35% Campaign update – Southernwood Retail Park

Southernwood Retail Park

May 27, 2019 12:00 am

Third of big four Old Kent Rd developments goes to committee

A proposal for the development of Southernwood Retail Park is due to be decided at Southwark’s planning committee this Tuesday evening. Developer Glasgow City Council, acting as trustees for its (Strathclyde) Pension Fund, wants permission for a mixed-use development of 725 residential units, with a hotel, cinema, shops, restaurants and offices. The proposed scheme has seven blocks, including a 48-storey tower. The site is currently occupied by Argos and Sports Direct, just opposite Tesco and over the road from Burgess Park.

Southernwood offers, in round figures, 35% affordable housing; 25% of the total housing will be social rent, 10% intermediate, in line with the emerging New Southwark Plan’sminimum requirements, giving 219 units.

Viability conundrum

Viability assessments have become notorious as a way for developers to avoid their affordable housing obligations. Over the past few years housing campaigners and several high profile cases have managed to shed some light on this practice, leading to changes in policy and greater scrutiny of developer’s viability claims.

In Southwark this had meant we are starting to get the 35% affordable housing that we have been denied until now. But while developers are offering 35% affordable housing, they continue to insist that their schemes are unviable. Southernwood Retail Park is a case in point. Here the developer (Glasgow City Council) claims that they will only make 2.24% (£8.4m) profit on Gross Development Value (GDV); Southwark’s consultants beg to differ and say 16.37% (£62.5m) can be made. Both figures fall short of Glasgow CC’s profit target (set by themselves) of 18.84% (£72m), so the development is technically deemed ‘unviable’.

Glasgow CC’s 18.84% target profit exceeds its benchmark return of 10.4% set by its pension fund manager for real estate projects (DTZ), who manage Southernwood on its behalf (See DTZ, pg 97 in Strathclyde Pension Fund’s most recent annual report).

Despite the Southernwood scheme being deemed ‘unviable’, Glasgow CC says that it will deliver 35% affordable housing, comprising 25% social rent and 10% intermediate, in line with minimum local policy requirements. The Council’s planning report accepts the 35% affordable offer, but without addressing the difference in the profit estimates or considering the difference in the profit target and the pension fund’s DTZ target benchmark.

After so many major developments at the Elephant & Castle and elsewhere in Southwarkhave been allowed to flout affordable housing requirements, this can be counted as progress, but leaves the true viability of the Southernwood scheme unresolved. This is important, because as well as all the minimum affordable housing requirements, there is also a general requirement to produce the maximum reasonable amount of affordable housing, which obviously cannot be known, unless the real viability position is known. There is also the danger that the development proves to be ‘undeliverable’ and the developer returns to get the promised affordable housing reduced.

The Southernwood scheme joins Ruby Triangle and Cantium Retail Park as an ‘unviable’ scheme that will deliver 35% affordable housing. Unlike Ruby Triangle, but like Cantium Retail Park, no ‘late stage review’ of viability is proposed for Southernwood. This is a comprehensive viability review where developers are required to disclose in detail actual costs and revenue received, to establish the scheme’s real profitability and enable the local authority to ‘claw back’ additional affordable housing, should the profit be greater than anticipated. Given the site’s position alongside the likely site of a new tube station should the Bakerloo line extension be built, this looks like a serious omission.

Affordable housing – 35%, 40% or 50%?

Two other features in the Southernwood application stand out – the first is that the applicant, Glasgow City Council, is reluctant to take advantage of any public funding, such as that available from the Mayor of London, which could raise the affordable housing to at least 40%, giving another 30 or so affordable homes. All schemes are expected to consider this, to maximise affordable housing, under the Mayor’s Housing policy. Glasgow CC’s surprising explanation for not applying for public funding is that it claims it will make the scheme less viable. As related in the planning committee report (Para 182,183), this is because the £28,000 per unit grant (for each of the 250 affordable homes) would not make up the full loss in value of converting 5% of the private market homes into affordable homes. It appears, however, that in reaching this conclusion Glasgow CC have used the highest values of the private flats in the 48-storey tower for comparison, rather than the lower-value private flats in the lower blocks, the difference being £600k per unit versus £500k per unit.

