Daily Archives: June 15, 2017

Housing Regulation

There are two separate but linked questions arising from the terrible disaster at Ladbroke Grove. One is the efficacy of national building regulations on fire and safety. It is plainly true that, if Grenfell Tower met them, they are inadequate. The second is how Kensington and Chelsea Council in particular manage their housing.

To look at the second question, I do agree with David Lammy that there is potential criminal culpability here, but I am not quite sure that he is right to describe it as “corporate manslaughter”. It seems to me that responsibility rests more with government than with corporations (though I accept that the former is a tool of the latter).

One of the most retrograde developments of my lifetime has been the wholescale “outsourcing” of delivery of public services away from direct government provision. So rather than by council employees, your bins are probably emptied and your streets swept by a private company paid to do it. Just as your utilities are supplied, your trains run, civil servants get their stationery ordered, increasingly medical services are provided, international aid projects are administered, and literally thousands of other examples.

This development was driven by the ideological belief, often fanatically held, that people employed by government are less efficient than those employed by the private sector. That ideology also depended on a rejection of the very notion of altruism; which rejection of altruism was at the heart of Thatcherism. The idea that people are only motivated by personal gain is of course quite untrue. Firefighters, who are still employed by the public, have proved that just now, beyond anything I can say, by going well beyond their contractual duty to try to help. But even accepting for one moment, for the sake of argument, the doctrine that people are only motivated by money; it plainly does not follow that public services would be more efficiently delivered by the private sector. What does follow is that public services will suffer from profiteering if run by the private sector.

But this disastrous contracting out is not always to private for profit companies. It is sometimes to what Tories call the “third sector”, meaning charities and not for profit companies. Much of the aid budget is now spent this way. Not at all coincidental, the pumping of large amounts of public money into this sector has coincided with a quite incredible rise in the salaries and emoluments of senior charities staff.

We have ended up in the situation where executive staff of charities are on over £200,000 a year, where the chief executive of Save the Children gets twice the salary of the Head of DFID, and where people who occupy what were once public sector jobs in rail, water or housing can earn ten times what their public sector predecessors were getting. At the same time wages, employment protection, conditions and unionisation for the actual workers have all been cut.

This is important because the Kensington and Chelsea Tenants Management Organisation Ltd is a not for profit company. No shareholders get any profits from it, and it does not remunerate its directors. This is the body which manages Grenfell Towers and did the refurbishment. Some of the (rightly critical) comment has assumed that KCTMO Ltd is a profiteering private company and this is why it has skimped on possible safety features like sprinkler systems. But it is more complicated than that.

The majority of KCTMO directors, including the chairman, are themselves tenants of the council’s housing. Three more are council appointed. The philosophy behind KCTMO Ltd is on the face of it benign – the tenants are managing their own properties. Which leads to the question of why relationships had broken down so badly between KCTMO and those apparently speaking for the residents of Grenfell Tower, particularly over fire safety issues.

Some of the answer to that may relate to social hierarchy among different types of council tenant. I do not know if anyone on the KCTMO board lived in Grenfell Tower, but imagine we would have been told that if so.

My experience of other organisations would lead me to suspect that in practice KCTMO Ltd did not operate in the way that it does on paper, and that the Chief Executive and other officers had a disproportionate influence. I have seen enough decisions in enough public bodies with a supposedly democratic structure – including universities and councils – to know that the elected representatives often find it very difficult to challenge the “expertise” of the executive officers. This is particularly likely to be true in an area like housing, where there are architectural, construction and legal issues. You quickly end up in a situation where the elected representatives are not really making decisions but only rubber=stamping the decisions of the officers. I saw various tenants who had been involved in the complaints to KTCMO interviewed yesterday, and they all referenced the Chief Executive, Robert Black, and not the tenant representative Chairman.

KCTMO’s staff costs are just over £10 million per year. I can find nothing on wage structure and what the executive officers are paid. I hope that information will become available.

But I can see no reason to believe that Mr Black or anybody else could make any personal gain from not installing a sprinkler system, for example. It appears responsibility for providing funds for this kind of capital expenditure lies with Kensington and Chelsea Council and not with KCTMO. It happens I lived for three years in Shepherds Bush and know this area very well. Ladbroke Grove is 15 minutes walk from some of the most expensive houses in the world. The idea that people in social housing were not high on the priorities of the council rings to me entirely true. In fact there is plenty of evidence that councillors are in cahoots with developers looking to demolish the social housing and build yet more massive luxury developments primarily for sale to the global “elite” of the extremely wealthy.

So much for the local picture. Nationally, it appears beyond argument that the government has failed again and again to update regulations following similar fires both in the UK and elsewhere. Yet again this is ideologically driven. Deregulation is a key principle of neo-liberalism. The government has an intrinsic belief that anything that adds costs or restriction to corporate profit should be resisted, and the idea of adding new regulation is simply anathema to them. That background cannot be ignored. The more you dig into this terrible tragedy, the more lurid a light is thrown on Neo-Liberal Britain.

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