Site Report: Islington Housing PFI: United House learns from experience

Mr McCarthy is not a millionaire, even though the tidy, spacious Victorian terraced house he has lived in since 1954 in a quiet Islington square must be worth a fortune.

Behind a smart black lacquered front door, the spiral staircase leads to a recently refurbished kitchen, a replacement for the one he fitted himself 25 years ago. One floor further up, the bathroom has been redecorated and given a new floor.

In fact, McCarthy probably pays around £110 per week for this place, and none of the work going on inside it will cost him a penny. Even the bomb damage the building sustained during the Blitz has been fixed.

The house is one of nearly 4,700 tenanted dwellings (some of which are 200 years old) in the London borough of Islington that United House is refurbishing to a Decent Homes plus standard, as part of two rounds of PFI work.

The firm is also completing external work to nearly 3,000 properties, which means dealing with 1,800 leaseholders, many of them barristers in private homes worth up to £1.25m.

"It's the most challenging project of my career," says Colin Dixon, United House's managing director. "But it's also very satisfying when you see it start running. And the satisfying thing is to see happy people. It's a business, but you also get a bit of pleasure. You also get a bit of earache when they moan at you," he adds.

There's not much moaning in evidence today, as CJ takes a tour of various properties around the borough. But it hasn't been easy, as Dixon explains.

"Normally a contractor will go onto an estate, the client will give you a list to do in each unit and you go and do it. Here we have to go in and ascertain what we believe is necessary, so it's far-reaching beyond what a normal contractor will do. We have to interpret availability standards and offer it up to the special purpose vehicle (SPV), and say we believe it now reaches availability standards. They [SPV] will inspect it and give us a certificate. Until we get a certificate, we don't get paid."

Ambiguous requirements

Getting a property up to availability standards can be tough. Dixon points out that the requirements can be quite ambiguous. "We have to interpret the amount of work that is required. You get things like 'windows should be free of rot'. That's all it says. So you can end up patching or fully replacing. Our risk," he says.

Inevitably, that leads to a lot more than the standard kitchen and bathroom replacement. United House's director of PFI construction Mark Allum explains that in some cases it can mean major damp works, which may include lath and plaster on the older buildings, full-rewiring, replacement of central heating systems, replacement or repair of double-hung sash windows and so on. And all of the work needs to be sensitive to the architecture of the building.

"It's the most complex PFI around in terms of its nature. It's alright on our Camden PFI when you've got four identical blocks and every floor with identical floor plans. It's much easier to predict. Here, you don't know what you'll find," Dixon says.

There was, for example, the time that he went to look at a tenant's home that had a basement stretching under the footpath on the street. The whole thing was propped up with two Acrows. "I went down and looked at it, and thought, 'oh, we must just have put those Acrows in'. Then I found out they'd been there for 10 years. We ended up having to do a structural arch to support the footpath," he says.

This was by no means the only surprise in store. Not only are very few of the buildings scattered across the borough similar in terms of their architecture, they also tend to have undergone a certain amount of adaptation over the years. "We call them bonus rooms," says Dixon. "It's where a four-bedroom house suddenly becomes a five- or six-bedroom house because they've gone up into the roof or gone into the basement."

And then there are the extensions that some tenants have built on the back of the house to accommodate a new kitchen, without getting consent, and without waterproofing it. United House has to sort things out by rendering it and putting a new roof on it.

Chaotic situation

All of this makes housing management, handled by Hyde Housing Association, "an absolute nightmare", according to Dixon. "Islington isn't alone in this, but the knowledge these boroughs have of their stock condition, their tenant lists, their contact lists - it's chaos," he says.

No wonder everyone at United House is a bit wiser to the potential pitfalls of a refurb PFI job than they were in the early days of Round 1. "Round 1 was 10% sampling and it's fair to say that the level of the surveys didn't address the availability standards. It was all very new back in 2001 when this PFI came out, everyone was keen to win. You won't be surprised to learn that the price on Round 2 was significantly different. Say no more," says Dixon.

Meticulous planning

It's unsurprising too then, that the planning and process management involved on the project now is even more meticulous that it was when Round 1 began. "When we say street property, we might have a complete terrace, we might have an individual property, or a listed square. It's dotted here, there and everywhere. We're trying to move down the borough in a regimented way - logistics tells us that. But sometimes you have to hop through the borough because of disrepair.

"With a standard PFI you have the design phase, then the build phase, then the operate phase. Here, you're operating from day one. A flood of phone calls comes in and the next day you've got all the maintenance issues [handled by Rydon Property Maintenance]," Dixon says.

To make matters easier, United House has commissioned its own software for the project, which not only acts as a database in terms of asset management, but is also used as a conduit through which it manages the entire process, from the pre-works stage, right through to carrying out the works and co-ordinating communication with residents. The firm is selling the package, called Flag, to both Higgins and Keepmoat.

It is proud of its ability to make just-in-time deliveries to all the various jobs around the borough - very important when you consider that there is very little storage around for materials in the streets of Islington, beyond putting a container into a parking bay here and there.

"It has taken us three years to get this all in our mind, how we manage this," Dixon says.

So would he be happy to do another project like this one? Dixon smiles. "The learning curve's been fantastic. We're wasted now. Anything with refurbishment doesn't worry us. We think Lewisham Chrysalis 2 could come up for tender. We'd be very interested in that."