Having already had one nightmare with a housing block refurbishment, Hackney council wasn't about to make the same mistakes. Thomas Lane found out how the team applied bitter experience to make its next project a triumph.
This is the story of two sisters, Rogate and Alma. They are 1970s deck-access council blocks that sit next to each other on Hackney council's Nightingale Estate. Both have both been completely refurbished inside and out with new roofs, services, windows and interiors. Both look identical, with their smart cream paint and the shiny new metal balconies that break up their long concrete walkways. But they are different in at least one respect: Rogate was refurbished twice as quickly as Alma.

The discrepancy arose because of their procurement routes. Alma was purchased traditionally, whereas Rogate was an early partnering project – a first for Hackney. The experiment in partnering was a bid to improve performance by cutting construction time and cost. But Alma does have a place in the story: it was used as a benchmark for the £13.3m refurbishment of Rogate House.

The refurbishment of Alma House in 1997 was a disaster for the council. It underestimated the amount of asbestos in the building and the extent of the deterioration of the concrete frame, and the extent to which the residents would refuse to co-operate with the works (one man permanently barred his door and got in and out of his flat by shinning up and down a drainpipe). Even worse, defects were discovered after the building was signed off, further aggravating residents and causing a continuing headache for Hackney's maintenance department.

After it was over, the council decided that it could not cope with any repetition. So, it went back to basics to identify what had gone wrong before doing up Rogate House; a job that fell to property consultant and QS Leonard Stace, the commercial manager for Rogate.

It came to the conclusion that a traditional contract did not deliver time and cost certainty, and examined alternative procurement methods to see which was most likely to deliver the best results for a complete refurbishment.

Leonard Stace identified several key factors that had to be addressed if the job was to run on time and to budget. First, a complex refurbishment needs a long lead-in; the Alma House job had been given a frantic four weeks before traditional tenders were submitted. Second, the early involvement of contractors and specialists is essential if they are to fully appreciate what is involved, and are to suggest solutions to likely problems. David Harrison, a partner at Leonard Stace, says: "The subcontractors know how the work should be done, and can come up with the ideas; they are the only ones who know how to do this. If you are going to run one of these projects, you need six months to get it right."

The council settled on a two-stage contract so the initial preliminary period could be used to identify the problems and come up with the best solutions before construction started. This period ran in the six months between April and September 2000, after which the 90-week construction phase started.

Hackney selected the team early on to fulfil Leonard Stace's recommendations. Architect Abbey Holford Rowe was selected in early 1999 and started by carrying out consultations with residents. The main contractor Wates became involved in January 2000 and formally won the contract in April. It was selected on a best value basis, and because it had a track record of working closely with subcontractors. Wates was not the cheapest, but quality was important to avoid problems with defects. Tenders were assessed on a weighting of 60% for quality and 40% for price.

Halfway through the six-month pre-construction period, the council announced that it wanted to change to a partnering arrangement. This was more a case of evolution than a snap decision out of the blue. At the time, partnering was just becoming established as part of the Egan orthodoxy, and was not widely used. Noel Foley, procurement and partnering manager at Hackney, was keen to push partnering as it had the potential to deliver better value – vital for a desperately cash-strapped borough. The council was also reeling from a particularly nasty relationship with the contractor on Seaton Point, an earlier refurbishment on the Nightingale Estate. Solicitor Trowers & Hamlins was engaged to draw up a special partnering contract, to which all members of the team agreed.

This subsequently went on to become the groundbreaking standard form contract PPC2000.

The contractor and specialists acted as consultants at this stage in the process to identify the best way of carrying out the refurbishment. The concrete specialists carried out a complete survey of the building to avoid nasty surprises once the contract was under way, and the same was done for asbestos.

Harrison stresses the importance of programme sequencing for success, in particular the need to allow for problems decanting difficult residents. This meant that the specialists had to be closely involved in contingency planning. "We wanted to build transparency into the programme," he explains. "We needed the concrete specialists on board early in case we needed to rejig the programme; they would know whether these changes were achievable." A close-knit team with a common objective – which PPC2000 was drafted to encourage – was the only way this approach could work.

The contractor and specialists also helped to come up with design solutions, which they did by the simple expedient of refurbishing a test flat. Harrison says: "We were tapping into the professional expertise of the contractor and the specialists."

Multiskilled specialists were selected in preference to individual trades such as plasterers and electricians, as this would speed up the programme and require fewer visits to each flat – one of the problems that had been identified at Alma House.

Getting the support of the residents was vital; they had to feel engaged with the process if the project team had any hope of getting them to co-operate. "Even though we were working for Hackney, we were also working for 192 clients," comments Harrison's colleague, Fernando Jorge, who acted as project co-ordinator.

Project architect Alan Blyth carried out the tenant consultations. This involved a lengthy series of meetings between residents and architect with specification options being offered to residents complete with cost implications.

Because costs were so tightly managed, trade-offs were necessary to keep within budget. Residents were closely involved with this process, too. John Carroll, regeneration manager at Hackney council says residents were also consulted at Alma but he points out "the good thing about this was that there was more of a sense of ownership at Rogate".

