Southwark's Austerity Firesale

Fatema Ahmed

On 15 January, in a six-hour meeting that ended just after midnight, Southwark Council’s planning committee voted to turn the Heygate Estate in Elephant and Castle, where 2800 people once lived in 1212 flats, into a ‘mixed-use development’ of 2500 homes for 4000 people, plus shops and restaurants and some ‘community space’. It was asked why the scheme would be an improvement on what’s already there. ‘It’s better because it’s an improvement,’ came the non-answer. Nearly 300 fully grown oak trees will be cut down to make way for a privately managed park. A quarter of the land will be given over to car parking, on a site that has the best transport connections in London.

According to council targets, 35 per cent of any new development should be affordable rented housing (‘affordable’ means 80 per cent of the market rate, too expensive for the 20,000 people on Southwark’s waiting list); only a quarter of the new flats will be. And a mere 79 of them will be for subsidised, secure tenants. But before the council could spend £15 million demolishing the estate and hand the site to the developer, Lend Lease (who will pay Southwark back later), there was a last kink to be teased out: the three remaining Heygate leaseholders who didn’t want to sell their flats; certainly not at the prices they’d been offered. Last week, the Secretary of State for Communities and Local Government granted a compulsory purchase order.

Southwark’s long campaign to hand an empty site in Zone 1 to a private developer is nearly over. The Liberal Democrats, who ran the council between 2002 and 2010 (first alone, then in coalition with the Conservatives), organised the clearance of the Heygate’s inhabitants, issuing a third of the secure tenants with eviction notices. Since then the Labour Party has been desperate to finish the job and take the credit. Their motives are at first glance politically mysterious. Westminster’s illegal moving of poorer, unlikely-to-vote-Tory council tenants out of marginal wards in the late 1980s has been a long-term political success, delivering comfortable Conservative victories ever since. What Southwark’s doing is legal, but no less unjust, and says something much worse about the state of local government in London, because all three main parties have more or less the same policy. The local MP, Simon Hughes, is outraged that the scheme’s first homes are being marketed abroad; it’s not clear if he’d be all right with people from Chipping Norton snapping up the impossibly priced one-beds, which start at £310,000.

At the compulsory purchase order hearings in February, the competing accounts of the estate’s history and the physical state it is now in were so wildly different that the adversarial format of a hearing can’t account for the gap. The objectors pointed out that the Lend Lease plan didn’t conform to the council’s 2004 strategy for the wider area; the council tore the plan up last year and says it doesn’t apply. The council’s written submission mentioned the decline in the buildings’ maintenance (for which it was responsible) and the dangers of ‘progressive collapse’ (think Ronan Point) in 1960s buildings built using pre-cast concrete panels. It couldn’t actually say that the Heygate is in any such danger, because it isn’t. The estate uses a different pre-cast system from Ronan Point, and was built later (finished in 1974) to tighter standards. Catherine Croft, the director of the Twentieth Century Society, spoke at the hearing on behalf of the Better Elephant group, which is campaigning for a regeneration scheme that actually benefits local people. ‘In decades to come,’ she said, ‘we will be astounded how structurally sound buildings were cavalierly demolished.’

There's a full account of what's happened to the estate at Southwark Notes, a treasure chest of archive material and gallows humour, documenting the changing policies and promises regarding not just the Heygate, but the Elephant and Castle as a whole.

Southwark blames austerity and the repeated slashing of social housing subsidies for the lack of social rented units in the scheme. Central government cuts weren't the reason the council started looking to release the 'latent value locked up in the land beneath' the Heygate in the late 1990s. But now there’s a £23 million hole in their 2014-15 budget, with a 10 per cent cut coming the year after. Money from developers around the borough – for public facilities, a few affordable homes, some training schemes – is the only new cash the council is going to get. In 2011-12 it reported £67 million from such agreements, up from £15.5 million the year before. The median income of the social housing tenants it already has is £9100 – not much council tax revenue to be had there.

Since signing the regeneration agreement with Lend Lease, the council has refused to say how much it was selling the land for. The figure came out by accident at the beginning of the year: £50 million. It has spent £44 million buying out leaseholders and rehousing tenants. The staggered nature of the development – due to be finished in 2025 – means that Lend Lease can build the most profitable sections first and put in the affordable homes when it wants. Or it could just sell the land, at a higher price, without building them at all.

Last week Southwark also said that it wants to build 10,000 homes, a commitment which seemed unlikely almost as soon as it was announced. If any are built, they won’t be in Elephant and Castle, of course, or anywhere else in Zone 1, all of which is going cheap in the austerity firesale.


  • 28 July 2013 at 11:09am
    ECResident says:
    Do you live in a rotting council estate Ms Ahmed? No, thought not. Heygate was ill-designed and poorly built, was a rotten eysore for decades and the vast majority tenants were only too delighted to leave. Surprise surprise the director of the Twentieth Century Society wants to keep another rotting council estate standing without a thought for the prospects of the future tenants. Whats the bet that she lives in nice Edwardian semi in Musswell Hill?

    The question is Ms Ahmed whats your alternative? Just leave the Heygate standing with no prospect whatsoever of sufficient public money even to keep it well maintained? Or perhaps you propose a 1000 new council homes for rent? I suppose the tooth fairy is going to stump up the money?

    Yes, the scheme is worse now than the original proposals. There are two causes of that, the first is the unbelievably stupid decision by the Labour Council of 2000 to reject the Bradman proposals (against officers advice) and watch Bradman walk away, and, secondly, the dramatic reduction in public subsidy to affordable housing, a reduction which Simon Hughes, now crying crocodile tears over the loss of affordable housing, voted for. The only possible way that the Elephant and Castle will be regenerated is by enabling the increase in land value to be released, yes, Lend Lease will make profit, its called capitalism, and short of the revolution that is how new urban assets get created. Presumably you would have stopped London's railways being built because they destroyed existing housing? Sure, I would love to see each and every council home demolished replaced with a new better one, but the tooth fairy is not a reliable source of revenue.