Glasgow CC also say that they will not be in time for the current funding round, which requires a start on site before 31st March 2021, notwithstanding that Phase 1 of the scheme would commence in 2021, to be “open and operational by 2022/23” (Para 44); the report simply proposes a condition that this is reconsidered before the scheme is implemented. The second half of the scheme won’t commence until May 2030 and won’t complete until 2033 (See para 57 of planning committee report).

The second feature is that the site is both owned by a local authority and is in an area marked as a Strategic Industrial Location and on both counts should deliver 50% affordable housing, according to the draft New London Plan, which would raise the number of affordable homes to around 360.

Glasgow CC submitted its own legal opinion on this, arguing that the site should not be considered as public land because it would ” penalise the members of the [Pension] Fund simply for having worked as public servants” (see para 173 of planning committee report). There can be no dispute that the land is owned by Glasgow City Council, on behalf of its pension fund, as land Registry deeds show; nonetheless Southwark and the Greater London Authority (GLA) have accepted Glasgow CC’s argument.

Southwark’s and the Mayor’s decision flies in the face of the Mayor’s planning policy, which has its own specific Guidance Note for determining what constitutes public land – Threshold Approach to Affordable Housing on Public Land (July 2018). This defines it as “Land that is owned or in use by a public sector organisation, or company or organisation in public ownership” (para 9). Anticipating disputes on the definition, the note goes on to say that these “will be determined with reference to the Public Sector Classifications Guide (PSCG) published by the Office for National Statistics and this guide lists Local Government Pension Funds as a public sector body, just as Glasgow CC is a public sector body.

Notwithstanding this Southwark argues in the legal advice appended to the planning committee report that imposing the higher 50% affordable housing “would reduce the capital value of the site and therefore the Fund’s ability to pay pensions to retired workers”and that “It would be unfair on the retired workers if their pension expectation might possibly be impacted..”

It might well be ‘unfair’ to pensioners if this happened, but it would also be ‘unfair’ to those who need affordable housing if it is not delivered when required by policy. It is also unfair on planning committee members who are recommended to approve this scheme without the detailed policy requirements or the alleged ‘impact’ on pensions having been properly explained in the planning report.

As unedifying as it would be to see two local authorities fight over their respective shares of a development’s profit, one on behalf of pensioners, the other, on behalf of those who need affordable housing, Southwark and the GLA’s responsibility in this situation is to vigorously represent the interests of those in housing need and it has not done so, by giving way so easily.

TfL gives scheme (many) red lights

There also appears to be major issues, to say the least, with Transport for London (TfL), particularly around the impact of the development on plans for the proposed Bakerloo Line Extension (BLE). In its latest communication of barely a month ago, in which TfL urges Southwark not to approve the application, except for “the rear portion of the site”, until the Bakerloo Line Extension (BLE) is complete, for fear that it will be compromised.

Extract from TFL’s Objection to the scheme

TfL make the damning accusation that Southwark has ‘no joined-up thinking’, which must sting after several years of consultation and planning for the yet-to-be adopted Old Kent Rd Area Action Plan (AAP) and Opportunity Area.

TfL examine eight aspects of the scheme for policy compliance – Strategic approach, Healthy Streets, Transport Capacity, Transport Assessment, Cycling, Car Parking, Deliveries, Funding – and gives the red light to six (meaning ‘Major changes/redesign required’), with amber for two, including ‘Funding’ (‘Further work required’)’. One of the more radical amendments TfL require for policy compliance is to move the proposed hotel, currently to face onto the Old Kent Rd, but overall TfL consider that it is ‘unlikely that the significant design changes and stringent management measures necessary to make the existing proposals workable can be made to address the issues’ raised.

The planning committee report addresses TfL’s objections at length, over 14 pages (Para 524 – 602). While it acknowledges the critical importance of the BLE to the success of the whole Opportunity Area, much of the remedy the report proposes depend on future agreements between all parties, including rival developers Tesco/Invesco, to be secured by s106 and other legal conditions after consent is granted, when the common-sense response is surely to resolve these problems before consent is given.


