Jun 292017

Last weekend Alan Strickland wrote an unsolicited letter to Labour party members, giving the cabinet's version of why they are imposing the HDV upon the people of Haringey against their wishes.

The day before, the council released over 1400 pages of documents relating to the HDV for Cabinet members to read in just a week. 

This is the StopHDV campaign's response to Alan Stricklands letter.

If you like this response, please add a comment or like on our StopHDV Facebook page. Please also share with others.


Why We Oppose the HDV

1 Political Context

The Council’s insistence on pressing ahead with HDV completely ignores the changed political context of Brexit and the General Election results. The Grenfell Tower fire and its aftermath highlighting unsafe housing practices, alone should provide more than enough reason to pause and re-examine this enormous scheme. The Labour Party fought the GE on a manifesto that included a commitment to build 500,000 new council homes.

Both Tottenham and Hornsey and Wood Green CLPs have opposed the establishment of an HDV. Both constituency MPs have opposed the HDV, the Overview and Scrutiny Committee of the Council has approved two highly critical reports from the Housing Scrutiny Committee about the proposed HDV. Despite this the Cabinet is intent on handing over £2b worth (2015 estimate) of Council property to a development vehicle in which the Council will have only a 50 per cent stake. Their partner in the HDV is Lend Lease, a multi-national company that recently paid $56m in fines and restitution in what has been described as ‘the largest construction-fraud settlement in New York City history’. It has also been implicated in union black-listing and in 2015 for fitting non-compliant cladding and faulty plumbing in two separate hospitals in Australia.

2 Governance, Scrutiny and Accountability

The business plan underpinning the procurement process and the establishment of the HDV was published in 2015. The assumptions it was based on are entirely out of date (and at the time they were skewed to support an overarching joint venture rather than provide a fair analysis of other approaches). The Equality Impact Assessment (EQIA) which accompanied it was a travesty and was recycled in Feb 2017 when the Cabinet approved going ahead with Lend Lease. The Cabinet papers run to over 1400 pages and were published one week before the meeting. The appendices include information which needs time to review and evaluate, which given the size of the documentation will hardly allow for a thorough examination, and is unlikely to include any rethinking in the light of the Grenfell Tower disaster and its implications for housing policy, the treatment of council tenants and the economics of schemes based on tall buildings. Many of these appendices have redactions, and some are watermarked ‘draft’ even though they have presumably been worked on for several months. Yet these are the documents on which the Cabinet will decide the future of thousands of homes and hundreds of businesses. We do not even know if the Cabinet members have seen these papers prior to their being despatched this week. There are some fundamental questions here regarding democracy and accountability.

Neither will there be time for a meaningful consideration of the internal and external audit reports. Despite months of scrutiny and requests for documentation, there is still no published detailed risk assessment or due diligence report for the HDV. Despite this, sections of the Council’s entire commercial portfolio will be transferred to the HDV on day one. This will result in a loss of rental income as well as control over property that will cease to belong to the Council. Northumberland Park estate will also be transferred to the HDV in the first tranche of properties.

The HDV includes an exclusivity clause that guarantees some 60% of all work to Lend Lease and its subsidiaries. In effect this means there will be no competitive tendering for this work and guaranteed profits for Lend Lease.

The Cabinet’s response to the latest Overview and Scrutiny Report accepts only 8 of its 30 recommendations. The request for residents’ ballots before going ahead with any regeneration plans has been rejected, as has the recommendation that the Council respond to the Northumberland Park Support Group submission to the Housing Scrutiny Committee.

Freedom of Information requests have ascertained that there has been no consultation on the establishment of the HDV with residents of Northumberland Park or the other affected estates. Under these circumstances how will the interests of local residents be assured?

The formal Scrutiny role of the Council, which has done so much to highlight the shortcomings of the proposals, will not extend to the business of the HDV, which means there will effectively be no public examination of what is going on.

3. The model of regeneration

The Council’s stated aim is to create ‘mixed communities’. From this view point, the way to improve the social outcomes of Northumberland Park is to ‘decant’ the residents of the estate, demolish it and build new homes. The full costs of rehousing tenants will be met by the council and the estates will be handed over to the HDV empty. This in itself will have a negative impact on the Council housing waiting list as there will be a significant loss of council housing.

The Council’s own response to the latest Scrutiny Report states that while they support the idea of mixed-use development ‘based on standards of quality, access and experience that are blind to tenure’, these principles will have to be balanced with other factors such as efficiency of maintenance regimes and affordability of mandatory service charges which can sometimes make separate building cores for different tenures the most effective way to ensure affordability and good housing management.

In addition, the Council does not guarantee that new housing units will only be sold to UK residents or that priority will be given to those with a Haringey connection, leaving the possibility of large numbers of units being sold off-plan to overseas investors, as has been the case in Lend Lease's development at the Elephant and Castle with some parts bought exclusively by overseas investors, who have been encouraged to buy flats where previously council tenants had lived. On the Heygate Estate, which formed part of this development, 1,200 council homes were demolished and replaced by 2,469 new homes – 25% were ‘affordable’ but only 80 were social homes, while on the nearby Aylesbury Estate 2,759 council homes were demolished and replaced by 4200 new units including 1,525 social homes – half of which were for sale and half offered on a variety of ‘affordable’ rents. The pattern is stark – the redevelopment of Elephant and Castle by Lend Lease has resulted in a large loss of council and social housing, while housing density has gone up. See also the Balfron Tower regeneration scheme in Tower Hamlets which bears some similarity in its business model to the HDV.

Despite all the assurances from Claire Kober and Alan Strickland, the HDV will result in a net loss of council housing as it is demolished to be replaced by tall towers. It is also very likely that there will be a net loss of social housing, and that the ‘affordable’ housing element will also be significantly less than the target 40 per cent. So while the glossy brochures produced by the Council depict a greener, cleaner environment in north Tottenham the very obvious question arises – who is this for?

An alternative

Given the election result we are likely to face a new election in the near future and the possibility of a Labour Government that will build new council homes. Under these circumstances to transfer £2b of Council property, where, for example, the businesses will be on 250 year leases into an HDV that will run for at least 20 years seems extremely foolhardy. There is widespread opposition to this across the Labour movement and the wider community in Haringey. Tenants have not been consulted about what the HDV will mean for them and there will be a lack of effective accountability and scrutiny of its actions. The Council has a poor record of keeping deals with the private sector on track – most notably the Spurs deal where they received no S106 money and no new social housing was built despite initial assurances that this would be the case. Alan Strickland claims that the Council will be ‘in the driving seat’ as they ‘motor ahead’, but it is difficult to see how this will be the case when they have effectively given half the vehicle away to a multi-national whose well documented reputation for hard-nosed deals does not inspire confidence.

Instead, we argue that Council assets should remain in Council ownership and that smaller scale housing projects and estate regeneration that puts the local community and residents at their heart are the way to provide a more prosperous and secure future for all Haringey’s residents. Other councils have successfully established wholly-owned development vehicles to build new homes, why doesn’t Haringey?

There is a housing crisis in Haringey but the HDV is not going to solve this crisis; if anything it will make it worse.