.
John Whicher
Leaseholder, Andover estate, N7
• SEVERAL building firms used by the council and HfI, such as Balfour Beatty and Kier Group, are among those fined a total of £129.5 million last week by the Office of Fair Trading. Kier faced the biggest individual fine, of nearly £18million.
The firms were found guilty of illegal bid-rigging on some of their contracts with public bodies and others. In these difficult times, council tax-payers need to know they are not paying more than they should to these and other firms.
Clearly, using big-name companies is no guarantee of value for money, as council leaseholders facing big bills for unsatisfactory repairs have been saying for years.
Now that these firms have been found guilty of mistreating some of their customers, what steps has the council taken to ensure it too has not been the victim of these practices?
And should it not look harder at giving local businesses the chance to compete for the work?
Antonia Cox
Conservative prospective parliamentary candidate, Islington South and Finsbury |
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