Southernwood provides the peculiar spectacle of one public authority building homes on land owned by another, but refusing to apply for public funding, because that would make an ‘unviable’ development more unviable, added to which it is promising to provide affordable housing the figures say the scheme cannot provide.

As noted above, Ruby Triangle and Cantium Retail Park were also both declared technically non-viable and depend upon the rise in land values that the Bakerloo Extension will bring, so should the problems feared by TfL occur, they may well have consequences for their promises of affordable housing too.

The TfL objections to Southernwood also adds weight to the argument that the whole Opportunity Area project is developer-driven, rather than plan-led and that the approval of major developments, such as Southernwood in advance of the adoption of the Area Action Plan is premature and rendering it redundant. Southwark should not be granting permission for a scheme in such a key location beforehand, especially when it is not due complete until 2033 and no late stage viability review is proposed.

Chaucer Ward – Incident in New Zealand

Friday, 15 March, 2019

AS – Central South


Terrorist Attack in New Zealand

Following the horrific events overnight in New Zealand the following message has been released by AC Neil Basu, the National Policing lead for Counter Terrorism:

“We are monitoring events in New Zealand closely and send our condolences to all those affected. Our international network of UK counter terrorism officers will be ready to support our counterparts in New Zealand in responding to and investigating this appalling attack.

“We stand together with all our communities and partners here in the UK and overseas, and will continue to work with them to counter the threat no matter where it comes from. Together with our intelligence partners we continually monitor the varied threats we face, including to and around places of worship and specific communities across the country, to ensure we have the most appropriate protective security measures in place to keep people safe.

“Today we will be stepping up reassurance patrols around mosques and increasing engagement with communities of all faith, giving advice on how people and places can protect themselves.

“Places of worship can also utilise our online training package ‘ACT Awareness eLearning’ for advice on Protective Security and how to react should the worst happen. It can be found at https://www.gov.uk/government/news/act-awareness-elearning. We’d also encourage everyone to be aware of our Run, Hide, Tell advice.

“We take all forms of extremism seriously and anyone with concerns about someone becoming radicalised can get advice and support through the PREVENT programme at http://www.TLAI.info

“We standing together with our Muslim communities and all those shocked and horrified by this terrorist attack in New Zealand.”

We aim to make London the safest global city;

Be the best crime-fighters, by any measure;

Earn the trust and confidence of every community;

Take pride in the quality of our service;

So people love, respect and are proud of London’s Met”

Officers from Central South BCU will be providing extra reassurance patrols at key locations over the course of the day. Doubtless, members of the public will be shocked and very concerned at this terrorist outrage but at the current time we have no information or intelligence to suggest this is anything other than an extremely tragic but isolated incident.

The MPS is committed to making London the safest global city and we continue to take a zero tolerance approach to hate crime. If members of the community have concerns then please contact your local Neighbourhood police teams or in cases of urgency dial 999. We stand together with the community in tackling extremism and hate in all its guises.

Pease do contact my staff office or me if you have any questions or wish to discuss any further aspect of this incident with me.


Simon Messinger

Detective Chief Superintendent

BCU Commander – Central South

35% Campaign update – 2019 – New Year’s Resolutions

2019 – New Year’s Resolutions

Jan 14, 2019 12:00 am

Ten things Southwark Council should do in 2019 -To welcome the New Year and in a spirit of fraternity we have come up with ten actions that Southwark Council can consider taking, in order to ease the effects of the housing crisis and create a fairer future for the borough’s residents.

1. Stop selling off Council homes

Research by the London Tenants Federation shows that Southwark has lost more social housing than any other borough since 2001.

As well as right to buy and estate demolitions, homes are also being lost through the sale of ‘high value’ coumcil homes, through a scheme that was introduced in 2009 by Southwark’s Tory/Lib Dem administration, for vacant council houses valued above £400,000 . In 2011 the scheme was reviewed and the value reduced to £300,000 by the incoming Labour administration.

We don’t know how many council homes have been sold under this policy to date, but this compilation taken from an auction website shows a sample of over 50 properties sold off in this ongoing policy of disposals.

