Complaint to European Commission alleges Council gave £1.5 billion in unlawful state aid to Capco

european commission logo

A West Kensington resident has submitted a formal complaint to the European Commission alleging that Hammersmith & Fulham Council gave £1.5 billion of unlawful state aid to Capco, the company redeveloping Earl’s Court. The state aid arose from the Council’s previous Conservative administration signing a contract for the sale of 22 acres of land occupied by the West Kensington and Gibbs Green estates for £90 million – well below market value. For the past seven years, the estates have been at the centre of a high profile campaign by residents to save their homes from demolition.

The amount of unlawful state aid provided by the Council to Capco was estimated on four different commercial bases. All of them showed a very large element of state aid. The analysis, carried out by consultant Dr Richard Fordham, estimated, on the strongest basis, state aid of £1.5 billion. This was calculated using figures Capco published in its annual results on 25 February 2016, which showed the company valued the profit on a similar sized area of adjacent land at £1.274 billion.

The complaint to the European Commission highlights many unusual features of the arrangement with Capco, including:

  • Capco was chosen by the Council for the scheme without a public tender, in contravention of Government Guidance on the sale of public land. The Council offered no logic for avoiding a tender process. The market was not tested; and many other well-qualified development companies in London and the EU were denied the opportunity of bidding for the land. Therefore it is impossible for the Council to prove that it obtained the best possible price.
  • The phased payments for the land, which run from 2015-2019, were not indexed for inflation, nor is there any review mechanism for the Council to benefit from property price increases. So no value growth was allowed for, despite the deal being struck when the property market was at its lowest point in the recession.
  • The Council used PricewaterhouseCoopers to confirm that financial due diligence had been satisfactorily undertaken and Jones Lang LaSalle to confirm the Council had obtained best consideration for the land. Both these firms were also engaged by Capco to audit its own accounts and value its Earl’s Court properties. PwC’s advice was so heavily qualified that, according to its letter, it did not constitute investment advice or provide an assurance.
  • The £90 million sale price for the estates’ land is far less than the current estimate of £140 million it would cost the Council to buy back homeowners and to obtain vacant possession from the secure tenants.
  • Although the 760 replacement homes were counted in the CLSA as part of the consideration for the estates, they were also calculated into the £452 million planning gain that formed the S106 agreement signed as part of the planning permission agreed in 2013.

Now that the European Commission has received the complaint it is for them to decide whether to mount an investigation. Should they find that there has indeed been unlawful state aid, the most suitable remedy would be either for the CLSA to be declared void and unenforceable or for Capco to pay £1.5 billion to Hammersmith & Fulham Council (net of £45 million it has already paid the Council).

Keith Drew, the resident who made the complaint, said: “The Council entered into a contract for the sale of our homes to Capco for a pittance. They used state resources to confer a huge exclusive unfair economic advantage on a wealthy developer. That £1.5 billion belongs to us. If this is not stopped, Capco stand to make an obscene profit out of public resources, causing misery to a community of 2,000 people. I hope the European Commission will mount a full investigation.”

Article 107(1) of the Treaty on the Functioning of the European Union states that any aid granted by a Member State or through state resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall be incompatible with the internal market, in so far as it affects trade between Member States.

In January 2013, the Council’s then Conservative administration signed a Conditional Land Sale Agreement (CLSA) with EC Properties LP, a Limited Partnership presently owned and controlled by Capital & Counties Properties plc, otherwise known as Capco (the name used generically by the Council to describe the holding company and limited partnership).

The CLSA requires the Council to transfer phases of the estates to Capco with vacant possession. In exchange for the estates land, Capco has to provide 760 replacement homes and pay the Council £90 million. But the Council has to buy back 171 homes from leaseholders and freeholders and arrange to rehouse all the tenants out of its own resources. Although it will then own 171 extra homes, it will have borne the associated costs of repurchase and taken the risk on the date of signing the CLSA that it would have to buy the properties at progressively higher points in the market to achieve the vacant possession it had undertaken to provide in phases over 25 years to EC Properties LP.

