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Boroughs unite to get 'upper hand' over landlords

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Thirteen London boroughs have come together to take a more collaborative approach to securing accommodations for the homeless, with the aim of pooling resources and saving cash.

The boroughs have set up a not-for-profit company, Capital Letters, which is being supported through £38m of grant funding from the Ministry of Housing, Communities and Local Government, with the aim of providing more housing options by lessening competition between councils.

The collaboration, was co-ordinated by the London Housing Directors’ Group and London Councils, and is chaired by Mark Baigent, interim director of housing and regeneration at Tower Hamlets, who explained that the need for the company was borne out of frustration at the time and resources wasted when boroughs compete against each other.

“Each borough has their own individual procurement team, they’re all ringing the same landlords and competing,” he said. “The only winner in that is the private landlord, the families and the boroughs aren’t winning out of that process – they pay more money than they should be paying and they’re wasting their time. It’s about giving us the upper hand over landlords in the negotiating process. “

Mr Baigent illustrates the need for collaboration using the example of the incentive payment made to the landlord – “a golden handshake” – when a tenant takes on a new lease. “A particular borough might say ‘we’re only prepared to pay £2,000 as an incentive payment’ and another borough might come into that area and say ‘we’ll pay £3,000.’ That’s the kind of thing that happens, it’s well documented,” he said.

“So Capital Letters is committed to not outbidding other boroughs in terms of securing properties. By collaborating within the company we should have a lot more influence over the marketplace, because we will be procuring the majority of temporary accommodation in London.”

Mr Baigent explained that the idea for Capital Letters had been floated several times in the past five years, “but it was always slightly too hard to make it happen”.

“I think boroughs should naturally want to collaborate, which is easy to say but not do – it’s about behavioural change. That’s what it’s all been about in the last two years, nudging people in the right direction,” he said.

The company is now hiring for a raft of new positions, and last week held a meeting of all the member boroughs to appoint its board of directors.

The scheme aims to start procuring properties by June 2019 and over the next two years, “gateways” will open up when other London boroughs will be invited to join.

“A longer term ambition would be that once this concept is proven, there is no reason why a bespoke procurement organisation like Capital Letters couldn’t procure properties for other councils outside of London - why not apply the model elsewhere and use the same expertise?” said Mr Baigent, emphasizing that this would not be a vehicle for “scaling up” the procurement of properties outside of London for Londoners.

“I’d also be really interested when we’ve gone through the set up period to go on a regional tour of Manchester, Liverpool and other places where I know there are homelessness and temporary accommodation issues and find out whether the things we’re doing might translate into their context,” he said.

Founding members of Capital Letters

Tower Hamlets LBC    Haringey LBC   Waltham Forest LBC   Brent LBC   Ealing LBC   Bexley LBC   Lewisham LBC    Croydon LBC

Redbridge LBC   Southwark LBC    Barking & Dagenham LBC    Westminster City Council    Hammersmith & Fulham LBC 

 

 

 

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