Extracts from a sample of council homes sold by the current Labour administration under this policy

Southwark’s justification for this is that the sales revenue allows more council housing to be built more cheaply elsewhere in the borough, but the cost of building new social rented homes is surprisingly high and can exceed the £300,000 threshold:

Extract from Council report on Kipling estate new builds

Extract from Council report on Pelier estate new builds

As we reported previously the Council is still selling off or knocking down Council homes faster than it is building them.

2. Stop selling off public land and buildings

Southwark’s ‘modernisation’ drive has also seen it sell off public buildings and land including both Bermondsey and Peckham Town Halls; Harper Rd Social Services Centre; Castle Day Centre; Whitstable Day Nursery; Abbey St Children’s Home; Willowbrook Community Centre and the Wansey St Homeless Hostel.

Land sold includes a plot near Millwall stadium and Southwark’s former car pound off the Old Kent Road, likewise a plot of land at Devonshire Grove and a plot of land on the Beacon House estate and one at Woods Road in Peckham.

These sales no doubt raise funds, but The Mayor’s new draft London Plan introduces a requirement that 50% of new housing developments on public land should be affordableso whatever immediate gains these sales bring, the imperative should be retaining as much land in public ownership as possible, to take full advantage of this change.

3. No more approvals like this…

If Southwark is serious about fulfilling its manifesto promise to build 11000 council homes there must be no more approvals of developments like Braganza St, on the site of the council’s former enterprise workshops in Kennington and one of 20 sites in Southwark’s Regeneration Partnership Programme (SRRP), its flagship council house delivery programme. Despite the consultation process for this site promising 55% council homes, planning permission was granted last year for 33 new homes, 28 of which private, 5 intermediate and none social rent or council housing.

4. Stop granting planning permission for schemes that don’t comply with planning policy requirements

Our research into major developments approved in Southwark over the past 10 years has shown that out of a total of 11,863 new homes given planning consent, just 456 (3.8%) were social rented tenure. Had Southwark stood firm and forced these schemes to comply with minimum policy requirements then 2,500 social rented homes would have been approved in total.

5. Stop buying S106 homes from developers

We have blogged previously about the council buying affordable housing from developers to help deliver on its failing manifesto pledge. The problem with this method of buying council housing is that it does not actually increase the net supply of social housing – the same units would otherwise have been bought and let by a housing association anyway. Further, Southwark is denying itself the benefit of the S106 contribution, by paying for something a housing association would have paid for – and, rather perversely, denying itself funds for building units that would actually increase the net supply.

6. Start monitoring and enforcing tenure requirements of Section 106 agreements

In May 2015 we discovered that Notting Hill Housing association had provided affordable rent (up to 80% market) as part of its Bermondsey Spa Regeneration scheme. Following this we discovered 43 further schemes where raised a similiar concern. After the Council dismissed our complaint we referred it to the Ombudsman who concluded that the Council “did not have a systematic supervision procedure to check compliance” with the tenure provision requirements of its section 106 agreements. Instead “it relied on developers’ voluntary compliance.” The Ombudsman ordered Southwark to conduct an audit of S106 tenure provision and introduce monitoring/compliance procedures.

The Council initially promised that first 1 year audit would be published in 2017. It didn’t happen. It later explained that the audit was taking time because it was going back to 2010 and promised that it would be completed in Spring 2018. Nearly three years have now passed since the Ombudsman decision and while the chair of the planning committee has promised to look into it, we are yet to see or hear anything of the audit.

7. Make development partnership agreements public

Southwark has made an often repeated committment to transparent viability assessments. This transparency should be extended to all development related documents, including development partnership agreements with private developers. These contain the same categories of information as viability assessments and determine the public benefits a scheme will deliver.

Last October we requested a copy of the Council’s partnership agreement with British Land for the gargantuan Canada Water redevelopment plans (46 acres of Council freehold land, more than 3000 new homes). After two and a half months it was released, in heavily redacted form – all financial and viability details, affordable housing provisions, pubic open space requirements and developer’s protected profit levels are completely redacted.

Extract from the redacted partnership agreement

Amongst the unredacted information is a reference to “Seymour Street Homes Ltd” as the affordable housing provider. Companies House records show that this is a recently incorporated and wholly-owned subsidiary of the developer British Land, part of a new trend in affordable housing provision that shifts it further from public control.