    The price that LL paid for the land is largely irrelevant, effectively the public subsidy comes from the land value, the more LL pay for the land the less the land value subsidy. (Whether or not the council got best value for the land is another question entirely.) And given, according to you, the bulk of the money went on buying out the RTB leaseholder, you would have been happy to see the leaseholders forced out without a penny? On the other hand not, as you seem to think the poor old leaseholders faced with a CPO, were hard done by? The leaseholders got their flats with a 70% public subsidy, so they are making a very tidy profit on the current market value. Profiting from the sale of public assets is ok for the leaseholders but not for the corporation that is actually going to make something happen and without whom nothing will happen?

    Finally you cant even get the few meagre facts in your piece to stack up. 300 trees are not being lost and they are not oaks.

  • 29 July 2013 at 10:11am
    Guernican says:
    And, of course, this cuts both ways. In an area where surgeries and nurseries are stretched to the limit, Waltham Forest Council waves through a development of 125 homes, even changing the meeting and consultation time to stop protesting residents from having their say.

  • 31 July 2013 at 11:45pm
    Harry Stopes says:
    I'm glad we have an arborealist here to correct the error about tree number and type.

    In the mean time, how on earth is selling 1200 social housing units and 9 hectares of Zone 1 land for a net £6m plus 79 social housing units, anything other than a total disaster and a dereliction of the council's duty to care for the poorest in the borough?

  • 2 August 2013 at 10:08am
    Stewart says:
    Maybe it is something other than a dereliction of duty:

  • 3 August 2013 at 7:04pm
    Muhammad Haque says:
    Your main blog item about what has been going on in Southwark contains enough evidential points about the state of lawlessness that local Councils have been operating for some time in London. Democratic audit and accountability keep coming up as the factors that
    are absent from the conduct of those who control the Council at a given period and from those who happen to be on the alleged opposition side/s.
    In the case of the London Borough of Tower Hamlets Council, the role of the planning
    bureaucracy has been to let in a variety of developers who only vary in terms of the sizes of their projects. The ideology, the plan, is almost without any exception the same: to speculate, to build and to deny. To speculate on the property and the land values that they can profit from and to build at the expense of the local people and their needs and to deny any and all of the needs that sued to be called social responsibility and remit. What you have highlighted about the behaviour of “all” political parties could be stated about the “different” political Parties that now constitute the elected Tower Hamlets Council.
    This is not a scandal. Nor is it just a disaster. What is happening is an all out attack on all things democratic and a wasteland of democratic denial is being imposed across London
    with no evidence that any “Political Party” cares for democracy at local levels at all.
    If they did, there is no sign of that in anything that could be found in the minutes, in the proceedings of the Council. With this destruction of democracy, the very demography of London is being seriously altered!
    This is a major assault on Society and it is taking place with the participation of all three “main” Political Parties who are using their local and regional Party bureaucratise to collude in it.
    All the known statutes and conventions for a democratic accountable local community via the elected local councils are being teated with de facto contempt.
    There is nothing like a half-active campaigning local press in these areas any more!
    The casualties of the local London councils being used as stooge outfits for the assault are individuals, families and communities who are not, on current evidence, being shown any recognition by the traders in local electoral democracy which is democratic only to the extent that it confers on the careerists the ticket to gain entry into the local Council and its various lucrative facilities that can be used as means of making money, directly, indirectly and potentially while relegating the voters, the communities to a notion & status of non-entities!
    The Agenda that has been pushed via the local controlling units of the main Political Parties is manifestly an extension of what all the antidemocratic conglomerates have wanted for decades. They created a new City on the former Isle of Dogs in Tower Hamlets starting with the Canary Wharf which project is now spreading steadily to take over the rest of what land and spaces remain in Tower Hamlets.
    In Stratford in Newham, the main Stratford High Street is deserted because local people from Newham cannot afford to do anything economic or social in the concrete alienation that has been imposed there.
    Along the west of Tower Hamlets and the south west of Hackney, the physical, concrete take over and degeneration is happening so fast that it would require an entire country to put a stop to the comprehensive assault.
    In fact local communities are being systematically deported out of their home areas!
    The role of Boris Johnson is a continuation of the role the Big Business forces had assigned to the two terms of Ken Livingstone as the occupant at the Onion near the Tower.
    In fact one of the new towers, the Heron Tower on Bishopsgate that is now a physical reality, had been at the centre of a decision by the man behind it, Gerald Ronson, one of the Guinness Three, to make an astonishing connection with Ken Livingstone in the shape of donation, reported by the SUNDAY TIMES, to one of Ken Livingstone's past election campaigns.
    Campaigners opposing the Crossrail alignment that had been plotted to run through Brick Lane thus destroying the Community and small businesses that had been formed over the last Century, found out the link with the Heron Tower. That alignment was altered to make sure that the as yet only planned Heron Tower site would not be affected by the Crossrail route which was shifted away from the site and foisted on areas that contained Brick Lane and the adjoining neighbourhoods.
    And the local Tower Hamlets Council was found to be engaged in a PR campaign that was aiding the Agenda of the City and suggesting that “Crossrail wold bring great benefits to the East End”!
    The first benefit has been for Crossrail to cause TfL to close down the Whitechapel Underground Ticket Office.
    The deportation of democracy is happening not just in Southwark and the people of the Heygate estate bit far more ferociously over on the north bank of the rive Thames.
    Local Councils are being put to use by Big Business as complicit colluders!

    1900 Hrs GMT London Saturday 03 August 2013