The upshot of the collaboration was that the block's flat roof was refurbished, rather than replaced with an expensive butterfly roof, as at Alma House. The money saved here went on quality kitchens and aluminium and timber windows, a higher specification than at Alma. The tenants also went for porches at ground level. The lead-in period and partnering approach meant that these costs could be managed within the programme without causing headaches.

One problem with traditional contracts is that unforeseen problems can wreck the design, as everything is set in stone once the tenders and subcontracts have been let. The corollary is that the flexible partnering approach "allowed the delivery of most, if not everything that was initially agreed," says Blyth. He is particularly delighted with the external metal balconies, which were the outcome of a close relationship between Abbey Holford Rowe, Wates and the balcony supplier. This was made easier by the fact that Blyth worked out of the same office as client and contractor, and was available to comment on and refine the design on the spot. "There was an immediacy of connection through Wates to the supply chain," he says. The whole team all agrees the balconies on Rogate look better for less money than at Alma.

Another example of where a collaborative design approach saved time and money is the refuse chutes. Alma House has precast concrete chutes. "I saw no problem with this," says Blyth. "Then Wates pointed out that concrete chutes take a lot of work and cost more." A cheaper metal chute was substituted, which Blyth managed to incorporate into the overall design rather than as a last-minute compromise, and is delighted with the result.

The big test for the partnering approach, however, occurred with a cut-through that was to be made in the middle of Rogate House to create two separate blocks. Some residents refused to move, and the problem was compounded because accommodation for them was not ready. This led to a disastrous 20-week delay, which was then cut down to six weeks through clever resequencing. This flexibility meant that the financial penalty was small. Hackney's Carroll breathes a sigh of relief: "This has not cost us anything; with a traditional contract this would have cost us a fortune while the contractor sat around twiddling his thumbs." The team is unanimous that things would have got very contractual if this had not been a partnering project.

Installing the services without aggravating the residents was another area to benefit from the collaborative approach. This was a vital part of keeping them on side. If relations with one resident breaks down, Carroll says, so will relations with everyone else on the corridor. Wates worked very closely with its specialists to keep residents happy.

The flats are serviced in vertical stacks, so turning off the water supply to one meant that all the others were affected. It took very careful design and programming to make sure that all the residents in a stack lost their water supply only once, for a few hours. A particular challenge was when the gas supplier Transco suddenly announced it wanted to renew its equipment in each flat. Wates accommodated this into its programme and worked with Transco to ensure that it only went into each flat once.

The project did inevitably have its problems but the prevailing attitude ensured these were sorted out with the minimum of fuss. For example, the PPC2000 contract specifies that the client must nominate a representative on the team. The project managers provided by Hackney kept changing because of staff turnover problems, and at times there was no client representative. Wates and Abbey Holford Rowe went to the client and suggested that someone from Leonard Stace should take on the role. "Hackney took the cost on the chin and paid out for a project co-ordinator" says Steve Carter, Managing Surveyor for Wates.

The net result of the partnering approach is a job that is a success on all fronts: performance has been improved across the board. At Alma it took 115 weeks to refurbish 108 units, within the specified time but "the contract was ridiculously long" according to Carroll. At Rogate, the contract will take 90 weeks to refurbish 192 flats, double the speed. The budget at Alma went 18% over, compared with less than 6% at Rogate. Rogate has ended up costing the same per unit but the tenants feel they have got more and the Clerk of Works for Hackney Council has given the scheme a score of 80% for defects. Carroll says there were problems with defects at Alma but this has not been a problem at Rogate, even though there has been plenty of time for defects to be revealed.

Blyth says this is reflected in conversations with residents. "I have been stopped more often by residents for a compliment rather than for a negative comment," he says. The only downside is the regeneration programme on the Nightingale Estate is complete, and the close-knit team will have to go their separate ways in June when the project is finally complete.

Martyn Jones principal lecturer in construction management at the University of the West of England

Traditionally, the end user and the specialist subcontractors are seen as being at the opposite ends of the supply chain – and indeed are often deliberately kept apart by a complex labyrinth of contractual, adversarial inter-organisational relationships, and opaque and fragmented processes. Rogate shows the benefits of working in a collaborative way and assembling and integrating the team, from the tenants to the specialist subcontractors, at the earliest possible point in the project. Further lessons are the benefits of empowering these two principal stakeholders – tenants and specialists – and putting them at the centre of the refurbishment. Other factors contributing to the success of the project include strong client leadership in implementing the new approach, selection of the appropriate suppliers on the basis of best value, their integration and the recognition that construction – and particularly refurbishment of occupied buildings – is essentially about people. More specifically, it demonstrates the benefits of allowing sufficient time for value-adding activities at the front end of projects including the accumulation and sharing of knowledge and understanding so that a clearer picture of the tenants’ requirements and the impact of the refurbishment activities on their lives is developed. And the perennial downside to this and many other successful construction projects? Come June, the team and its accumulated knowledge and understanding will be dispersed unless, of course, further leadership is shown by someone – within or outside the team – to keep them together.