Extract from the redacted partnership agreement

Development partnership agreements, like the one for Canada Water, are invariably used for big developements, and if Southwark wants to avoid the controversies caused by the eventual publication of the Heygate and the Aylesbury partnership agreements, it should be fully open and transparent about the agreements it makes with developers.

8. Keep Walworth Town Hall in public ownership

Having sold off all Bermondsey and Peckham Town Halls, it was a relief when Southwark made a solemn promise to restore Walworth Town Hall & library to public use after it was badly damaged by a fire in 2013.

It is therefore disappointing, but maybe unsurprising, that Southwark has now gone back on that promise, claiming that it doesn’t have the funds to restore the Town Hall back into public use.

The Walworth Society is objecting to the Council’s current plan to privatise it and makes the very good point that if the two shortlisted developers “are able to redevelop the Town Hall buildings for up to £20 million and then make a profit from them with a commercial development, why could not Southwark redevelop them for a similar amount and include a significant proportion of commercial usage.” Consultation on this runs to 21 Jan; this is a link to the Walworth Society objections.

Southwark should stick to its original promise and restore the Town Hall to public use.

9. Reconsider its funding choices?

While Southwark argues that it doesn’t have enough money to restore Walworth Town Hall, shortly before Christmas Southwark’s Cabinet agreed to the purchase of ‘Courage Yard’, a commercial development in Shad Thames. SE1 website reports that the Council is paying £89m for the site – nearly twice what the current owner paid for it in 2015.

According to this Council report (para 21) Southwark owns £232m worth of such commercial investments, which currently provides a net total of £9.2m per year in revenue (3.9% return), but this appears to be less than the amount it is paying in interest on its debt – 4.6% on £563m (para 41).

Southwark is also spending £10m per year on bed & breakfast accommodation for its homeless residents, so, refurbishing Walworth Town Hall, reducing debt, or reducing temporary accommodation costs, by building more council houses, more quickly, all seem plausible alternatives for spending £89m.

Southwark has a large and diverse number of assets, which need to be managed in a prudent manner, but it should remember that it remains, first and foremost, a local government authority, not a speculative property developer.

10. Treat the traders at the Elephant shopping centre fairly

Elephant shopping centre developer Delancey has finally secured approval of Castle Sq, the temporary facility for displaced shopping centre traders, after making a last minute concession reducing the rents to between £18 and £24 per square foot; a significant victory for traders and campaigners, to join at least two others – the provision of Castle Square itself and the increase in social rented housing from 33 to 116 units.

However, Castle Sq is much too small and many traders will be looking at alternative premises, such as new units at the bottom of Perronet House, over the road from the Bakerloo line tube station. These are also not ideal, but as the landlord, Southwark could make traders lives a lot easier by charging rents no greater than those Delancey will be charging.

(We will be writing more on the whole shopping centre redevelopment shortly.)
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35% Campaign update – E&C shopping centre – Delancey stumbles after Mayor’s approval

Dec 16, 2018 12:00 am

A week of mixed fortunes for developer -Last Monday, shopping centre owner and developer, Delancey, seemed to have finally secured full approval for the redevelopment of the Elephant shopping centre, when Mayor Sadiq Khan declined to intervene in the decision-making. In doing so he allowed Southwark Council’s decision to approve the application to stand and joined them in defying written objections from seven local ward & constituency level Labour parties [^1], two London Assembly members and over a thousand formal objections submitted by local people, against Delancey’s disastrous redevelopment of the Elephant & Castle shopping centre.

Come Tuesday, though, and it was a different story when Delancey failed to secure another planning approval, for a vital condition of the shopping centre scheme. After a vibrant demonstration outside Southwark’s HQ in Tooley St, including impassioned speeches from the Latin American community, planning sub-committee B deferred a decision on Castle Square, the temporary boxpark facility for displaced traders. Delancey is obliged to get this planning consent before it can go any further with the shopping centre redevelopment.

To make matters worse for Delancey, it now looks certain that it will miss the 18 December deadline for concluding the legal S106 agreement that sets the seal on the planning approval. This missed deadline puts the power to refuse the application into the hands of the Director of Planning.

