Barbican Estate - Your service charges explained

The Barbican Estate Office is embarking on a series of articles to help you better understand your service charges. This first article will explain the service charge account and current and future projects that we hope will improve the customer experience.

We start with an introduction to the Barbican accounting processes. Recent large variances in the service accounts have raised concerns with residents, particularly regarding effectiveness of current communication methods. The Barbican Estate Office is developing several initiatives to improve the situation, including the development of a communication strategy in conjunction with residents and a series of articles in the weekly bulletin to explain how we set and manage the service charge account, kicking off with a general introduction.

The Barbican Estate Revenue Budgets are managed by the Service Charge and Revenue Team who oversee six accounts covering the management of whole estate:

The Service Charge Account manages the expenditure which is chargeable under the terms of the Barbican long leases and the income recoverable under the lease provisions. The service charges are set out in clause four of the lease and further detailed in the fifth schedule. Clause four and the fifth schedule will be covered in more detail next week.

The Landlord Account manages those areas of the estate which are not service chargeable including expenditure for the management of the Podium, public gardens and ten commercial properties.

The Car Park Account manages expenditure for the repairs and maintenance, rates, utilities, and a proportion of staff costs. The account also generates income from licence fees, service charges and temporary parking fees. The charges are paid by customers who have leased parking bays.

The Stores Account manages expenditure for storage units and generates income from rental fees.

The Trade Centre Account manages expenditure relating to the Trade Centre area and the income generated through annual rental charges.

The Supervision and Management Account manages the salary costs of office-based working from the Barbican Estate Office. The account also manages the on-costs, for services received from the City Corporation's central departments including Chamberlain, IT, HR and so forth. The expenditure is divided between the five other accounts accordingly.

The expenditure from the Landlord, Car Park, Stores and Trade Centre accounts are not included in the service charge for your flat.

This week we are explaining the expenditure and income managed through the Service Charge Account. The Service Charge Account contains the expenditure chargeable under the terms of the Barbican long leases and the income recoverable under the lease provisions. The Service Charges are set out in Clause four and the Fifth Schedule of the Lease.

Clause four details the provisions regarding the specified repairs, as follows:

• Repairs to keep in repair the structure and the building in which they are situated
• And any other property over which the lessee has any deemed rights e.g., estate wide areas
• The total cost of the lobby porter service and their associated expenses are apportioned between the three towers
• A proportion of car park attendant’s costs, for services which are not car parking based, examples include packages and keys. The charge to each terrace block is specified in the Lease and the total charged to the terrace blocks is 36.8%
• Expenditure on management and professional fees which are apportioned from the supervision and management account

The Fifth Schedule comprises five parts which are 100% rechargeable, except Part III which is 85%.

Part I defines charges across six areas:

1. The service, maintenance, repair, renewal, and insurance of:

• Lifts
• Security Equipment
• Ventilation equipment
• Electrical and mechanical and plumbing services, and installations in common parts
• Underfloor or alternative background heating

2. The provision of electricity for:

• Common parts of the building
• Any lift in the building
• Ventilation equipment in the building
• Background underfloor heating from 1 October to 30 April and at other reasonable times. It should be noted that Frobisher Crescent lease has different provisions

3. Redecoration, refurnishing, recarpeting, and cleaning of the internal common parts including exterior of flat entrance doors, corridors, staircases, entrances, and foyers

4. Repair of the internal common parts of the building

5. Redecoration and cleaning of the exterior of the building

6. External window cleaning

Part II relates to the Garchey and includes the cost of maintaining the refuse system in reasonable working order and the provision of electricity, materials, and staff to cleanse and maintain the system.

Part III is in reference to the maintenance of the garden areas, including the lakes, and is 85% chargeable.

Part IV is for the salaries and associated expenses connected with Key Porters, Storekeepers, Resident Housekeepers, Resident engineers, any other staff employed by the Corporation at its reasonable discretion. The provision also refers to the provision of refuse sacks for the collection of dry refuse and “all other such matters whatsoever in relation to which the Corporation may reasonably incur or decide to incur any costs liabilities or outgoings in relation to the building.”

Part V relates to all other such matters whatsoever in relation to which the Corporation may incur or decide to incur any costs liabilities or outgoings in relation to the estate.

97% of the dwellings on the Barbican Estate have been sold on long leases.There are several let on market rents and a notional proportion of that rent is deemed to be in respect of services charges and credited as income, normally 20% but varies annually based on major works, redecorations, and heating costs.

This week we are explaining the annual service charge statement. 

The statement is structured into the following columns:

• Actual costs for the previous year
• Actual costs for the current year
• Actual % difference – the percentage variance between the two years
• Estimated charges for the current year
• Estimated charges for the following years

The costs are then broken down under four service level agreement headings as follows:

Customer care is the blocks proportion of costs for supervision and management and includes the cost of barbican estate office employees calculated on the time spent on service chargeable functions and services received from City of London departments e.g., finance IT, legal, procurement and so forth.

Estate management includes the Resident engineer’s salary and accommodation costs, Cleaners, Car Park Attendants and Lobby Concierge. Supplies and services are also included here and cover items such as equipment, furniture, cleaning equipment, CCTV equipment, carpets, uniforms, and office supplies.

It should be noted that officer’s keep timesheets for all their activities to ensure charges are apportioned accurately across the accounts.

Property management covers the Repairs and Maintenance to works in the residential blocks and residential areas of the estate. Energy costs includingelectricity costs for common parts, lighting and power, background underfloor heating and gas costs for Frobisher Crescent heating.

Open spaces relate to Grounds Maintenance includes maintenance of the private garden areas, with 15% of the cost of maintaining the private gardens charged to the landlord account.

The final section is called ‘non-annually recurring items’ and refers to one offmajor works projects or repairs such as external and internal redecorationprogrammes, roof repairs and window replacements.