The CLSA is an option in favour of EC Properties LP, exercised wholly at their choosing. There are no obligations on them that can be triggered by the Council unilaterally without their willing participation. Thus, the Council cannot require EC Properties LP to proceed with, or once commenced to complete, the development. EC Properties LP can stop whenever it might be financially convenient for them to do so.

The Council claimed that only Capco could offer replacement accommodation so as to facilitate one rather than two moves for tenants. However, this was plainly wrong since the Council owned a redundant school in the middle of the estates occupying sufficient land area to have provided the replacement homes needed to empty out the first phase on the estates, and which it sold to Capco for £9 million, again without any tender or competition.

According to a review of the financial viability assessment conducted in September 2012 by District Valuer Services, the total Earl’s Court scheme value was estimated at £12 billion. Land Registry data puts the uplift in house prices in Hammersmith & Fulham between 2012 and 2016 at a factor of 1.57. This increases the total scheme value now to nearly £19 billion. Yet, the context for the price agreed by the Council in 2012 was a scheme value of £8 billion.

Sadiq Khan will review Earl’s Court masterplan if elected as Mayor

Sadiq Khan

Labour’s Sadiq Khan has joined the list of Mayoral candidates promising to review the Earl’s Court Masterplan if elected, leaving Zac Goldsmith for the Conservatives as the only major candidate yet to clarify his position on the contentious scheme.

A spokesperson for Mr Khan confirmed the following in a statement given to Dave Hill at The Guardian: “Sadiq will review the Earl’s Court Masterplan as he has serious reservations about the overall direction the scheme is taking.”

If it goes ahead in its current form, the Earl’s Court scheme would involve the demolition of 760 homes on the West Kensington and Gibbs Green estates.

Prior to this, Mr Khan had criticised Capco’s £12bn Earls Court scheme on Channel 4 News for containing not a single additional unit of social housing amongst the 7,500 new homes to be built, and only 11% additional ‘affordable’ housing.

Keith Drew is a long term resident and the chair of West Ken Gibbs Green Community Homes (WKGGCH), the resident-controlled non-profit Community Land Trust (CLT) which aims to prevent demolition and put the community in charge of building new homes and making improvements to the estates. Said Keith, “This announcement has created a feeling of real hope in what has now been a seven year campaign to stay in the homes that we love.

“The majority of residents have repeatedly said that we are against this demolition – a demolition which is frankly needless as there is nothing wrong with the homes here. We know Zac Goldsmith has said he wouldn’t support regeneration schemes where a majority of residents are against it – a commitment to review the Earls Court Masterplan is his chance to show that he is serious about what he says.”

Sally Taylor, Chair of the West Kensington Estate Tenants & Residents Association, added: “I am beyond thrilled to discover a prospective Mayor has ears that work! Maybe common sense isn’t as rare as the current Mayor has led us to believe. Londoners need to be heard. Thank you Sadiq!”

A petition on Change.org calling on the next Mayor of London to review the Earl’s Court Masterplan currently has over 2,000 signatures and has received public support from Grammy-award winning west London-born singer, Estelle. The petition was started by residents of the West Kensington and Gibbs Green estates.

Murvet Zengin, a local beautician and mother of two who is leading the petition online, said, “It is great to know that Sadiq Khan has promised to help us. If demolition happens it would destroy our lives. So many families would have to start again. It takes years to build a community like this. We want to know if Zac Goldsmith will make the same commitment.

“This is a big campaign, it is not something little. A lot of people are involved. A lot of money is involved. It’s not going to be easy. But this news gives us hope. We know other campaigns have won before, like New Era and Walterton and Elgin. We won’t stop working for it until our homes are safe.”

Over the past few months, West Kensington and Gibbs Green residents have been developing an alternative plan to demolition: The People’s Plan. The People’s Plan was informed by over one hundred residents who briefed architects to create a plan for infill development of new social rented housing and estate-wide improvements without the need for demolition.

Geraldine Dening, our lead architect, said: “Lord Heseltine, Chair of the panel set up to look at how to implement the Prime Minister’s initiative for council estates has said that estates regeneration “has to be locally led” and that he wants to “see local communities coming forward with innovative ideas to achieve desirable neighbourhoods that local people can be proud of”. The plans we have worked with residents to develop here achieve precisely that.”

