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Private greed, political negligence and housing policy after Grenfell

As the tragedy of the Grenfell Tower fire of 14 June 2017 has slowly revealed a shadowy background of outsourcing and deregulation, and a council turning a blind eye to health and safety concerns, many questions need answers. Stuart Hodkinson has those answers. Safe as Houses weaves together Stuart’s research over the last decade with residents’ groups in council regeneration projects across London to provide the first comprehensive account of how Grenfell happened and how it could easily have happened in multiple locations across the country. It draws on examples of unsafe housing either refurbished or built by private companies under the Private Finance Initiative (PFI) to show both the terrible human consequences of outsourcing and deregulation and how the PFI has enabled developers, banks and investors to profiteer from highly lucrative, taxpayer-funded contracts. The book also provides shocking testimonies of how councils and other public bodies have continuously sided with their private partners, doing everything in their power to ignore, deflect and even silence those who speak out. The book concludes that the only way to end the era of unsafe regeneration and housing provision is to end the disastrous regime of self-regulation. This means strengthening safety laws, creating new enforcement agencies independent of government and industry, and replacing PFI and similar models of outsourcing with a new model of public housing that treats the provision of shelter as ‘a social service’ democratically accountable to its residents.

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Grenfell and the return of ‘social murder’
Stuart Hodkinson

This chapter introduces the context, main arguments and chapter structure of the book. It begins by recounting the main events of the Grenfell Tower fire on 14 June 2017 and the ensuing political fallout, explaining that the disaster had been foretold in previous deadly fires and warnings about the impact of the deregulation of building and fire safety. It goes on to argue that this refusal to listen made Grenfell an act of what Friedrich Engels called ‘social murder’ at the hands of unregulated private greed. The chapter proceeds to outline the book’s overall argument that Grenfell has exposed a deeper neoliberal fault-line in the governance of housing safety from decades of privatisation, outsourcing and deregulation. It also sets out the three main case studies of regeneration under PFI underpinning the book’s argument, and gives a chapter-by-chapter breakdown of the book. The chapter ends by detailing the empirical evidence and research process underpinning the book.

in Safe as houses
Stuart Hodkinson

This chapter recounts the appalling experiences of residents in Islington and Camden involving the Partners for Improvement consortium. The first section focuses on Islington, where the council signed two PFI contracts, for 30 and 16 years in 2003 and 2006 respectively, in total worth £721 million, to refurbish and maintain some 6,500 homes in Georgian and Victorian ‘street properties’ purchased by the council from private owners, including many listed buildings. The chapter details the huge damage inflicted by the contractors on the housing and the devastating effect this had on residents’ lives. A second section covers the renovation and repair of five tower blocks built in the late 1960s on the Chalcots Estate in Camden. It recounts how, after procurement delays lasting several years that pushed up the cost, a much shorter 15-year contract worth £153 million was signed in 2006. Although the refurbishment was criticised by residents at the time, it was only after Grenfell that the council listened to residents and discovered that the cladding system fitted under the PFI contract was combustible, forcing the council to evacuate the estate for a few weeks in the summer of 2017. The PFI contract has since been terminated three years earlier than planned, with the council liable for a staggering £92.9 million of rehousing costs and remedial work.

in Safe as houses
Regeneration meets the Private Finance Initiative
Stuart Hodkinson

This chapter introduces the controversial background and evolution of the PFI model in public housing regeneration. A first section outlines the basic workings of PFI and how it emerged as part of the wider corporate takeover and financialisation of public services. A second section debunks official claims that the inflated cost of private finance is justified by the superior ‘value for money’ delivered through PFI’s ‘risk transfer’ and ‘payment by results’ model. A third section provides an overview of the origins and evolution of PFI during the 2000s as the ‘only game in town’ for local authorities that wanted to retain ownership of public housing and access the desperately needed finance for home and estates in need of major regeneration and refurbishment. It introduces the 20 public housing PFI regeneration schemes now operational in England, as well as the three London local authority case studies which form the evidence base of the book: Islington’s street properties, Camden’s Chalcots Estate and Lambeth’s Myatts Field North estate. A final section reveals the controversy on the ground that met the undemocratic imposition of many housing PFI schemes – sometimes in the face of resident opposition – and the problems that engulfed the procurement of these contracts.

in Safe as houses
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The Myatts Field North PFI horror show
Stuart Hodkinson

