Brent Council, the developer’s friend – the proof in black and white

Guest Post by Philip Grant (in a personal capacity):-

 

Extract from the “Soft Market Testing” report to Cabinet, August 2021.

 

It looks bad. It looks wrong. That’s why I will persist in shining a light on the Brent Cabinet decision to allow a developer to profit from the sale of 152 new Council homes, to be built on the former Copland School site at Cecil Avenue in Wembley, until either the Council provides a satisfactory explanation of why that is the right thing to do, or agrees it is wrong and that all 250 homes in that development should be for Brent people in housing need.

 

In an article last month, I shared the information I’d received from a Freedom of Information Act (“FOIA”) request about Brent’s “soft market testing” exercise, in April 2021, which was supposedly to find out whether developers would be interested in being part of the Council’s Wembley Housing Zone scheme. But some of the information I’d asked for was withheld by Brent’s Head of Regeneration, who claimed that it was excluded from disclosure because:

 

·      It contained information obtained from and related to the financial and business affairs of 5 private developers (Confidentiality - Section 41 of FOIA);

·      It would be likely to prejudice the commercial interests of any person, including the public authority holding it (Commercially Sensitive – S.43(2) FOIA); and,

·      That in applying the public interest test required by S.43(2), ‘it is considered that the balance of maintaining the exemption outweighs the public interest in disclosing the information.’

 

On 12 December 2021, I sent an Internal Review request, setting out (with detailed reasons) why information prepared for Cabinet by Council Officers as a result of the exercise was not exempt information under FOIA, and why it was in the public interest that it should be disclosed. I agreed that if a report included confidential information received from developers, that could be redacted (blacked out) in the copy of the report sent to me.

 

I received the Council’s response on 15 January from Alice Lester, Operational Director (Regeneration, Growth and Employment). On a careful reading of her letter, I can’t see that she actually admitted any error in the initial refusal of my request. But her letter concluded: ‘However, I agree that a redacted copy of the report could be provided and this is attached.’ It is always worth sticking up for what you believe, if you think the Council has got it wrong!

 

In the interests of fairness to all five developers, and to show that I am keeping what they told Brent Council confidential, here is the second page of the report I was sent:-

 

Second extract from the “Soft Market Testing” report to Cabinet, August 2021.

 

I was expecting those sections of the report to be blacked out, but I was surprised to see that part of the last sentence of the “Market Commentary”, written by Officers, was also redacted:

 

The opening section of the report to Cabinet in August 2021.
[Don’t worry! The pipelines developers were talking about are forward plans to ensure they get as much work lined-up for future years as possible.]

 

The first version of the document sent to me was followed by an urgent request not to open it, as ‘it appears that the attachment wasn’t properly redacted.’ I didn’t open it, but waited for the corrected version (above). As that concealed words I believed should probably be disclosed, I did then look at the original, and although those words had also been blacked out, they weren’t securely redacted.  

 

I wrote to Ms Lester on Monday 17^th, to explain why I should be able to make the last seven words public, and on 19 January I received another ‘revised redacted document’.  The explanation was: ‘After further consultation with legal colleagues, the words to which you refer have been unredacted.’ After two challenges, I had finally been given information that I was entitled to request in the first place.

 

I can see why Brent’s senior Regeneration Officers might have wanted to keep these seven words about the developers from the public: ‘… and all stated interest in this opportunity.’ 

 

Of course all the developers were interested! The market opportunity they were offered was so “soft” that I don’t think any contractor / property developer would be likely to turn it down. Which begs the question, was that the answer that Regeneration Officers (and the Lead Member?) wanted from the “market testing”, so that they could put the idea of involving a developer as the ‘preferred delivery option’ for this scheme?

 

Normally a developer would have to find a site to build homes on, buy it (very expensive in London), get an architect’s team to design the proposed scheme for them, go through the planning process, then build the homes before it could get any return on its development, for which it would have borrowed £millions, over several years, in order to finance.

 

The key page from Brent’s Wembley Housing Zone “information pack” for developers, April 2021.