Earl’s Court sales flatline: Capco spies on its opponents

Meet Gibbs Green homeowner Matt Bain who is fighting to save his home from being demolished to build luxury homes that no-one wants to buy

On 25 February, Earl’s Court developer Capco published its annual results. These showed that since its last update on 10 November, the proportion of the 70 flats in Phase 2 of its Lillie Square development that have been reserved or exchanged has stayed at 40%. So it seems that sales have flatlined. Capco has still not sold all the 237 homes in Phase 1 that was launched in March 2014 – 10% are unsold according to its website. And, despite announcing in September 2015 that 1 bedroom flats in Phase 2 would be offered at prices starting at £795,000 – a third higher than those for Phase 1, the February 2016 results report that prices achieved for Phase 2 are only 5% higher than Phase 1.

Concerns about the luxury property market have forced Capco’s share price down from £4.72 on 18 August 2015 to £3.27 on 2 March 2016. The price went so low that on 25 February, four Capco directors bought a total of 140,000 shares at a cost of about £454,000.

Increased Stamp Duty and reduced tax relief on second homes are not the only worries facing Capco. The Company reports that: “Due to its scale, there will remain a risk of protests or legal challenges (ranging from complaints about noise through to judicial reviews or applications for listing) against specific aspects of the scheme as it is progressed. It should be noted that all such challenges to date have been successfully defended however future challenges of this nature cannot be discounted.”

theimperialarms

West Kensington residents Keith Drew and Rita Vlahopoulou in period costume on 20 February protesting against Capco’s threatened destruction of our Victorian heritage in Lillie Road and Empress Place

The report goes on to identify “public opinion” as a principal risk and uncertainty: “The Group’s business (or aspects of it) is opposed or challenged by public interest or activist groups”. The impact on strategy could be “reputational damage, litigation, distraction of management and prosecution for non-compliance.” So, what is Capco doing to mitigate this risk? According to the rather sinister statement in its report, it is: “Monitoring intelligence on activist groups” – in other words it is spying on the residents of West Kensington and Gibbs Green and on those who have supported the campaign to save the exhibition centres. Do the public authorities – Hammersmith & Fulham Council and Transport for London – that have contracts with Capco feel comfortable that their business partner is spying on people acting in the public interest?

Capco also recognises as a risk the political climate, “unfavourable policy or changes in legislation (in particular, as a result of political change) e.g. London mayoral elections”.

Matt Bain, a first time homeowner living on the Gibbs Green estates, said: “I’m a musician and I teach music at a local school. It’s an insult to be told that there is a ‘supply glut’ of the type of housing that I or nobody I know could ever possibly afford. I have been fighting alongside my neighbours now for five years to save my home.

These are decent, genuinely affordable places to live, with a strong sense of community. If the next Mayor of London allows demolition to take place, this strong and genuinely socially mixed community will be destroyed as private renters, leaseholders and council tenants are forced out, leaving only the ghost of a Fulham that used to be.”

Demand may well be slowing for the pristine, glassy luxury homes shooting up all over London. But demand is at crisis point for the kind of housing that is here already. And, with Capco’s development strategy faltering, it’s time we had a Mayor whose policies are to protect council estates that don’t need to be demolished and to build new homes that Londoners can really afford.

Over 2,000 people have signed our petition calling on Zac Goldsmith and Sadiq Khan to review the Earl’s Court masterplan should either of them get elected as the next Mayor of London. They would do well to read the 370 comments posted on the petition to appreciate the enormous strength of feeling behind our campaign.

Click here to view the petition on Change.org.

Will Zac Goldsmith and Sadiq Khan put their money where their mouth is on estate regeneration?

 

 

To hear why such a commitment is so important, click to watch the video below and hear the story of David Isaac and his family, who could face moving out of the area or even London if demolition of the West Kensington and Gibbs Green estates is allowed to proceed.

So far, the Liberal Democrats, the Greens and Respect have all promised to review or to block demolition of West Kensington and Gibbs Green under the Earls Court Masterplan.

What is more, Lord Heseltine, who has been appointed by David Cameron to chair a panel looking into the regeneration of council estates has said that estates regeneration “has to be locally led”. He has said that he wants to “see local communities coming forward with innovative ideas to achieve desirable neighbourhoods that local people can be proud of”; an aspiration which is embodied by our People’s Plan for an alternative to demolition and not by the unwanted Earls Court Masterplan.

