Heygate Scandal - Call for an investigation

[Earl Aelfheah]

Southwark council sold the Heygate Estate for ?55m to private developer Lend lease. The cost of evicting tenants from the Heygate is set to be in the region of ?65m - meaning the sale (on our behalf) of a 22 acre site, has actually led to around a ?10m loss.

Lend Lease meanwhile, are expected to make around ?194m profit from the deal.

A number of former council officers involved in the negotiations with developer Lend Lease and are now full-time employees of Lend Lease.

Please join (and share) the campaign for an investigation into allegations of governance failure, poor financial management and potential fraud at the London Borough of Southwark: https://www.change.org/p/heygate-estate-scandal-demand-an-investigation?recruiter=152746700&utm_campaign=mailto_link&utm_medium=email&utm_source=share_petition

[holloway]

This was in 'Private Eye' magazine's rotten borough section last month. A monuemental scam.

[Otta]

I posted this in the lounge, but if anyone is interested in this absolute scandal (scandal either because someone has done something dodgy, or because someone is UNBELIEVABLY incompetent) then this is an interesting read.

http://www.newstatesman.com/politics/2013/11/look-heygate-estate-whats-wrong-londons-housing

Thanks for starting the petition rahrahrah, I should have thought of that when I first saw that article a few months back.

[Loz]

One of the comments under that article says:

Also, my understanding is that Southwark Council is on some kind of profit split. I mean, that's the explanation they've used for the low sale price.

Does anyone know if that has any basis in fact?

[buddug]

Reading about Our Own Dear Leader Peter John's jollies courtesy of Lend Lease was shocking. I await the outcome of the current investigation into that.

[DollyDee]

Thank you for sharing this rahrahrah. Shocking. Signed petition.

[Otta]

Loz Wrote:

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> One of the comments under that article says:

>

> Also, my understanding is that Southwark Council

> is on some kind of profit split. I mean, that's

> the explanation they've used for the low sale

> price.

>

> Does anyone know if that has any basis in fact?

From what I can tell, the developers are gaurateede the first ?194m profit, and Southwark get a slice of anyhing over that. They're basically saying that what with the ever climbing prices in London, they're bound to do well out of it.

So this council rather than wanting lower prices, is totally relying on higher prices in order to make some cash. It's total utter bullshit.

[Longshanks]

Signed- not good enough Southwark Council

[PokerTime]

I'll forward your petition to some local housing campaign groups rahrah.

I could write an essay on the Heygate debacle. There are many problems in both process, legislation, and the experience of the people doing the bidding that have led to the end result. But understanding how all of that came together is something that needs to be investigated.

One thing I would say is this. I have long argued that it would be worth local authorities employing specialists in contract negotiation (in whatever field is needed). Lend Lease is a multinational company, expert in negotating the best deals for them and their investors. The Heygate development had cross party support, but somewhere along the way, the council lost control over the deal. A change of governement did bring about a change of rules, which also hampered the council's ability to shape the deal done. It's what happens when the ability of Local Authorities to borrow for Capital Projects is taken away and Private Public Partnership is pushed. Whilst we continue to have a mantra that home building and regeneration should be funded by private developers with sweetener deals in return for % of affordable housing, there is going to be a repeat of the Heygate elsewhere. Hackney is another borough that has lost social housing to private developer profiteering, under the myth of regeneration.

It is also worth pointing out though that some of those prominent councillors in office at the time the process of sale started, and some of whom now work for Lend Lease, also had the opinion that poor people shouldn't live so close to the center of London. So I would question the commitment to affordable housing of those people too.

[Otta]

PokerTime Wrote:

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> One thing I would say is this. I have long argued

> that it would be worth local authorities employing

> specialists in contract negotiation (in whatever

> field is needed).

^^^^^ THIS x 100!

[grabot]

Having seen the destruction that narcissistic individuals can unleash in an organisation, in my experience they are perfectly capable of bypassing process in order to gain some small advantage. I think that HR have a role to play in identifying rogue individuals. But, that would require a change in focus. Beyond that, how do you stop bad greedy people in any walk of life? Is that not the perennial question?

[Otta]

Fair point, but pokertimes suggestion of contract managers would be a good start. I've seen loads of examples of LA's being shafted by providers (sometimes from within other parts of the same authority) because contracts and SLAs are drawn up by people with no experience, and then these contracts roll on unmonitored so nothing gets picked up on.

[grabot]

The problem then is, and you find me at my most cynical, that the people brought in to guard against abuse are equally if not more likely to abuse the system themselves. In any event individual responsibility is diffused.

[Salsaboy]

So who watches the watchers?

grabot Wrote:

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> The problem then is, and you find me at my most

> cynical, that the people brought in to guard

> against abuse are equally if not more likely to

> abuse the system themselves.