The Director of Planning has every reason to make this refusal, judging by what was heard on Tues evening. Council officers acknowledged that Castle Square would not be suitable for every kind of trader, while asserting that it was just one of the relocation options. Traders point out that it is the only purpose-built option and even when all the alternatives are taken into account there is still a shortfall in floorspace.

Close questioning from sub-committee members revealed other shortcomings, including an obvious one, that should larger traders take units in a yet to be settled flexible design, the Square would accommodate fewer traders in number. Distriandina, home to the Colombian cafe and restaurant, the ‘Heart of Latin London’, and currently occupying Arch 6, testified that Castle Square was not a feasible alternative for them at all.

Delancey has also been dragging its feet setting up the Trader Panel, which has meant that traders have had little influence over the design of Castle Square, prompting several practical objections, such as lack of window space to display goods. Nor has the Traders Panel been able to address fundamental issues, like leases that provide some certainty beyond the lifetime of Castle Square and the rents to be paid, the latter being the biggest problem for sub-committee members. Delancey claimed that the rents to be paid would be on a par with what is being paid by traders at the moment, with officer’s citing an average rent of £64psf. This was fiercely contested by the Elephant Traders Association and so the sub-committee deferred a decision on the application, to allow officers to gather better information.

The sub-committee is due to reconvene for a decision on Castle Square on 7 January 2018, other details to be announced.

Mayor gives dire scheme his approval

Hopes that the Mayor would have had the courage to reject the main shopping centre scheme were sorely disappointed by his refusal to intervene. It transpires that the decision was passed on to deputy mayor for planning, Jules Pipe, when the Mayor cited a conflict of interest, being chair of TfL, who are party to the scheme’s s106 agreement, including a deal for Delancey to provide a new Northern line tube entrance. The decision still remains the Mayor’s, though, in a formal and legal sense.

The decision was announced in a report and press statement which claimed further improvements negotiated by the Mayor, including an extension to the length of time traders would benefit from below-market rents to 15 years. This is better than the current 5 years, but its benefit depends on what the market rent is taken to be, and the Castle Square meeting shows there is no agreement on this. The statement also says that there will be ‘35 per cent…social rent… or other genuinely affordable levels’. The report shows this to be 116 social rented units, which is neither more than there was when the decision was referred to the Mayor, nor enough to meet Southwark’s planning policy, which would require around 170 social rented homes. The top end cap for discounted market rent, aka affordable rent, has been reduced from £90k to £60k, but this makes for a ‘genuinely affordable’ rent only in the Mayor’s imagination.

Delancey, TfL and UAL win, local people lose?

Delancey’s grudging improvements to their money spinning scheme betrays their reluctance to do anything for local people. The delay in bringing forward Castle Square to the last minute has backfired and there is now a chance to refuse the shopping centre scheme, a scheme that is disastrous for traders, the Latin American community in London, as well as offering both much less social rented housing than we need and less than we should be getting.

This chance for a refusal should be taken. All the big beasts – the Mayor, TfL, UAL and Southwark – have been focussed on what they can get out of the development, in the shape of new tube stations and university campuses, much needed no doubt, but gained at the expense of local traders and real affordable housing. They all supported the scheme with little reservation when it was first proposed and it took the local community to step forward, and by outright opposition wrest a few small, but important concessions, from Delancey.

Come the 19th December, Southwark’s Director of Planning can redeem the council by finally putting this scheme to a merciful end. It must not be allowed to destroy the long-standing, vibrant, mixed Elephant and Castle community, a home to working people from around the world for decades. If he does not do so, the local community and all its supporters – traders, residents, local councillors, students, TRAs and trade union branches – will be rallying at Southwark HQ once more on January 7, in support of the traders’ demands for space at rents that allows all of them to continue their businesses and to earn a livelihood for themselves and their families.

[^1]: The following parties wrote to the Mayor objecting to the scheme’s failure to meet minimum affordable housing requirements and provide sufficient relocation measures for traders: Bermondsey & Old Southwark Labour Party; Borough & Bankside Labour Party; North Walworth Labour Party; Faraday Ward Labour Party; St George’s Labour Party; Chaucer Ward Labour Party; Camberwell & Peckham Labour Party.
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