Zac Goldsmith said recently that he won’t support estate regeneration without “majority support in the communities” (read more here). The majority of us on West Kensington and Gibbs Green have consistently opposed demolition: most recently 57% of households signed a petition supporting the Right to Transfer as an alternative to demolition.

Sadiq Khan has announced that if he is elected Mayor, 50% of new homes built on public land should be genuinely affordable (read more here). The Earls Court scheme promises just 11% new ‘affordable’ units, which would be provided at 80% of market prices. And this was based on a viability assessment that was demonstrably designed to minimise the developer’s contribution to affordable housing.

Given all this, we cannot imagine why both candidates shouldn’t support a review of the Earls Court Masterplan.

Over the next few months we will be publishing more stories like David’s, from his neighbours and friends in West Kensington and Gibbs Green. David’s story is just one of many.  We want the candidates to see first hand how the needless destruction of the estates would affect people and why it is crucial to the future of London that they agree to review the Earl’s Court scheme.

Do you think the Labour and Conservative frontrunners should get with the times and agree to review the demolition of our homes?

Here are a few quick things you can do to get behind the campaign:

  1. Sign our petition on Change.org calling for the next Mayor of London to review the Earls Court Masterplan and the proposed demolition of West Kensington and Gibbs Green
  2. Like our Facebook page West Ken & Gibbs Green – The People’s Estates and share David’s story with your friends
  3. Follow us on Twitter @WestKenGibbsGr and tweet the candidates to tell them to #ReviewEarlsCourt
  4. Contact our Housing Organiser Zoe at zoe.wkggch@gmail.com to be added to our supporters mailing list and hear about events and opportunities to volunteer

Residents launch People’s Plan to draw up our own regeneration plans

151112_082

On 12 November, 40 residents came together in the Gibbs Green Hall to begin briefing architects from Architects for Social Housing (ASH) on proposals to prepare our own plan for regeneration as an alternative to demolition. This was the first meeting in a programme of events to draw up a People’s Plan to enhance and improve our homes and neighbourhood, creating a more detailed picture of what our estates could look like under resident control.

151112_079

Residents were grouped onto tables for the different areas of the estates. Using plans, pins and labels, they identified what works well and what they would like to change about their homes and surroundings. The session was a great start to the programme of events with residents participating enthusiastically. The architects are now collating all the information that was gathered.

The People’s Plan is a study to draw up and cost outline plans for improvements to the buildings and environment and for additional homes. This plan will be used to promote our own scheme for regeneration that is inspired by our knowledge of and aspiration for where we live. As part of the Right to Transfer process, we need to demonstrate to the Government that we have our own vision, that this vision is realistic, and that it contributes to greater housing supply.

The People’s Plan will be a powerful statement about how we see the future of our neighbourhood. If the Government allows our community transfer proposal to proceed, it will form an important part of the feasibility and development stages of the Right to Transfer process.

Residents are invited to participate in further events to help design our future:

Tuesday 24th November: Design workshop for improvements to existing buildings and the environment 6.30pm – 8.30pm at Gibbs Green Hall, W14 9NB

Tuesday 1st December: Design workshop for building additional homes on the estates 6.30pm – 8.30pm at West Kensington Community Hall on Lillie Road,

Tuesday 15th December: Mince pies, mulled wine and progress update 7pm – 9pm at Gibbs Green Tenants Hall

Residents are also invited to get involved online:

What do you like and dislike about where you live?

Where on the estates do you feel happiest?

Where can you see an opportunity to brighten up the place?

What to you is an example of good design?

What is the view from your window?

Share your photos, drawings and ideas on the Facebook group: ‘West Kensington and Gibbs Green: The People’s Estates’. And comment on proposals posted there by the architects from ASH. Follow us on Twitter @WestKenGibbsGr

Residents call on localism champion Greg Clark to support community-led plan

Residents from the West Kensington & Gibbs Green Estates - threatened with eviction and demolition - head to the Home Office Department for Communities and Local Government on Friday 23 October to deliver their response to the CouncilÕs determination request to the Secretary of State. The residents have applied for a Right to Transfer their homes into community ownership.

