UPDATE: Brent Council's housing companies report tonight - positives and risks

 UPDATE: I hoped to report on the discussion of this item at last night's meeting but the live stream was not resumed for some time after a break in the meeting. The 'silent' period was when the discussion of the items below took place so I shall have to wait for the minutes to record any key points.

 

Brent Council owns two companies that act in the housing market on the Council's behalf. Tonight they report at the Standards and Audit Committee on their activities and financial position.

Elsewhere in London such companies have had financial difficulties so the Committee will be interested in their situation.

 

i4B (Investment for Brent) report:

At our last meeting in September, we raised the issue that i4B was likely to use up its remaining funding by the end of the financial year, and both then and since, received helpful signals that further funding would be available to support good acquisition prospects. Assuming that is still the case, the company will continue to look out for such prospects

 

With a profit forecast, excluding tax, for the year, the company is in a healthy cash position, so there is no risk of insufficient liquidity to carry out its normal business activities. However, if i4B Ltd is to engage in future refurbishment projects, e.g. Granville, they will require a cash injection from the London Borough of Brent  as the business plan for 2025/26 onwards shows a risk that the company’s cash position could be overdrawn.

 

As of January 2025 i4B has housed and discharged the Council’s housing duty to 504 families and 1138 children. The majority of these families were previously housed in stage one TA [Temporary Accommodation]. The number of families housed is higher than i4B’s PRS portfolio due to a number of families moving on to other accommodation, with new families moving in.

 

The main risks the company faces are detailed below:

 Poor rent collection performance due to unaffordability of rent for tenants

 High void turnaround times, costs and rent loss lead to financial losses for i4B

 High capital programme costs, including stock condition, energy efficiency and decarbonisation expenditure, adversely affect the company business plan

 Company cash flow (capital and revenue) is insufficient to manage expenditure

 i4B does not effectively manage its contract for the remote management of Home Counties properties, leading to poor performance and risk to tenant satisfaction

 Challenges in the regulatory and external environment

PRS is Private Rented Sector

I queried the figures below as they clearly do not add up but I had not had a reply from Brent before delayed publication. Possibly 4 bed+ should be 156 but that is subject to clarification. UPDATE: Brent Council confirmed today March 26th that the correct 4 bed figure is 56 making the overall figure if 465 correct.

i4B has a profit forecast of under £1m for 2024-25 compared with £1.39m  the previous year. It has a net rental income of £10.279m.

First Wave Housing has similar risks:

The main risks the company faces are detailed below:

 Poor rent collection performance due to unaffordability of rent for tenants

 High void turnaround times, costs and rent loss lead to financial losses for FWH

 High capital programme costs, including stock condition and energy efficiency expenditure, adversely affect the company business plan.

Brent Council has agreed the acquisition of 294 units of the Fulton Road development that is currently under construction. 118 of the units will be leased to First Wave subject to financial review and approval by the First Wave Board. They will be let at London Living Rent. 

First Wave  has an operating surplus of £0.508m and a net rental income of £3.41m. 

 

I asked about the 'Settled Homes' category above and was told that:

Settled Homes are a form of long-term temporary accommodation. They are let on assured shorthold tenancies, and have a target rent of the affordable rent level (80% of market rent).

So very few of the homes above are at social rent and none at council rent.

 

 

 

 

 

Cllr Duffy encounters Kafka in Brent

Councillor John Duffy (Kilburn) recounts his experience of trying to represent workers and relatives over the Paddington Cemetery asbestos dump. Background HERE

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A strange thing happened to me last week (Tuesday 5^th December). I was made aware of a Internal Audit meeting concerning the discovery of asbestos in Paddington Cemetery. I had raised the issue sometime ago after the council stopped new burials in the cemetery and would only reopen graves to intern the  “next of kin”. The reopening takes place using a special contractor. The contractors are in breathing masks and white overalls. They remove the old soil and replace it with new uncontaminated soil for the burial.

