Agenda and minutes

Venue: 110 Union Road (Springfield Community and Health Centre), London, SW8 2SH

Contact: David Rose, Tel: 020 7926 1037, Email:  drose@lambeth.gov.uk 

Items
No. Item

1.

Declaration of Pecuniary Interests

    Under Standing Order 4.4, where any councillor has a Disclosable Pecuniary Interest (as defined in the Members’ Code of Conduct (para. 4)) in any matter to be considered at a meeting of the Council, a committee, sub-committee or joint committee, they must withdraw from the meeting room during the whole of the consideration of that matter and must not participate in any vote on that matter unless a dispensation has been obtained from the Monitoring Officer.

     

     

    Minutes:

    There were none.

     

     

2.

Investing in better neighbourhoods and building the homes we need to house the people of Lambeth - Cressingham Gardens Estate: Call-In pdf icon PDF 115 KB

    Tulse Hill ward

    Report No: 16-17/229

     

    Report author: Gary O’Key, Lead Scrutiny Officer; 020 7926 2183, gokey@lambeth.gov.uk

    Additional documents:

    Minutes:

    The Chair commenced the meeting and all present introduced themselves, noting Councillor Diana Morris replacing Councillor David Amos. The agenda pack, page 17, detailed the three main reasons for the call-in: 1) due diligence of financial information by the Council; 2) proper consideration of The People’s Plan (TPP), and 3) the potential removal of key rights and guarantees. The Chair outlined the call-in process and invited Councillor Scott Ainslie to set out the reasons for call-in:

    ·           The first consultation ended with the Council’s defeat at High Court, and he urged an appropriate level of caution when re-evaluating this decision.

    ·           Judge Laing had ruled that the unaffordability of option 5 (full demolition and regeneration) was not backed up by evidence, whilst the consultation itself was flawed.

    ·           Judge Laing’s judgment had been omitted from the Cabinet agenda pack for 21 March, when the decision was taken.

    ·           The last call-in had highlighted the lack of learning from the consultation, but these warnings had not been heeded.

    ·           It was not possible to refute all the desired points in five minutes but residents had produced a response to the officers’ response report in the pack, and this had been supplied to Overview and Scrutiny (OSC) members.

    ·           The Housing Revenue Account (HRA), as detailed in the agenda pack’s link (second dispatch, page 10), showed remaining reserves which made refurbishment affordable.

    ·           The £7.5m loan from Lambeth to the Special Purpose Vehicle (SPV) had been entered as grant income for full redevelopment and this amounted to false accounting.

    ·           When the £7.5m was classed as a loan or removed from calculations it rendered a negative net present value (NPV) result. 

    ·           On paragraph 2.5 of Appendix B, officers stated that they had considered and ruled out TPP on the grounds of unviability yet no financial or technical expert reports were provided in evidence of this claim.

    ·           Residents were not given enough time during the revised consultation, even though officers’ call-in responses said otherwise.  There was only a 20 hour window for residents to review financial documents, which was not enough time for such complex information to be absorbed and responded to.  It was asked whether this was fair on or acceptable for residents, particularly since the key argument justifying redevelopment was around financial viability.

     

    The Chair reiterated that the call-in dealt with three main areas: the proper due diligence of financial data; proper consideration of the People’s Plan; and, the unfair impact on the residents of Cressingham Gardens.  Residents: Chin Ong, Andrew Plant, Mariana Nwagboso, and Gerlinde Gniewosz; and Simon Elmer from Architects for Social Housing, made the following representations:

    ·           The residents’ response to officers’ response to the call-in and TPP had the backing of the majority of CGE residents, although they had not been signed by parties.

    ·           The People’s Plan was devised from 100 feedback forms from residents, numerous outdoor sessions with residents, working with technical experts, and having raised funding independently.

    ·           A survey of residents which was conducted last year had a 72% response rate, with 86% of  ...  view the full minutes text for item 2.

3.

Investing in better neighbourhoods and building the homes we need to house the people of Lambeth - Cressingham Gardens Estate: Response to Call-In pdf icon PDF 585 KB

    Tulse Hill ward

    Report No 16-17/230

     

    Report author: Neil Vokes, Assistant Director, Housing Regeneration; 020 7926 3068,  nvokes@lambeth.gov.uk

     

    Minutes:

    The Chair next invited members of the Committee to ask questions of the Cabinet Member and officers on the three main issues outlined, noting the answers already present in the agenda packs. The Cabinet Member for Housing, Councillor Matthew Bennett; Sue Foster, Strategic Director Neighbourhoods & Growth; Rachel Sharpe, Director Strategic Housing, Regeneration and Communities; Neil Vokes, Assistant Director Housing Regeneration; and, Julian Hart, Estate Regeneration Programme Manager responded as follows:

    ·           The HRA business plan linked to in the report was over 30 years and showed the capacity to borrow was declining as Central Government brought in a 4 year rent reduction or a loss of £80m from the HRA budget, and this was reflected in the declining ability to borrow, with a £190m deficit forecast by the end of the HRA business plan.  As highlighted by residents, if there were no changes made, this would go into deficit in four years’ time.

    ·           When the consultation was started in 2012, there was a £50m shortfall in the Lambeth Housing Standard budget, which now stood as a £85m deficit.  This figure was yet to take into account uncertainty from the Housing and Planning Bill which would further reduce revenue and future borrowing.  It was therefore untrue to say that spare borrowing capacity existed.

    ·           At this stage, NPVs were modelled along pessimistic industry assumptions or worst case scenarios, so the Council were confident that these could have decisions based on them.  This confidence was needed to move forward with masterplanning and design work and this would lead to more detailed business cases as has already happened with Somerleyton Road, and this would then be brought back to Cabinet.

    ·           It was false to claim that the SPV was a front for Savills, gentrification, or that it was out of the Council’s control.  HFL would be entirely Council-owned and controlled, and Savills had only been appointed to register one of the HFL subsidiaries as a housing association to allow the Council to deliver new homes. 

    ·           The involvement of Savills was to set up the SPV during the initial technical processes and their involvement then ended.  HFL was a means to an end, as the Council wanted to build homes, but could not do that without an SPV; and other London boroughs were also following this method.  Officers confirmed that it would have been simpler to do this through the HRA, but this was not possible.

    ·           HFL was set up as not for profit, but for certainty a positive NPV was required so that the Council knew proposals were affordable.  Any surplus would be recycled back into delivering more homes at Council rent.

    ·           The Council could deliver homes by partnering with private developers or housing associations (such as with Southwark in Heygate) or by its own SPV so the Council was the developer.  In aiming to provide homes across the income spectrum and to ensure social housing provision this last option was chosen.

    ·           The £7.5m grant figure in the financial model was used to fund costs  ...  view the full minutes text for item 3.