On Friday 23 October, West Kensington and Gibbs Green Residents visited the offices of the Department for Communities and Local Government to present the Secretary of State Greg Clark with our case for an alternative plan for the 760 homes threatened with demolition as part of the Earl’s Court redevelopment.

The submission was our response to the Council’s request that the Government should strike out our Right to Transfer proposal, which we initiated on 11 August 2015 by serving notice on Hammersmith & Fulham Council. The Council’s previous administration signed a secret ‘collateral agreement’ with the developer, Capco, which states the Council should do everything it can to resist any challenge to the Earl’s Court redevelopment scheme. But, legal advice obtained by the residents and included in our submission to the Secretary of State states the Council is not bound to resist the residents’ Right to Transfer proposal and that the collateral agreement is an unlawful fetter on the Council’s discretion.

The Council claims that the proposed transfer would have a significant detrimental effect on the regeneration of the area and would prevent it receiving receipts from a land sale contract with the developer. However, in our submission we pointed out that:

  • The transfer does not prevent regeneration since the land sale agreement already anticipates transfer of the estates;
  • Even if the estates are excluded, the developer will still be developing significant landholdings in the area;
  • No progress has been made with the scheme for redeveloping the estates in the past two and a half years;
  • No detailed planning permissions have been obtained, the first phase of the demolition has not been agreed and the residents’ contracts have not been finalised;
  • Both Capco and LBHF want to change the current scheme, which would require revision to the sale agreement and a fresh outline planning application;
  • The Council’s financial receipts from the developer will be more than soaked up by its expenditure on the scheme.

Residents believe that transferring ownership of the two estates from the Council (LBHF) to a community owned landlord would enable us to retain and invest in existing properties and work with our neighbours to plan new affordable homes on infill sites.

Residents from the West Kensington & Gibbs Green Estates - threatened with eviction and demolition - head to the Home Office Department for Communities and Local Government on Friday 23 October to deliver their response to the CouncilÕs determination request to the Secretary of State. The residents have applied for a Right to Transfer their homes into community ownership.

Homeowner Iona Bain, who handed in our submission, said:

“I am very worried about the demolition scheme and have lived with this worry for years while the area has been blighted by uncertainty. I worked very hard to buy my flat here and I have invested a lot of money and time in my community to make it my home. I feel totally let down by the promise of homeownership. I just hope the Secretary of State will listen to us and support the will of the local community.”

Alongside evidence to support our cause, tenants and homeowners from the estates handed over a petition signed by 525 residents from 57% of all the homes on the estates calling for a community-led alternative to the scheme currently being renegotiated between the LBHF and Capco, the developer.

“The majority of residents have consistently opposed demolition, 80% according to the Council’s own consultation in 2012,” said Keith Drew, resident of forty-three years and Chair of West Ken Gibbs Green Community Homes, the not for profit set up by residents to drive the campaign.

“The developer’s plan is especially disruptive for Right to Buy homeowners since the compensation they would get for their home would be insufficient for them to buy a replacement home in the area.”

“The Council is currently renegotiating the scheme with the developer. It is rumoured that the number of homes additional to those already approved will run into the thousands rather than the hundreds. This is bound to prove unpopular with people in the surrounding areas and generate significant controversy in the run-up to the Mayoral election. The community has been kept out of these discussions. We believe we can achieve a much more satisfactory regeneration scheme by retaining popular housing and building new homes on infill sites around the estates.”

Photographs appended to the submission illustrate the attractiveness of the estates, the amount of green and play space and the relatively new homes threatened with demolition.

Residents from the West Kensington & Gibbs Green Estates - threatened with eviction and demolition - head to the Home Office Department for Communities and Local Government on Friday 23 October to deliver their response to the CouncilÕs determination request to the Secretary of State. The residents have applied for a Right to Transfer their homes into community ownership.

