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City blackspots revitalised with private investment

Agenda

Housing stock transfer is not the only idea around using private investment to regenerate the UK's most deprived urban areas. A £90 million PFI pilot scheme has been set up to repair, refurbish and maintain council homes in Manchester. Sean Barry reports

DURING the late 1980s, central Manchester earned the unenviable reputation as one of the UK's most crimeridden cities.

Plagued by a wave of violent street crime and with gun battles fought around a number of notorious council estates, the city became known as 'Gunchester'.

Many run-down estates turned into no-go areas and rows of dilapidated homes were boarded up as residents fled to safe havens to avoid the chaos.

The situation underlined how badly planned, poorly designed and cheaply built council estates rolled out in the 1970s could transform into the perfect breeding grounds for criminal activities.

Desperate to tackle the state of its housing stock, Manchester City Council, along with many other cash-strapped local authorities, has battled hard to find ways to regenerate its decaying estates in a bid to lower crime rates and improve the physical environment.

Providing long-lasting improvements in the physical and social conditions of housing estates by rectifying poor design characteristics, as well as demolishing overhead walkways and creating more conventional street layouts, is viewed as a key measure to drive out the criminal element.

But councils face an uphill task in tackling the huge backlog of repairs in their most deprived areas. Lack of resources and a shrinking pot of cash leave authorities with few options to deliver the changes needed.

The government has also stepped up pressure and under the Decent Homes target, outlined in the government's housing green paper, councils have been set the challenge of bringing the standard of their social housing stock into a decent state of repair by 2010.

The clock is ticking, and, apart from transferring homes to registered social landlords, the situation has left housing chiefs across the country scratching their heads.

But in 1999 the former Department of Transport Environment and the Regions unveiled plans to bring in the private sector.

The Private Finance Initiative model - successful in delivering improvements in other sectors such as health and schools - was to be modified for the repair and maintenance of council homes in eight pilot regions.

Manchester City Council, desperate for a cash injection to bring its housing stock up to scratch, put forward a proposal to take part in the flagship scheme.

The proposal was to bring in private-sector cash to revamp over 1,000 dilapidated homes while ownership is retained by the council.

The pilot, the biggest of all of the test sites, was accepted and this autumn homes in the Plymouth Grove and Stockport Road estates will be transformed under the country's first PFI pathfinder housing scheme.

Located in the Ardwick ward of the city, houses on the estates are in dire need of repair and in many cases demolition.

The area has become a crime-ridden black spot. The problem was highlighted in a Manchester Police audit last year when it topped the league for serious crime levels.

The regeneration scheme will see £90 million pumped into the estates over the next 30 years. The combination of private and local authority cash will be invested over the life cycle of the contract.

The private-sector Grove Village consortium, headed by Gleeson, was selected by council chiefs as its preferred partner at the start of this year, after breaking the tape ahead of three other competitors in the marathon tendering process.

Getting the pathfinder project off the ground has not been easy. The scheme, along with the other seven pathfinders, has suffered a serious of horrendous delays that has put back work starting on site by over a year.

A mammoth round of resident consultations, formalising detailed stock condition surveys and trepidation among senior government officials have all added to the hold ups.

But after sailing a steady course through the choppy PFI waters, the council is close to giving the programme of demolition, refurbishment and new build work the green light. Financial close is expected to take place late summer and work is earmarked to get under way in the autumn.

Derek Martin, head of strategy for Manchester Housing, said: 'We needed substantial investment in the refurbishment and management of the housing stock. This required a big injection of capital investment to make the changes necessary.

'When we looked at the options such as stock transfers, the business plan didn't stack up so we opted to take part in the PFI pilots.

'But it's been a difficult process and you have to expect that with this scheme being one of the first of its kind. It's not just about building some new homes. We're trying to totally regenerate an area of the city and maintain it over a 30-year period.'

Bridget Guilfoyle, project manager for Manchester Housing, added: 'Agreeing all the information from the stock condition surveys with all the parties involved took a lot longer than anticipated.

