Leaseholders will recently have received a letter dated 16 June 2025 from the Corporation seeking a ‘dispensation from consultation requirements in relation to temporary worker contracts’.
An explanation as to what that means is provided by Judith Finlay, Executive Director of Community and Children’s Services below:
The City of London did not consult with leaseholders before entering into a 2017 contract with Hays for the provision of temporary workers, including cleaners, porters, concierges and supervisors.
Nor has the City fully consulted with leaseholders before entering into a 2025 contract with Reed for provision of the same services.
Leaseholders have already paid for these services in their annual service charges.
The City is now seeking a retrospective ruling from the First-tier Tribunal that the full amount of the charges can be retained by the City.
If the City loses the case then leaseholders would receive a refund of any charges above £100 per year that have been incurred under either agreement.
The City is confident that it will be successful in the case.
However, individual leaseholders on Golden Lane are able to oppose the City’s application if they wish to do so.
The total amount over the £100 cap that has been charged to leaseholders on Golden Lane for the relevant services in the years 2017/2018 – 2023/2024 is £50,510.56.
Therefore, in making the application in relation to the 2017 Hays agreement, the City is seeking to ensure that it can lawfully recover £50,510.56 from leaseholders across the Estate in total (plus whatever amount has been incurred above the cap in the 2024/2025 year, which has not yet been calculated). The £50,510.56 has already been collected from leaseholders.
Figures are not available for the 2025 Reed contract as yet.
Leaseholders have until 31 August 2025 to respond.
application documents
Copies of the application to the First-tier Tribunal, statement of case, supporting documents and a copy of the Tribunal’s directions can be found on the Col Website.
Printed copies can be obtained by writing to the Corporation at the Barbican Estate Office, FAO Nazia Norman, 3 Lauderdale Place, London, EC2Y 8EN or by email to nazia.norman@cityoflondon.gov.uk
Explanation for why dispensation is sought (taken from the Dispensation Application Hayes Agreement):
- Dispensation is sought for the following reasons:
22.1. It is not possible to comply with the consultation requirements (see paragraph 20 above), such that a failure to comply does not prejudice the affected leaseholders.
[para 20: The City accepts that it did not consult with the affected leaseholders before entering into the Hays Agreement. However, because of the nature of a framework agreement under which the Hays Agreement was procured, it was never possible to comply with the consultation requirements; such agreements do not fall squarely within any of the Schedules to the Service Charge (Consultation Requirements) (England) Regulations 2003.]
22.2. The City considers that the Hays Agreement represented, and represents, the best value for money for the services provided –
22.2.1. As set out above, that was the conclusion of the tender exercise carried out prior to the Hays Agreement being entered into. There will always be a need for the provision of temporary workers, and the City required someone to provide those
services.
22.2.2. The cost of an individual agency worker is generally cheaper than the cost of a full-time employee. As agency workers will be instructed where a full-time employee is not available, the overall cost of agency workers will be reasonable.
22.2.3. Hays has a large pool of available agency workers and has experience in providing the same. They also have the necessary technological infrastructure to facilitate and support the City’s needs. This ensured that it is possible to fill vacancies at short notice, that the workers had the proper expertise/ training, and that the costs of providing those workers was reasonable.
22.2.4. The actual costs of the temporary workers to be engaged under the Hays Agreement beyond the base cost of the workers themselves are set out in the attached Schedule.
22.3. Entering into the Hays Agreement was the best way for the City to manage the need for temporary workers. Given the size of the Barbican and HRA Estates, it was not practicable for the City itself to engage individual workers directly whenever there was a vacancy, nor was it cost effective for the City to undertake that role. The City considers that Hays was best placed to ensure that workers are placed efficiently and that the needs of the City and the leaseholders are met.
22.4. The City has considered the representations made by the leaseholders in respect of the Hays Agreement (whether made as part of the previous dispensation application or otherwise). The City nevertheless still considers that the Hays Agreement was and is the best option for all those concerned.
22.5. In an application brought by an individual leaseholder on the Barbican Estate under s.27A of the 1985 Act, the Tribunal considered that the vast majority of the costs incurred under the Hays Agreement were reasonable. The only reduction made was to estimated costs for cleaners for the 2023-2024 service charge year.
22.6. Accordingly, not only did the Hays Agreement not prejudice leaseholders but it actively benefited them, and the services provided/ costs incurred were reasonable.- Furthermore, and for the reasons given above, dispensation should be granted on an unconditional basis. No prejudice has been suffered by the Respondents, let alone any prejudice that requires the Respondents be compensated in some (unidentified) way.
- Alternatively, and without prejudice to the foregoing, if any conditions are imposed on the grant of dispensation, then they should be limited to reflect the Tribunal’s findings referred to at paragraph 22.5 above.