This chapter presents evidence gathered from the comprehensive regeneration of the Myatts Field North (MFN) estate in Lambeth, originally built in the mid-1970s as part of a slum clearance and area improvement plan. A first section contrasts the original promises made to residents by the council with the eventual 25-year, £272.4 million contract signed in 2012 with Regenter Myatts Field North Ltd (owned by Pinnacle and John Laing). Under the scheme, 305 homes have been demolished and rebuilt, 172 homes have been refurbished by Rydon and 503 new private flats have been built outside of the PFI contract. A second section documents the extraordinary number of defective works and services that plagued the refurbishment and new housing. A third section focuses on residents’ appalling experiences under a district heating system run by energy giant E.ON, which broke down 48 times in four years, yet some residents could not afford to use it. A fourth section then discusses the betrayal of some of the homeowners who had originally been guaranteed a new home on the estate but were forced out. A fifth section examines the safety defects discovered after the Grenfell fire.

in Safe as houses
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Who profits and how
Stuart Hodkinson

This chapter turns to the bottom line of outsourced regeneration and self-regulation – the colossal financial riches made. The chapter follows the money from government to the immediate companies and then through to their ultimate owners, often offshored in tax havens. A first section recaps on the variety of unnecessary costs imposed on the public sector through PFI procurement that would simply not arise if the schemes were financed and procured directly through the public sector. A second section focuses on the complex yet lucrative financial deals done to raise the upfront investment that provide private banks, financial market traders and PFI investors with enormous, risk-free profits. The chapter then turns to the generous profit margins commanded by the construction and maintenance firms in these PFI schemes from the lack of genuine competition in the procurement process. It goes on to detail how corporate consultants and the ‘big four’ accountancy firms also financially benefit from advising on and auditing these schemes in ways that create real conflicts of interest. A final section follows these different profitable financial flows through the MFN regeneration scheme.

in Safe as houses
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Safe and secure homes for all
Stuart Hodkinson

This chapter is the conclusion of the book. It sets out a vision of the immediate and gradual reforms needed to end the era of unsafe regeneration and housing provision in the outsourced state. It begins by setting out the scale of the housing safety and insecurity crisis that confronts us. It then details three policy lessons raised by Grenfell and the author’s own research on outsourced regeneration under PFI (but still being ignored by government). To ensure that all homes are secure and safe to live in and that residents’ voices are democratically enshrined in housing governance, it will be necessary: to restore accountability and power to residents; to re-regulate construction and housing provision in the interests of safety; and to end the privatisation disaster through a programme of gradual reforms that will gradually phase out PFI and outsourcing, push back the financialisation of housing and land, and restore a reinvented public housing model based on the Bevanite principle of treating housing as ‘a social service’ that is democratically accountable to its residents, and not a commodity.

in Safe as houses
Stuart Hodkinson

This chapter charts the course of public housing, from its emergence as part of a wider collective resistance to the social murder of unregulated capitalism, to its planned demise under neoliberal policies of privatisation, demunicipalisation, deregulation and austerity. A first section explains how public housing represented both the partial decommodification of shelter and the protection of residents’ health and safety through a wider system of building regulation and control. A second section argues that these qualities made public housing a target for privatisation and demunicipalisation policies that have recommodified and financialised housing and land for profit-seeking corporate interests. It was in this context that ‘outsourced regeneration’ featured in this book was born with the launch in 2000 of New Labour’s ‘Decent Homes’ programme to bring all social housing in England up to a minimum decent standard by 2010. The chapter ends with an explanation of how the assault on public housing has been accompanied by the rolling back of building regulations and the rolling out of self-regulation, which has weakened building safety and residents’ ability to hold their landlords to account.

in Safe as houses
Stuart Hodkinson

This chapter focuses on the more sinister side of the outsourced state under PFI that was clearly present in the Grenfell disaster – the ‘accountability vacuum’. It draws on interviews with public and private sector professionals, residents involved in PFI schemes and whistle-blowers to illuminate specific examples of this deficit. It begins by focusing on the lack of public or regulatory scrutiny of PFI contracts that rely on self-certified performance reporting, akin to paying a fox to guard the henhouse. The chapter goes on to explain how poorly written contracts that set largely meaningless ‘key performance indicators’ (KPIs) result in minimal financial penalties despite demonstrable failings. It shows how local authorities prioritise the protection of long-term partnerships with private companies over genuine resident involvement and empowerment, and how resident disempowerment is compounded by the absence of both genuinely independent and powerful regulatory bodies, as well as legal routes that residents could use to get redress. It provides a number of examples of how those who did speak out were routinely ignored and sometimes actively silenced.

in Safe as houses