'Part of the delay was providing the parties with the required level of detail to get them to the point where they could submit a price.

'The levels the private-sector work to are very high and ideally they would have liked a 100 per cent internal and external survey instead of a 100 per cent external and 50 per cent internal.'

The team is keen to emphasise that tenant consultation has been a central plank to the whole PFI process and recommendations from the resident steering group have continually been taken on board.

A swathe of the estate is made up of two-storey structures and fortunately it lacks the tower blocks synonymous with 1970s architecture. The work programme involves carrying out the external and internal refurbishment of 661 homes over the first three years.

Running alongside the refurbishment work will be the demolition of around 1,150 homes, which will make way for the construction of 600 new properties. This is likely to take a further three years to complete and will include a mixture of homes for sale and rent.

Gleeson Construction will carry out the refurbishment and new build, while consortium partner Powerminster will do the mechanical and electrical work and the maintenance. Mary Parsons, development manager for Gleeson, said: 'We're not going to start in one corner of the estate and work our way down over the three years.

'It's important the residents start to see a difference straight away and we'll send two or three teams out from the start to work right across the estate.

'We're now in the process of talking to our elite supplychain partners, such as kitchen manufacturers, about entering into longer-term contracts because of the 30-year nature of the deal.'

Gleeson and its consortium partners are paid a unitary charge by the council for the management and maintenance of the stock.

Payment levels depend on meeting a number of output specifications and there are penalty charges if the team fails to deliver.

Ms Parsons said: 'From day one of the contract we get paid for taking over the management and maintenance of these properties.

'There are different levels of payment and a unitary charge for upkeep of the properties. There's an interim period where we get a reduced amount per dwelling until the work's finished and then Powerminster comes in and carries out the maintenance. Our other partner Harvester will collect the rent.'

The team will be measured against a set of Key Performance Indicators currently being drawn up by housing chiefs. It will be measured in around 20 delivery areas.

'There are still four or five key areas we are negotiating.

These centred around drawing up measures for tolerable call-out times for maintenance teams, repair standards and service failure points, ' said Ms Parsons.

Stepping up security for tenants will be a central plank of the improvements. Close-circuit televisions, burglar alarms and door and window locks will play a crucial role in making tenants feel safer in their homes.

'From design to day-to-day management, we are determined to make people feel safer. It's been quite an education for everyone involved in trying to interlink all the work, ' said Ms Parsons.

All eyes are on Manchester with the other seven pathfinder projects not even close to announcing start dates for work on site. Nearly three years after the schemes were unveiled questions are being asked as to the viability of the PFI for social housing regeneration.

By their very nature, the schemes are intended to iron out any teething troubles that emerge during the process.

But residents demand swift action to upgrade their decaying homes and need to see results soon.

With financial close set for late summer, tenants in the two estates will expect to see a fleet of construction wagons driving into town by the end of the year.

Bridget Guilfoyle and Derek Martin, from Manchester Housing who taking part in the PFI flagship scheme, are running a project which will rebuild Manchester's forgotten blackspots District heating scheme PART OF the work programme will centre around a £1.4 million upgrade of a district heating system.

The system, installed when the estates were built during the 1970s, provides homes with hot water and central heating from a communal boiler and is popular with residents because of the environmental and social benefits.

During the consultation process, residents across the board agreed that the heating system must remain in place. This led to consortium member Powerminster working up proposals to revamp and maintain the system over the 30-year concession. A Powerminster spokesman said: 'Retention of the system is quite a challenge with all the issues arising from the regeneration of the estate, such as the demolition phase and building works.

'There was no desire to take up a decommissioning option and wherever possible additional connected loads will be sought.'

The work will involve diversion of underground distribution mains, replacement of all central boiler plant and some roof mains. It is expected to be completed by the end of the third year.

The Grove Village consortium is also working up proposals to extend the heating system out to connect new homes built under the PFI scheme.

The Grove Village consortium:

nGleeson nPowerminster nHarvester Housing Group nPRP Architect nGleeds nPriceWaterhouseCoopers nEversheds, law firm nNationwide nABA Engineers