Green Party Mayoral candidate promises to block demolition and support community ownership

greenmayor

Left to Right: Party Leader Natalie Bennett, Baroness Jenny Jones and Sian Berry in the West Kensington Estate Tenants Hall

On Wednesday 2 September, the Green Party announced its selection of candidates to stand for the London Assembly and to run for the Mayoral election in 2016. Baroness Jenny Jones explained that the Green Party had chosen to make this announcement from the West Kensington Tenants Hall so as to show solidarity with the residents of West Kensington and Gibbs Green in their fight to save their homes from demolition. Jenny reminded everyone that the Green Party London Assembly Members had consistently questioned Mayor Boris Johnson about, and had done all they could to oppose the Earl’s Court redevelopment.

It was then announced that Sian Berry had been selected by Green Party Members to be their London Mayoral candidate. In her acceptance speech, Sian said:

“Greens want London to be a community again – a place where anyone can come and live, work, play, and feel at home. A community where the people who live in an area get to decide what happens when an estate needs a revamp or a brownfield site needs developing. And get to decide what happens based on the needs of the community – not the need for the biggest property companies in the land to make the biggest profits they can.

The chance we have to create a different kind of life for Londoners is captured perfectly by what is happening here on the West Kensington Estate. The residents who live here don’t want to see it bulldozed and turned into a new private development. They want to remain in their homes surrounded by the community they love, and feel as though they have ownership over their own future.

And I am pledging today to listen to them, and that, if elected as Mayor I will block the Earls Court Regeneration Scheme, and support the residents in their bid to take over their homes and take the lead on the regeneration of the West Kensington and Gibbs Green estates.

This will be the first of many schemes like this, because the solution they have proposed is the inspiration for a new policy we are announcing today too.

In City Hall, we would put resources and staff into a new Community Homes Unit to support community-led housing schemes, including and especially in estate regeneration.

  • The unit would provide expertise and grants to get involved in planning at an early stage and develop viable proposals.
  • It would help residents fighting their council to set-up their own community homes body and take ownership of their estate through a ‘Right to Transfer’ notice.
  • It would help them clear the legal hurdles needed to get these notices approved by the council or Secretary of State.
  • And it would help residents all over London develop their own masterplans for the kind of refurbishment and redevelopment they want for the areas they call their homes.

Like the West Kensington residents have done, we have based this on a successful model in Cornwall, where 13 community-led housing schemes (in community land trusts) have been finished since 2009. London needs the support this unit would provide because the fight being faced by residents here at West Ken is not an isolated one.

It isn’t the whole solution – our housing problems need more resources for social housing, more public land dedicated to community homes, and rights and costs for private renters need action too.

But our Community Homes Unit is a positive, affordable step that will help. It will act to help stop the need everyone has to put a decent roof over their heads from being exploited, and help our citizens find new ways of making London truly affordable again.”

Residents serve Right to Transfer Notice on the Council

150811_0100

On 11 August, 30 residents and supporters of West Kensington and Gibbs Green estates went to the Town Hall to serve a legal notice on Hammersmith & Fulham Council proposing the transfer of their homes to a community owned landlord. Click here for audio slide show.

The Right to Transfer is enshrined in Section 34A of the Housing Act 1985. It grants council tenants the right to transfer their homes to a housing association subject to certain criteria and conditions being met. In 2011, residents founded West Ken Gibbs Green Community Homes as the resident controlled company to take forward their community transfer ambitions. The Coalition Government eventually implemented the Right to Transfer in December 2013.

150811_0057

In May 2014 the Council’s Conservative administration was replaced by Labour, who over the past year have been in discussions with Earl’s Court developer Capco about renegotiating the massive redevelopment scheme that would see the estates demolished. During this time, the original regeneration scheme has been in abeyance, effectively frozen while a different scheme is being drawn up. No new scheme has yet been put in place and residents have not been informed about the options under consideration. Residents were told that proposals would emerge by early this year, but these have not materialised.

Meanwhile, Capco has established an office on the estates to promote their demolition plans. In consequence, residents don’t know what is planned for their homes and are left in limbo with the threat of perfectly decent homes being demolished. They fear that new plans would still involve demolition of their homes with even more homes being built in their place.