I requested a copy of the report as the person who raised concerns in June. Originally I had asked for an independent report as I feared that the report would not be transparent and there could be seen as a cover-up, unless it was open to local residents and the relatives (bereaved) of the people who are buried in the area of concern. An independent investigation would allow the public to witness the impartiality of the report and the seriousness of the situation.

However this requested was turned down by the CEO Instead the CEO decided to have an internal audit report which would exclude the press and the public .The reasons given for the secrecy of the report was because there was information relating to financial affairs of a particular person or companies.” 

The Head of Legal informed me via officers that I would not be allowed to have a copy of the report. I challenged this and finally received an email from legal services stating  “All members are entitled to ‘inspect’ reports with certain categories of exempt information, rather than receive a copy. If you would like to come to the Civic Centre prior the meeting to inspect the report physically in this instance.”  Why do senior officer think its necessary to act in this bizarre way to stop me getting information. This was done even though in the terms of reference for the report, it states the reason for the internal audit report is “ following concerns raised by Cllr John Duffy in an email dated 10^th November” so the decision to exclude me from having a copy is strange to say the least.

Anyway I went to the Civic centre at 4pm,2hrs before the meeting was due to take place to read the report .I was met by 2 (male ) members of legal services with the report. I was informed.  I was allowed to read the report only under their supervision, but could not remove it or photograph it. I am bound by the secrecy imposed on me by the Head of legal , which means if I am approached by any member of the public , who has a relative buried on the Hill ,I have to tell them they are not allowed to know what happen or how the asbestos got there….. Now that is what you call transparency Brent Style.

At the meeting I ask the Chair of the Audit committee to overturn the Head of Legal decision  not to allow me a copy of the report.  He did this and his decision was supported by the other members of the  committee which included  Councillors Choudry, Nerva, Davidson and Perrin. However, even though I was then given a copy , I am still not allow to share the information contained within it.

I informed the chair of the meeting I will not make public anything I have read in the report after he released the report to me. I intent to honour that , with one exception .Officers were wrong  and misleading to say the reasons given for the secrecy of the report was because there was information relating to financial affairs of a particular person or companies.” There is no such information in the report and all names have redacted and the names of the companies involved have been disguised, therefore there is no information, which should be kept from the public.

Whereas I am committed not to discuss the contents of the report I will reiterate things I raised in my previous emails. The act of placing the contaminated waste in Paddington Cemetery was deliberate (any ordinary member  of the public could spot the difference between  a delivery of soil and a delivery of builders rubble) it was not an accident. The cost to the council will be well over a million pounds in lost revenue and I have further concerns about the way the public have been treated since the asbestos was discovered in May this year.

The whole thing is  a farce and is right out of a  Kafka  novel .Why senior officers think that it  is necessary  to stop the local residents and the relatives of those buried knowing the truth  so they can make plans for their  future family  burial arrangements is disgraceful..

As I said before this an attempt by senior officers to rely on the Cabinet, who will nod it through without question and ensure that the facts are kept from the public .

I will continue to seek an independent investigation for the sake of the relatives.

Brent Council and Cara Davani – something has happened!

Guest post from Philip Grant

Wembley Matters readers still following this long-running saga might be interested to know what has happened since the last update I gave at the end of June. LINK

The auditor, Andrew Sayers of KPMG, finally sent his ‘provisional view and material documents’ letters to the five Brent residents, who had objected to the Council’s June 2015 leaving payment of £157,610 to Cara Davani, on 3 August 2017. The final paragraph of his letter reminded me that the “disclosure of information” provisions (Schedule 11) of the relevant legislation still apply to his enquiries. I am therefore restricted as to what I can tell you, as ‘failure to comply with Schedule 11 is capable of amounting to a criminal offence and liable to a fine upon summary conviction.’

When we read his ‘provisional view’, the same word sprang to the minds of three objectors. It was not an expletive, but I can give you a clue without disclosing any of the contents of the letter. The OED definition of the word is: ‘a liquid containing quicklime or powdered chalk, used for painting walls or ceilings etc.’

