Ever since our decision earlier this summer to join London’s “Radical Housing Network” we’ve had frequent briefings on issues arising elsewhere in London, and on the activities of other local action groups like our own. The latest of these little titbits that’s come our way concerns an online petition started recently by a Southwark resident calling on Eric Pickles, the Secretary of State for Communities and Local government, to investigate allegations of governance failure, poor financial management and potential fraud at the London Borough of Southwark, relating to the sale of the Heygate Estate.
According to the petition the redevelopment of the former Heygate Estate has displaced residents and led to financial losses for the taxpayer.
The petition provides an assortment of interesting estimates of the finances involved in the sale, which illustrate the scale of mismanagement by Southwark council:
- Price paid by Lend Lease for 22-acre Heygate Estate site: £55m
- Price paid for nearby Oakmayne/Tribeca Square 1.5-acre site: £40m
- Expected total cost to Southwark Council for evicting residents: £65.5m
- Previous estimate of cost to refurbish Heygate Estate to modern standard: £35m
- Expected profit from sales for Lend Lease: £194m
- Expected profit from sales for Southwark Council: £0
- Average compensation given to leaseholders of one bedroom flat: £95,480
- Average compensation given to leaseholders of four bedroom flats: £177,421
- Lowest price unit in new development (one bedroom flat): £310,000
- Number of social-rented units in Heygate Estate: 1,200
- Number of social-rented units in new development: 79
[Source: New Statesman]
Several former council workers involved in the negotiations with the private developer (Lend Lease) are now working for that developer. Details of this ‘revolving door’ are also outlined in the petition which calls on The Secretary of State to appoint inspectors to look into allegations of governance failure, poor financial management and potential fraud in relation to the redevelopment of the Heygate Estate.