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The contractor responsible for fire alarms at Grenfell Tower is being probed by fraud squad police after accusations it installed defective safety equipment in hundreds of London properties, a Standard investigation reveals today.

Housing services company Lakehouse is at the centre of a fraud inquiry after a three-year investigation by police and Hackney Council relating to a £184 million government grant to renovate council properties and install fire and smoke alarms and emergency lighting.

The company was identified by the Standard last week as the contractor responsible for testing and maintaining the fire alarms at Grenfell Tower, which some surviving residents claimed failed to go off in the tragic blaze.

Ten people have been arrested by police after Hackney Council received allegations of “fraud and overcharging” from whistleblowers.

Further investigation revealed some of the fire safety work was “defective, including incorrectly installed alarms and emergency lighting systems”. Lakehouse denies any wrong-doing.

The council has now written to 166 town hall chief executives warning them to check work done by Lakehouse and subcontractor Polyteck in case more homes could be at risk.

The letter, seen by the Standard, says council bosses “immediately notified the police” after discovering the work was substandard.

It says: “At all times, throughout this, our focus has been on the safety of our residents.

“We have no evidence to suggest that work carried out on contracts to other councils, by Lakehouse, or its subcontractor Polyteck, was in any way at fault, so we do not wish to cause undue alarm.

“However, we believe that as social landlords, after the Grenfell Tower tragedy we must share any information with each other that could potentially help to keep our residents safer.

“It is in this context that we are writing to you, so that if you have had fire safety works carried out by either of these contractors, you have a chance to check them carefully.”

Inside Grenfell Tower 13 show all Inside Grenfell Tower 1/13 2/13 3/13 4/13 5/13 6/13 Water is sprayed on Grenfell Tower in west London after a fire engulfed the 24-storey building PA 7/13 Fire service personnel inside Grenfell Tower in west London PA 8/13 A view inside the Grenfell Tower in west London after a fire engulfed the 24-storey building PA 9/13 Sniffer dogs were sent inside to the tower today PA 10/13 Fire service personnel inside Grenfell Tower in west London after a fire engulfed the 24-storey building PA 11/13 Part of the scorched facade of the Grenfell Tower in London as firefighting continue to damp-down the deadly fire AP 12/13 Grenfell Tower in west London after a fire engulfed the 24-storey building PA 13/13 A view inside the Grenfell Tower in west London after a fire engulfed the 24-storey building PA 1/13 2/13 3/13 4/13 5/13 6/13 Water is sprayed on Grenfell Tower in west London after a fire engulfed the 24-storey building PA 7/13 Fire service personnel inside Grenfell Tower in west London PA 8/13 A view inside the Grenfell Tower in west London after a fire engulfed the 24-storey building PA 9/13 Sniffer dogs were sent inside to the tower today PA 10/13 Fire service personnel inside Grenfell Tower in west London after a fire engulfed the 24-storey building PA 11/13 Part of the scorched facade of the Grenfell Tower in London as firefighting continue to damp-down the deadly fire AP 12/13 Grenfell Tower in west London after a fire engulfed the 24-storey building PA 13/13 A view inside the Grenfell Tower in west London after a fire engulfed the 24-storey building PA

The defective works were signed off by staff at Hackney Homes, the arms-length management organisation set up by the council in 2006 in order to receive its allocation of the government’s £1.6 billion Decent Homes programme to help councils raise the standards of its housing stock.

Sources close to the case said the allegations date back to the scheme’s inception in 2011.

A well-placed source told the Standard that payments had been made for work that allegedly was not done, including fire safety work.

The source said: “Clearly it has implications for the situation councils find themselves in now.”

A Scotland Yard spokesman said: “We can confirm that in July 2014 Hackney Council referred an allegation of fraud to the Metropolitan Police Service’s Complex Fraud Team. An investigation was launched and enquiries are ongoing.

“A total of 10 people have been arrested as part of the investigation and two people interviewed under caution as part of the investigation.”

Three men aged 48, 39, and 34, were arrested on suspicion of bribery. Two were released from police bail but were “still under investigation”, while one was bailed until October pending further inquiries.

One man, aged 50, was arrested on suspicion of bribery and conspiracy to defraud and also released under investigation.

Three men aged 44, 39, and 38 were arrested on suspicion of bribery and bailed until November pending further inquiries.

Two women aged 45 and 36 were arrested on suspicion of money laundering and released under investigation, as was a 66-year-old-man who was arrested in connection with the investigation.

Two men aged 42 and 62 were interviewed under caution on suspicion of bribery.

Founded in 1988 and with its headquarters in Romford, Essex, Lakehouse employs 2,400 people and has an annual turnover of more than £340 million.

In a statement, the firm said they “never comment on commercial relationships with clients” but that they “completely refute the allegations of fraud and the other matters relating to Lakehouse”.

They added: “We are aware on an ongoing police investigation and the company continues to fully cooperate with the Metropolitan Police in its investigation and support any actions taken against individuals in relation to the allegations which arose in 2013 and 2014.”

Hackney Council said it has been re-doing the fire safety work at 68 tower blocks “to a standard that was fully compliant with regulatory requirements and our specification, and at the contractors’ own expense”.

Hackney Homes was brought back in-house by the council in April 2016. Hackney’s elected mayor Philip Glanville told the Standard the council carried out a “wholesale restructure” of the surveyors’ team and said: “The majority of former Hackney Homes staff left the organisation.”

He added: “Grenfell and its aftermath raises many issues about the conduct of the construction industry, including sub-contractors, and also about arms-length management arrangements for housing.

“It is right that councils and social landlords should work together, share information and support each other to prevent future tragedies, which is why we have taken this action.”

Scores of blocks of flats across the UK have failed emergency fire safety tests carried out in the wake of the Grenfell Tower disaster which killed an estimated 80 people.

Lakehouse, which has faced a number of difficulties since floating on the Stock Exchange two years ago - including issuing a series of profit warnings and enduring a boardroom battle with senior management leaving - did not declare its involvement in the tower when announcing its results to the Stock Exchange last week.

While investigations into the inferno have so far focused on the cladding, it is expected that the role of fire alarms will also be closely scrutinised.

Lakehouse chairman Bob Holt said last week the company had not been asked to give evidence to any inquiry and said: “We are very happy because there have been many people saying they were woken by the alarms.”

Responding to today’s revelations, he said: “I have no comment to make.” The Standard has approached Polyteck for comment.

Retired judge Sir Martin Moore-Bick, leading the inquiry into the Grenfell Tower disaster, is preparing to consider the “broad” causes of the fire amid concern from survivors’ groups over its scope and leadership, and will scrutinise issues tracing back to building regulations at the time the block was erected.

Meanwhile Elizabeth Campbell, nominated to take over from Kensington and Chelsea leader Nicholas Paget-Brown, who resigned on Friday amid fierce criticism of the council’s response to the tragedy, said she was “truly sorry” and pledged to “heal the wounds” in the community.