Still, we were not disheartened, as the auditor’s letter stressed that this was only his provisional view. He had not reached any final view, or decided our objections, and would not do so until he had considered any additional comments or evidence that the objectors or the Council might wish to provide.

However, when I looked at the “material documents” which the auditor had sent with his letter, I found that these did not include any of the documents we had been expecting to receive, since they were handed over to KPMG by the Council last December. There was only one “material document” which did relate to the payment to Ms Davani, and as that document is already “in the public domain” I am allowed to tell you about it, or you can read it for yourself. LINK

Why are the 30 June 2016 minutes of Brent’s Audit Committee a “material document” in considering objections against the £157,610 payment to Cara Davani? Because at item 7 (Draft Statement of Accounts 2015/16) they contain a brief explanation of the reason the payment was made, and of the legal advice on which it was based.

But if a Council Officer had explained everything about the payment in June 2016 (in the first public admission of such a payment, a year after it had been paid), why had five local electors objected in August 2016 to that payment being included in the accounts? Surely the primary documents from May and June 2015 should also be treated as “material documents”, and shown to the objectors so that they could provide comments, and any counter evidence, in support of their objections!

I was not able to persuade the auditor with this argument, when I put it to him on 4 August. Nor did his position on this change when I drew his attention to the relevant guidance issued by the NAO, “Auditor Guidance Note 4” (AGN 04), which he is meant to follow, later in the month. Para. 36 of AGN 04 says:

‘Sharing material information and inviting representations on it is required in public law as the auditor is exercising quasi-judicial powers.’

I was arguing that the primary documents (which the auditor holds) about the £157,610 payment must be “material documents”, so should be shared with the objectors before we made our comments. The auditor said that he would look at our comments (which he had first asked for within three weeks, but then agreed an extra week, with a 31 August “deadline”), and if he then considered those documents to be “material”, he would share them with us and give us the opportunity to comment on them. I summed this up to him as:

‘What you appear to be saying is: 'I won't share material information with you now, but after you have made any representations I might share some of the material information with you (and if I do, I will give you the chance to make some further representations).'

As the “deadline” was fast approaching, the objectors had to submit the best ‘additional comments and evidence’ that we could in the circumstances. One of the points I was able to make was that the summary of the May 2015 legal advice, as given to the Audit Committee, showed that the point the QC had been asked to look at was “unfair dismissal”, if Brent had sacked Cara Davani. At a meeting with the objectors last December, the Chief Executive referred to a document Ms Davani had given to the Council at the time. This strongly suggested that the point the QC should have been asked to look at was “constructive dismissal”, which may well have produced different advice, and not led to any payment to her.

We have not been allowed to see Cara Davani’s “statement of loss”, and even if we had I would not be allowed to tell you what it said, but I did refer to it in a “guest blog” in January. LINK :-

‘We asked for more information about the circumstances which gave rise to Cara Davani leaving Brent. When Ms Downs provided a brief outline of the grounds on which the former HR Director claimed she was entitled to compensation from the Council, the objectors expressed their incredulity. I am sorry that details have to remain confidential for now, but I can say that we asked Ms Downs whether she was joking, and she said that she was not!’

I can assure you that the objectors have done their best to provide the auditor with information about a pattern of abuses of power at the top of Brent Council from 2012 onwards, which came to a head with the, we allege unlawful, payment of £157,610 to Cara Davani in 2015. I have also provided evidence to show why that payment was really made (and how the Officer who provided the “official” explanation to Audit Committee was, like the Council itself, the victim of a deception).

I have been greatly helped in piecing together my researches over Brent Council and Cara Davani by comments, many of them anonymous, which Wembley Matters readers have made in response to blogs by Martin and myself since 2014. Thank you, everyone, for the parts you have played in allowing the objectors to lay the evidence before the auditor. There is a strong case for the auditor to make a Public Interest Report, to bring this matter into the open, so that key figures at Brent Council, past and present, can be asked to explain their actions, and be held to account. We shall have to wait and see whether Mr Sayers will now make that report.

Philip Grant.