[grabot]

Indeed. Take Haberdashers', they employ an accountant to ensure good financial control and look what happens. How many bank frauds originate from the compliance department? I sometimes suspect that the watchers become watchers because they can perceive the threat within themselves. My general philosophy. Most people are good. Most people will do good things. A small minority will do bad things. You can probably stop a lot of it happening, but there has to be a balance it in terms of the cost of watching them and the risk that the watchers will in turn, turn out to be bad people. Beyond that, in any human endeavor I am afraid that there is always going to be some level of waste and corruption. But, we get by pretty well all the same.

[Earl Aelfheah]

Thanks for highlighting the issue on the forum Otta. The petition has over 150 signatures already, which is great. I encourage anyone who hasn't already to sign and also share with others if you can.

[Otta]

Indeed, I shared it on facebook yesterday evening. When I signed I was around number 25, and it's now at 152 (as of a couple of minutes ago), so doing nicely.

Oooo, just looked again and now at 156, so climbing steadily.

[Earl Aelfheah]

An article in today's Guardian about just this subject... http://www.theguardian.com/cities/2014/sep/17/truth-property-developers-builders-exploit-planning-cities

[Loz]

rahrahrah Wrote:

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> An article in today's Guardian about just this subject...

Somewhere in that mess of over-emotional rhetoric is a decent article struggling to get out. Example:

We are replacing homes with investment units, to be sold overseas and never inhabited, substituting community for vacancy. The more we build, the more our cities are emptied, producing dead swathes of zombie town where the lights might never even be switched on.

It sounds like a BNP immigration scare story, rewritten for property.

[katanita]

Signed. Have been following this story for a while. I was taken for a quite weirdly magical tour around the estate when there were only a few people left in there. Given that the housing deal was done, the main campaign at that point was to save all the trees, which, in a lesser scandal, had also been massively undervalued by the council and were about to be chopped down. I understand (hope) they've at least partly won that battle (more here http://elephantandcastleurbanforest.com/).

Part of this is around affordable housing quotas, what this really means, and whether this is enforced. How have Lend Lease been allowed to not even meet the minimum 35% quota in this case? I wonder where all the residents who were forced out have now ended up. It's shameful.

[Earl Aelfheah]

As of 4 O'clock, there are over 300 signatures.

[Loz]

katanita Wrote:

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> Part of this is around affordable housing quotas, what this really means, and whether this is

> enforced. How have Lend Lease been allowed to not even meet the minimum 35% quota in this case? I

> wonder where all the residents who were forced out have now ended up. It's shameful.

The shameful bit is the pitiful amounts Southwark are offering for compulsory acquisition of the flats. Some 1 bed flats have been 'valued' at as little as ?70k. These people need to be compensated with market rate as an absolute minimum, so they can at least buy something somewhere else.

[LondonMix]

Everything about this stinks.

* the low compulsary purchase price for the flats

* the poor deal for tax-payers selling off assets

* the apparent desire to get rid of poor people from central London

The list goes on... The hints at possible corruption / job in exchange for a sweet deal with Lend lease though is the cherry on top. Just pathetic...

[Otta]

I liked this bit of that article.

"Lend Lease, in a defence that verged on farce, pleaded the human right to ?peaceful enjoyment of its possessions?, arguing that disclosing the viability assessment would amount to ?unjustified interference with this enjoyment?

Poor lambs, having their human rights abused. Unbelievable.

[PokerTime]

Unvelievable indeed Otta. Basically they are being allowed to acquire prime land, central to London, formerly holding council housing, for ridiculously low cost. Shoreditch is another place where council property is being cleared for sale to luxury property developers. And Shoreditch is significant, as it was home to the first ever Local Authority housing.

For the developers, the intention is simply profit. For the LAs selling this land, the intention is to absolve themselves of regeneration and maintenance costs. For the tenants and communities dispersed further out, it's social cleansing. Government does play a role in this, because it's government that lays down the rules for sell offs. If you have a government that thinks poor people shouldn't live in centralish London, this is what you get. Similarly, if you have a government that continues the sell off of council homes (as New Labour did) whilst not building enough new homes, this is what you get.

The reason why I made the point about LAs hiring specialist contract negotiators is exactly because of the imbalance of experience between multi-national developer, and the local council and it's workers. In my experience, councils are full of staff in positions they are not qualified to do well. And when they do a poor job, they are simply rotated to another department. It's impossible to fire anyone.

The statesmen article is spot on in that it's the process that at fault, the way these things are done. It's that process that needs to be investigated (rather than the individuals involved). Personel change (especially councillors and council staff), but mechanisms don't. Huge areas of recently developed land are already ghost towns. Homes that are seemingly never occupied. No children playing on the pavements below. They were never designed for families or communities, but foreign investors, and high flying professionals. If that's what we want London to be, then keep going as we are.