This week we take a look at the CEO who turned a profit into a surplus at Lewisham Homes. THEBIGRETORT...
The Lewisham Homes Audit and Risk Committee minutes dated 20 June 2017 record that its board members were seemingly taxed... on the subject of profit.
Auditors KPMG informed that it was common 'within the sector' to use surplus instead. However, ignoring the startling fact that board members, after hundreds of millions of pounds of public and leaseholder spend, and after eleven years of a spending - during which it did not know the correct Shamspeak - its members didn't realise that the term allows a not-for-profit organisation such as Lewisham Homes to, well... turn a profit into a surplus.
Accounts filed at Companies House record that this profit is due... 'primarily to a reduction in the valuation of projects undertaken' – and last year amounted to a cool £2.3 million.
That new roof that you leaseholders were informed needed doing; and didn't. That fire door you didn't really need. That emergency lighting; not needed. The fire alarms, are not needed. And that scaffolding they would like you to stay off as they ramp up the price - via their preferred bidder... not needed. But it's all for the public good.
Dodgy sealed bids aside... Don't leaseholders find it strange how the PREFERRED BIDDER always manages to undercut the competitions' bids – only to then ramp up the price once the tender is awarded; and when over-priced scaffolding surrounds the building?
Did you know that a Lewisham Homes leaseholder is known as a Lewisham Homes “fleeced” holder?
And, athough the following board minutes do not record it, they are most informative on how that fleecing may be taking place.
Increase of turnover from £34 million to £40 million.
Increase of surplus from £0.97 million to £2.30 million reserve balance.
Increase from £8.3 million to £10.6 million.
Increase of assets from £14 million to £21 million.
*Due primarily to a reduction in the valuation of projects undertaken.
The Risk Committee minutes are not clear on why a little asterisk has been placed just before 'due' and with no corresponding asterisk.
However the accounts record an increased “surplus” of £2.3m – so there is overvaluing going on at Lewisham Homes to be sure, and so this seems a good spot to place it.
In a further example, 9 JULY 2014 Board Papers/13 under its Financial monitoring report, records:
“Lewisham Homes’ Major Works partnering contractors MITIE and Breyer spent £31.68m in 2013/14. They made decent a total of 1505 properties. This works out at a cost of £21,048 per unit. With an allowance for anticipated Leaseholder recovery included the cost per unit is £19,162.”
LEWISHAM LEASEHOLDERS have, according to the above, been SUBSIDISING the costs of the decent homes programme.. to the tune of £1886 each unit!!!
But first... sack the auditors... £31.68 million divided by 1505 units = “£21,049 per unit (and not £21,048). So where is that extra £1 per unit and which totals £1505? A leaseholder could pay for a new door with that.
In the twisted shamspeak spoken by Lewisham Homes, the “anticipated leaseholder recovery” subsidised each council “unit” by £1886. (Or £1887 if its Board ever finds the missing £1505!) Adding the Lewisham Homes mismanagement fee, at 10% to leaseholders - 5% for council tenanted properties? - then beleaguered Lewisham leaseholders are unwittingly contributing 10% for council tenant improvements - throughout the borough.
Curiously, in that same report, it was determined that leaseholders, amongst a veritable raft of “improvements”, also needed fire doors replacing. Flat entrance doors were not compliant with “current” fire regulations, it was claimed, and a 'gradual repayment scheme would be offered' to leaseholders for what were expensive conversions.
However, ignoring the fact that the repayment scheme was not offered to leaseholders, the compliance itself is simply a requirement – in other words not proscribed by law. There is no regulation actually stipulating that a door of a dwelling, built before 1991, must be changed to suit present day requirements. Many are already fire-rated, for twenty minutes.
But why then should leaseholders choose to gradually repay for something that may not actually be needed in the first place?
Or, if needed, and there is some debate surrounding this, and they do need changing, why have leaseholders been hoodwinked into believing that the costs should be met by them; and not Lewisham Homes?
THE BOARD MINUTES
“Although the Housing Act and Fire regulations are not clear on this matter regarding responsibilities. The CEO advised that where leaseholders did not comply, they may be prosecuted.”
In other words the CEO of Lewisham Homes, Andrew Potter, although he knows 'regulations are not clear on this matter', is hoodwinking leaseholders into believing it is clear to him. If not simply wishful thinking.
He is aided by former fire officers. Known as Kilden and Brown, the pair formerly worked for the London Fire Brigade for thirty years. This dynamic duo actually describe themselves as Batman and Robin. - one boasting in Inside Housing how he goes 'above and beyond' (and with leaseholder bank balances too).
LEWISHAM HOMES CONVICTED FOR FIRE DEATHS
In 2016, due to a tragic fire at Marine Tower, which claimed the lives of two women, London Fire Brigade prosecuted Lewisham Homes for its failings. The trial took an... interminably longgggg time to reach Woolwich Crown Court, and led to a quid-quo-pro arrangement where fire brigade officers, prior to the trial, were invited to add interest to their already fat pensions from the fire brigade by loading the cost of replacement of doors and other fire paraphernalia on the backs of Lewisham leaseholders.
This conflict of interest actually sees the London Fire Brigade undertake to prosecute - or at least threaten to prosecute - any recalcitrant leaseholder who refuses to replace a door, and has become widespread with ALMOs in the London boroughs. Seemingly in the pursuit of fire safety.
However, following the Grenfell Tower tragedy, the fire safety advisers have been making hay through the dense smoke.
Whilst further down the fire ladder it was noted that people leaving the organisation did so due to poor pay; and which the Lewisham Homes Board hoped to compensate via flexible working. So it is unlikely this is the area where PROFITS have been siphoned.
FOLLOW THE MONEY£££....
In the last tax year 2016/17, whilst CEO Andrew “THE PROFIT” Potter headed his executive management team, the aggregated emoluments, gross taxable pay plus benefits in kind, recorded in company accounts was £710k - for less than a handful of top earners. But since the CEO can appoint directors and dismiss them, and with an unsavvy board, it is hardly surprising. Save to say that the Board members of Lewisham Homes consists primarily of patsies who receive only minimal expenses: so they should not be blamed.
Andrew Potter, CEO, the HIGHEST PAID EMPLOYEE of Lewisham Homes commenced in 2007 with a salary at £118k. Following austerity measures, ostensibly aimed at those on struggle street, by the 2016/17 tax year his salary had risen to £161k.
Having lit the blue touch paper, Potter has resigned in a bit of flurry. The ad he answered for his new job was placed just months ago. But as he heads for that very expensive fire door, he is looking at a weighty pay day. And judging by the convenient tax date that this fat cat chooses for his departure, the next return will no doubt record another great pay day.
In April he is headed towards greener pastures at Hastoe Housing Association where he is taking over from Sue Chalkley and, where one suspects, “asset rich” leaseholders may soon be subsidising his next pay increase. Just bolt the doors...
If not, you should beware the incomer... hunting is banned and there's a fox headed their way. So time to get the socks out.
Following the trail...
Following the trail...
Back in concrete city, Lewisham leaseholders will have to pick through the burning embers of a very questionable policy. A policy where service charges have seriously bloated the cash tills at Lewisham Homes.
But, as Ralph Waldo Emerson said: Do not go where the path may lead, go instead where there is no path and leave a trail.
COMING SOON IN THE BIG RETORT... we lift the lid on price fixing.