Chair of the tenant group, Keith Drew said: “Residents are fed up with the on-going uncertainty. We’ve always opposed demolition and the current Council’s manifesto said the same. The Council has been talking with the developer for almost a year. It’s apparent that the previously agreed regeneration scheme is undergoing major revision but we’ve been excluded from the discussions and no new scheme has been agreed. We expect the Government to support tenants to exercise our legal rights to be empowered to get on with our own plans for regeneration. It would be ironic, to say the least, if the Labour Council asked a Conservative Government to help them stop us from saving our homes.”

150811_0107

Following the service of the Right to Transfer Proposal Notice, the Regulations stipulate that the Council has 28 days in which to validate the notice. At any time, the Council may seek a determination from the Secretary of State not to co-operate with the transfer proposal on the grounds it may have a detrimental impact on the regeneration of the area or the provision of housing services.

In January 2013, the then Conservative administration secretly signed a ‘Collateral Agreement’ with Capco binding it to resist and oppose any challenge to the redevelopment. A legal opinion obtained by residents from Martin Westgate QC of Doughty Street Chambers states that this agreement is an unlawful fetter on the Council’s discretion and that the Council should not have regard to it when deciding how to respond to the tenants’ request to transfer their homes to a community landlord.

As part of their transfer proposals, residents intend to produce our own plans for regeneration of the area. Architects will be engaged to draw up options for making improvements to the existing properties and constructing new homes at various locations around the estates. There will be widespread consultation with neighbours who will be invited to make their own suggestions and get involved in preparing a policy for prioritising who should be offered new homes.

Residents challenge Labour’s prospective Mayoral candidates

26eaf089-f903-4163-8f0d-bc50e00b1a33-620x372

The three elected residents’ organisations for West Kensington and Gibbs Green have written to (left to right) Diane Abbott, Christian Wolmar, David Lammy, Tessa Jowell, Gareth Thomas and Sadiq Khan. The prospective Mayoral candidates have been asked to explain their position on the Earl’s Court redevelopment. Do they support the residents in our opposition to the demolition of our homes? Do they support our ambition for the estates to be transferred into community ownership? Have they been lobbied by developer Capco?

iphone 25.6.15 163

In their letter, the three Chairs referred to the visit to our estates by Lord Adonis, the Chair, and Nick Pearce, the Director (left and centre above) of think tank IPPR. Following the launch of the ‘City Villages’ report (see previous post), we contacted IPPR about the inclusion of the Earls Court redevelopment scheme as an example of the “City Villages” approach. We went to meet with Andrew Adonis and Nick Pearce at their office and they listened to our criticisms of the factual inaccuracies in their report and concerns about the failure to reflect residents’ opposition to the scheme. They agreed to visit the estates and write up what they saw and heard. The visit took place on 21 May and included a tour of the estates with resident representatives and meeting a group of residents in the home of one of our Board Members.

Nick Pearce then wrote an article which was published on the IPPR website. It emphasised their conclusions that residents should be fully consulted and balloted on redevelopment proposals, that schemes should add to the stock of social homes and not be at the expense of existing mixed communities, and that policymakers should explore the potential for community ownership to give tenants greater control. We think this is a very positive and sensible approach that should be applied across the many proposals in London for redeveloping council estates.iphone 25.6.15 357

Meanwhile on 24 June residents and supporters demonstrated outside Kensington and Chelsea Town Hall about the health implications and in particular the asbestos danger arising from the demolition of Earl’s Court. They were there to attend a debate that was triggered by the submission of a petition with 1,600 signatures calling for an independent health review amid concerns about pollution and dust caused by the demolition of Earl’s Court. All three main opposition parties, (Labour, Lib Dems and Greens), came together to support the petition and spoke in the debate.iphone 25.6.15 290

On 20 June, supporters joined the anti-austerity march through London to remind people of the campaign to save Earl’s Court exhibition centres and the West Kensington & Gibbs Green estates. An appallingly low level of affordable housing (11%!) is included in the scheme. The Developer Capco plans to build 6,000 luxury homes and stands to make at least £3 billion from the scheme.

Labour Peer favours developer rather than people led approach for council estates

RIBA, eclipse, WKGGCH meeting, Terri lunch,walk, city hall demo, 190

On Tuesday 24 March 2015, West Kensington and Earl’s Court residents gathered outside the Royal Institute of British Architects. Inside, Labour Peer Lord Adonis was launching a report he had edited: City Villages – More homes, Better Communities, published by think tank, the Institute for Public Policy Research (IPPR).

