A lesson in ‘how not to do things!’ is York Buildings’ overspend damaging to the council’s reputation?

Redeveloping York Buildings in Hastings town centre has been an object lesson in how ‘not to do things,’ and risks damaging the council’s reputation according to one councillor.

Earlier in the month members of the Hasting Borough Council’s (HBC) ruling cabinet approved an additional £166,000 on the renovation of York Buildings to cover unforeseen costs. It was the second time councillors have upped the budget for the project having increased it from £757,000 to £846,000 in September 2019. The latest approval brings the total spend on the project to £1,011,000 – an increase of one third (33 per cent).

“This is unfortunate from a reputational point of view because it is playing to a stereotype; other people’s money, wasting money, over paying for stuff and all the smoke and mirrors that surround councils and building contracts so it is a sensitive area,” Councillor John Rankin told the meeting.

Redeveloping the upper floors of the building to create six one bedroomed flats was being discussed again when HBC met in full session on Monday. Councillors heard that it will likely NOT be possible to rent the flats out at local authority rates because the cost of repaying the additional loans that have been required mean higher levels of rents will have to be charged meaning the six flats will no longer be able to be classified as ‘affordable housing’.

Additional items include provision of gas, water and electricity at £6,180 – items a report to cabinet said were, “omitted from contract costs”.

At Monday’s meeting Councillor Rankin, declared an interest pointing out that his business was in property and said he was also building flats in the town centre, he told the meeting: “Lets use this as a learning experience on how not to do things. It has not been project managed, you have given it to the architects… that’s the mistake you have made because architects are very fine people but they are not not project managers… you have no clerk of works, no project manager you are offloading it to an architectural practise and the result is – and it’s a well know fact in the property industry – if you do that you’ll have escalating costs.

“There are always contingencies in building works but having said that we have already had a big price change in this project… there is clearly something wrong and I would say from experience that it’s because you are not project managing this project properly.”

For councillor Rob Lee it was about mistakes being repeated “Part of the issue is about how HBC approaches projects because we’ve seen this many times where a project comes, it’s costed, it’s planned and yet it always seems to come back to cabinet with increased costs time and time again and its entirely unacceptable.”

Councillor Peter Chowney said the fact the building was listed had been an issue. Bug he told councillors the redevelopment of York Buildings was “zero cost” to the council because the rents being paid would cover the cost of the borrowing. Money has been borrowed from the Public Works Loan Board and will be repaid over a 40 year term.

Tell us what you think by using the comment section below.

4 thoughts on “A lesson in ‘how not to do things!’ is York Buildings’ overspend damaging to the council’s reputation?

  1. I thought Cllr Davies’ input to the meeting was passionate but very aggressive, he did nothing to explain why the project was over budget. Nor did he show any respect for his colleagues, some of whom appeared to appreciate how PR disasters like this damage reputations.

    This money may be borrowed at low rates of interest but they originate from the PWLB, ‘P for PUBLIC’ … If HBC is going to find borrowing at these rates in the future less likely how will they fund the next PR disaster?

    Of course, the PWLB is payable over 40 years, so Cllr Davies can wash his hands of this, particularly if this administration fails to secure a lead in the local election. The cumulative £65m debt will be passed onto a new administration, who will as a result have fewer funds available to commit to improving the town. I guess we will see the resulting opposition jumping up and down because there is no money!!!

  2. Of course costs should not increase by this much it is unacceptable and can only be due to poor management and forecasting and poor contractor management. I work for BHCC in senior management for Housing and none of our project exceed the Agreed Maximum Price they often come in less. There needs to be a detailed review as to how this has been allowed to happen particularly if HRA money, low interest loans argument does not wash.

  3. Anyone with a spare quarter of an hour should watch the video of that part of the meeting. (Full Council: 21 December, from 30:05 to 44:24.)

    Cllr Rankin used his property expertise to point out that making six flats above Millets hadn’t been project managed
    ‘The thing that jumped out to me – and I’m currently building a very similar property in the town, so I speak with some experience here – is that it’s not been project managed. That is totally clear to me. You have not got a project manager here. What you’ve done is you’ve given it to the architect to bring home the bacon, and that’s the mistake you’ve made, because architects are very fine people but they’re not project managers
    You’ve got no clerk of works, you’ve got no project manager. You’re basically just offloading it on to an architectural practice, and the results – and it’s a well trodden path in the property industry – if you do that you’ll come back with escalating costs.’

    Cllr Davies then loudly thanked the Opposition for their support for affordable housing at York Buildings, though the affordable rent is now in some doubt.

    ‘It’s also gratifying to hear these voices all chiming and agreeing with what this Council has always been intent on doing which is project manage work.’

    The history of non project management, just outlined, was entirely ignored. Though he referred to private-sector debacles (such as Fern Road apparently), his finale was again misleading.

    ‘And yes, it’s great to hear all these voices coming together and agreeing that they’ve got a Council that is reflective and is project managed, and going to be project managed into the future.’

    In assuming what he was trying to show, Cllr Davies tripped up.

    Winding up the discussion, Cllr Chowney, as Financial Management and Estates Portfolio Holder, outlined the difficult history of the project, and was persuasive on why six new flats in the town centre was a good regenerative achievement, at as near to affordable (LHA) rents as possible. Much less successfully he asserted that project management wouldn’t have made a difference (and ignored the contrary view). He also said that the building’s mathematical tiles were the only reason for the Grade 2 Listing. The 1976 citation has it otherwise.

  4. So here we have a councillor stating how this project is “damaging the Council’s reputation.”
    I think we can soundly say HBC’s reputation was damaged beyond repair years ago. While there is not enough space to list the examples.
    Regarding buildings and reputations – The Bunker in the Country Park. The Azur ( aka The Cow Shed ) on seafront. Archery Road new development. Undercliff the building never finished. The building site where the downtown toilets once stood. And of course the up and coming fateful decision with the Bathing Pool site. Just a few to cite regarding “reputations.”
    Well noted to by Mr Wilkins on the £65m PWLB loans spent on retail units around the borough. And like the Millets building those purchases were organised by Cllr Choweny et al. Councillors are elected people who rarely have a professional background in property and development I think one can suggest this HBC cabal should never be dabbling with it.

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