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Gov report finds council ‘failed’ for years to monitor developers on broken promises to provide social housing

Southwark Council has for years failed to monitor whether developers have provided the social housing they promised, a government report has said.

It follows startling revelations from pressure group, the 35% Campaign, who say they have discovered that Southwark has hundreds of “missing” social homes that were instead being rented at higher prices.

The council has now vowed to start monitoring social housing provision in response to the damning report produced by a local government ombudsman on November 30.

The ombudsman reported that Southwark has “failed” to monitor whether big property developers, and even housing associations, have lived up to promises to provide social housing. Such promises to provide social housing (rented at roughly 20 per cent of market prices) typically form the basis for whether councillors decide to give housing schemes planning permission.

The report states that Southwark historically “had no procedure” for supervising compliance with Section 106 agreements: a point of law councils use to bargain with developers to build social-rent homes in return for planning permission.

The council instead depended on companies and housing associations “volunteering” to provide the social housing, which in dozens of cases they were not, the ombudsman found.

The 35% Campaign, who called on the ombudsman to intervene, say this flaw has let property firms off the hook for years. And because of the council’s inaction over 106 agreements, the ombudsman said Southwark “does not know if developers provided all the social housing units intended under the agreements”.

“[This] may act as encouragement for unscrupulous developers to agree to something they do not intend to provide, knowing nothing would happen,” the ombudsman said.

Following the 35% Campaign’s efforts, and the local government ombudsman’s findings, Southwark has said it will now “conduct an annual audit of all housing in the borough, as secured by a section 106 agreements”. The council say the purpose of the audits will be to “maintain the agreed stock and to guard against any… reclassification of units”.

It will invest £60,000 per year into carrying out the audits, with results published every year.

The ombudsman reported it hopes the council will be able to complete its first one-year audit “into 2017”.

Under current legislation, councils have the power to legally force housing associations and developers to live up to their promises to provide social housing.

“The council may seek a court injunction if the developer or subsequent owner fails to comply with its duty,” the ombudsman said. “This is a discretionary power so it may not always follow that a failure will lead to action.”

Councillor Mark Williams
Councillor Mark Williams

While the council agreed to begin carrying out annual audits, it refused to address the 35% Campaign’s suggestion that a ten-year audit of 106 agreements was needed. It declined to comment on this point when approached by the News.

With regards to the ombudsman’s findings, councillor Mark Williams, cabinet member for regeneration and new homes, said: “We recently met with [The 35% Campaign] who raised concerns that some of the affordable homes secured by us from developers through the planning process may not have been delivered. We agreed to carry out a full audit of all homes built in our borough to make sure that these affordable homes have been delivered and this is underway.

“We welcome the Ombudsman’s report which recognises the steps we have taken to tighten up our processes. More affordable homes are desperately needed by our residents, which is why we take any such breaches extremely seriously and will take legal action.”

Years of investigations by the 35% Campaign found 44 examples of housing schemes, throughout the borough, where fewer social-rent homes were being provided than was promised.

Former Heygate estate resident Jerry Flynn, who co-manages the 35% Campaign, told the News: “We are very pleased with the outcome of this.

“It’s a serious problem. The ombudsman points out that without systematic monitoring, there was no way of knowing how many social homes were really missing.

“Having annual auditing is good, but we are asking Southwark to carry out an historic audit going back ten years. That way we will found out how many homes have really been lost.

“For the council to commit £60,000 per year will be enough to hire to people to work on this, but they could invest a lot more considering the return they would get with all the social housing.”

Read editor’s comment here.


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