In respect of what is suggested for the future of council estates, the tone of this report and the language it uses is disturbing. Communities of people are referred to as “sink estates” and “valuable reservoirs of increasingly scarce land”. Essentially, as Lord Adonis summarises in his introduction, it proposes that London’s council estates should be redeveloped en masse. Supposedly, this would produce a large increase in the number of homes and benefit the communities who live there.

The problem with this approach is that it does not feature the views or aspirations of the people who live on these estates. Nor does it appreciate the damage and dispersal that widespread demolition would cause to communities. Instead, it advocates a largely uncritical analysis of, and solution for council estates that has provoked huge opposition and controversy over the past few years. We are not alone in our concerns about the approach. Since the ‘City Villages’ report was published there has been a chorus of concern from Dave Hill of the Guardian, housing Professor Steve Hilditch, and Inside Housing commentator Jules Birch.

Lord Adonis’ proposal that housing estates should be put together with adjoining development sites to create larger development potential is precisely the approach that was pressed on unwilling council tenants in Hammersmith and Fulham by former Conservative Leader Stephen Greenhalgh. His development dominated policies brought about his downfall as Leader and led to the Borough being won by Labour in 2014.

The IPPR report has an essay promoting the Earl’s Court redevelopment in which Capco Director Gary Yardley refers to West Kensington and Gibbs Green as “the old estates”. Gibbs Green was completed in 1961 and the larger West Kensington in 1974. No mention here that 80% of residents have steadfastly opposed demolition and campaigned instead for community ownership and their own plans to add new homes to the estates. No mention either that the developer is in discussions with the Labour Council about how to honour its manifesto commitment to prevent demolition. Nor, unsurprisingly, any mention of the convictions for bribery and corruption affecting Capco’s development partner. As Steve Hilditch argues in his blog “City Villages or ghettoes for the rich”, creating a “city village of rich people replacing long-standing social tenants with virtually no new social housing is not my idea of progress and has no place in such a report”

Omissions are one thing, but Lord Adonis’ conviction that demolition is right for council tenants’ homes is undermined by a series of factual errors. He claims that no freeholds have transferred from local authority ownership under the “Right to Buy”. This is wrong. A tenant who buys a house rather than a flat gets the freehold. As a consequence, 39 such freeholds exist on the West Kensington estate alone, with hundreds if not thousands more across council estates in London.

More mistakes emerge in Lord Adonis’s praise for the Earl’s Court scheme: “The site assembly at Earls Court is itself a remarkable feat: partly existing White City council estates, partly large redundant Transport for London (TfL) train storage and repair facilities, and partly the site of the decommissioned Earls Court Exhibition Centre.” Wrong estates (White City is a couple of miles away, so it would indeed be a remarkable feat!); far from being redundant, the train storage and maintenance facilities are essential to the Underground network; and the Exhibition Centre was fully functioning until it was shut for the site to be converted to luxury housing by Capco! (This was much opposed by the events industry who are concerned about the serious shortage of events space in London). Lord Adonis’ claim that the Earl’s Court masterplan creates “a large new public park” repeats the developer’s misrepresentation of the pathway between tower blocks that is produced by decking over the West London Line.

Given everything we have learnt about the redevelopment of urban housing over many decades, it is surprising that this report should present a programme which would rely on being imposed from the top down, and that nowhere does it suggest residents should take the lead in determining what is beneficial for their community. The Labour administration in Hammersmith & Fulham has halted any further redevelopments and established a Residents Commission to examine whether stock transfer would be the best way to protect communities and social housing.

It does seem extraordinary that the IPPR report takes insufficient account of the storm of controversy that has swept London in response to the many council estate redevelopment schemes underway. It is strange that Lord Adonis should so uncritically champion the Earl’s Court scheme, given the billions of pounds profit the developer expects to makes from destroying peoples’ homes and jobs. It’s curious that a Labour Peer should side with a Conservative instigated development which a Labour Council is doing its utmost to get out of.

Blog at WordPress.com.
The Esquire Theme.

Follow

Get every new post delivered to your Inbox.

Join 50 other followers

%d bloggers like this: