DRAFT PRESS RELEASE

London, UK – [17] April, 2003 – A group of Leaseholders discover their freeholder, London Borough of Camden, has been sending them inaccurate and irregular bills for service charges for many years.

The District Auditor commissioned Deloitte & Touche to examine the process by which Camden's Home Ownership Services (HOSS) bills Camden leaseholders for services and capital works to their homes. This followed a request in [September 2002] from two concerned leaseholders that bills received had no basis.

The audit report issued in [January 2003] has exposed

·         Unethical and irregular billing and accounting practices;

·         Invoices based on estimates that are never reconciled;

·         Invoices for works not actually carried out or for works of unacceptable quality; and

·         Invoices for various services, such as caretaking, electricity and heating, which Camden cannot identify.

Deloitte & Touche says “actual accounts are often significantly different from the original tendered cost but there is no evidence of reconciliation of tender costs to actual costs” The report also highlights the issue around invoices issued by Camden where there is no supporting documentation.

Some of Deloitte & Touche's key findings are:

·         No accurate listing of Camden's property data base and of services (such as lifts, boilers and meters) to individual leaseholder properties

·         No accurate and/or complete coding of true costs at source

·         No procedure to match actual caretaking hours to invoices sent out for this service

·         No audit trail back to primary records and a failure to keep all original documentation to confirm invoices.

Anna Brownlow, Chairwoman of ACCL said:

“Camden Council leaseholders' complaints about unreasonable, erroneous and unjust invoices have been ignored by Camden for years however, this Value for Money Study reinforces our members views that any value is often limited by poor work and a lack of proper supervision.”

The report also highlights that Camden still consider a significant number of past bills still outstanding. Ms Brownlow added

“Camden know these invoices have no basis and are unenforceable, however they continue to chase payment or refuse to cancel them. This causes considerable stress and worry to my members, many of whom do not know their rights and are not in a position to effectively challenge Camden's behaviour”.

The full extent of the inaccuracy of leaseholder bills is not known and the issue of what money is actually collectable is avoided by Camden saying they are allowed to raise the invoices despite secretly knowing they cannot legally enforce them. This appears to be accepted by Deloitte & Touche, who are also Camden's Auditors, and indeed, despite highlighting these considerable failures, do not appear to be overly concerned having issued an unqualified audit opinion on Camden's accounts for years. This obviously explains the complacency at the meeting of the Council Executive on 12th March when Deloitte & Touche presented their report. It's nothing new after all; a similar report was issued four years ago in 1999.

Leaseholders are left wondering what proper accounting records really are and when all the issues will be resolved. At meetings of ACCL members the general expectation is clear, to be invoiced for reasonable quality works actually carried out at a reasonable price that is understood and can be supported. This still appears to be a long way off. It is not only leaseholders who should worry, Council Tenants may shortly be paying Services Charges as well.

All these inefficiencies however must be paid for and the Council's failure to manage work to their property portfolio efficiently and effectively as well as properly calculate and recover service charges correctly means that Camden's costs and hence Council Tax levels are inflated unnecessarily. In effect, all of Camden's residents are paying for Camden's poor management of their housing, not only the leaseholders.

ACCL put their views to the Council in a deputation at the full meeting on Monday 14th April seeking the Councillors support in ensuring the Report is addressed as a matter of urgency. ACCL also asked “will the Council devise a policy as to what is a reasonable period of time for a bill to be finalised or actualised?” as well as “will a policy be put in place which specifies how to treat old bills?”.

Councillors noted that the problems in Home Ownership were a known situation and that recovery from leaseholders had to improve, the target is apparently 5%. Councillor Hedges in his response noted that Camden had a good track record compared to other London Boroughs but that HOSS was working to improve matters. He has promised a written response to the Council. It is unclear if the 5% improvement is simply putting the prices up or that appropriate billing procedures will be introduced and that recoveries will improve naturally in due course.

ACCL members are eagerly awaiting both the Action Plan and Councillor Hedges written response. They hope both will address the many outstanding issues. What is already clear is that this crisis within Camden must be dealt with urgently.

Ends

About the Association of Camden Council Leaseholders, ACCL

The Association of Camden Council Leaseholders was set up in [1996] to promote the interests of the residential leaseholders of the London Borough of Camden. Membership is open to everyone who exercised their right to buy, or any member of that person's household or to anyone who has bought a Leasehold property which was originally purchased under the Right to Buy legislation. With [700] members ACCL represents [nearly 10%] of all Camden leaseholders. As a pressure group ACCL is committed to getting a better deal from their landlord over maintenance, repairs and capital works as well as all round value-for-money service.

New members can apply on line at members@camdenleaseholders.co.uk or to The Membership Secretary, ACCL, c/o 11-17 The Marr, Camden Street, London NW1 0HE.

Contact:

Anna Brownlow, Chairwoman ACCL

Telephone: 07971 229606

E Mail: anna_accl@hotmail.com

The Deloitte & Touche report follows up its April 1999 ‘Value for Money Study on Lessee Charges' in Camden which identified very poor standards of accounting for leaseholder related costs. A follow-up of its recommendations is included in the new report.

Copies of the deputation given at the meeting on 14th April 2003 are available from ACCL.