 

The opportunity Brent was offering, in its “market testing exercise”, was to pay whichever developer won the “procurement and contract structure” bid outlined above for building the Council’s housing scheme. Once built, the Council would agree to sell the developer 152 homes, for a fixed price agreed in advance. That price would have been included in the developer’s ‘bid submission’ for the contract, and none of the developers bidding would have offered ‘a guaranteed monetary consideration’ that would not give them a profit!

 

The report which included this “Confidential Appendix” went to Brent’s Cabinet in August 2021, and you can see from the minutes how enthusiastic they were about the proposals:-

 

Did none of the Cabinet members stop to think, and ask: ‘why are we handing half of the homes on this Council housing development to a private developer?’ Perhaps they were taken in by the statement in the Officer’s Report: ‘Cabinet Members were consulted in July 2020 and indicated [this] preferred delivery option for the Cecil Avenue site ….’? 

 

As I set out in my earlier article about the “soft market testing”, that consultation appears to have been “off record” and may have involved as few as two Cabinet members (the Leader and Lead Member for Regeneration). Didn’t other Cabinet members reading that think: ‘I don’t remember being consulted’, and if they did, why didn’t they question it?

 

Cabinet members apparently enthused about ‘the inclusion of London Affordable Rents as part of the offer’. Most of these would actually be the 54 homes on the Ujima House site, only 8 of which would be 3-bedroom “family homes” (with a 5sqm balcony as private outdoor space!). I had emailed the Cabinet members several days before, to highlight the problems with this Wembley Housing Zone scheme, and the need for more homes to be for genuine social rents.

 

Perhaps the Cabinet members didn’t have time to read my email before the meeting, but apart from a couple of automatic acknowledgements, none of them responded. I had to ask a public question for the Full Council meeting in November, and a follow-up question, but I still didn’t get any proper explanation for the Cabinet’s decision from Cllr. Shama Tatler.

 

Cllr. Tatler claimed that making all the Wembley Housing Zone homes affordable ‘is not financially viable’. How could it NOT be financially viable? The Council already owns the site. The Council could borrow the money to build the homes at some of the lowest ever interest rates. 

 

In answer to my straight question: ‘why is Brent Council not proposing to build all 250 of the homes at Cecil Avenue as affordable rented Council housing?’ Cllr. Tatler’s reply was: ‘the Wembley Housing Zone programme together proposes 50% affordable housing.’ 50% affordable housing is Brent, and London’s, target for all large private housing developments, even though that is rarely, if ever, achieved in the planning process.

 

Cecil Avenue is a Brent Council development, on Council owned land. The Council has paid (with public money from the GLA) to design the scheme and get it through planning consent. The Council will borrow the money to build the 250 homes. Why shouldn’t all of those homes be Council homes?

 

I make no apology for sharing again this parody of a Brent Council publicity photograph for its New Council Homes campaign. It shows exactly what Brent’s Cabinet has agreed should happen Cecil Avenue. 

 

If you want to deliver 1,000 new Council homes in Brent, why “give away” 152 of the new Council homes you are building at Cecil Avenue to a private developer? One way the Council seems to have compensated for this is to agree to buy a tower block with 155 leasehold flats from the developer of the Alperton Bus Garage site, at a cost of £48m. That guaranteed sale of one third of the homes will help the developer, Telford Homes, to obtain the finance to actually build this high-rise scheme, which was strongly opposed by local residents.

 

Why are a small number of Cabinet Members and Senior Council Officers seemingly favouring private developers like this? Why are their fellow Cabinet members not questioning why? Why are Brent’s Scrutiny Committees not asking for explanations? Why are the rest of Brent’s elected councillors not asking the Leader or Lead Member for Regeneration “Why”?

 

IT LOOKS BAD. IT LOOKS WRONG. 

 

Why is it left to an ordinary member of the public to ask WHY?

Philip Grant.

 

 

 

 

 

Brent’s affordable housing needs – is this “answer” acceptable?

 Guest Post by Philip Grant in  a personal capacity

Brent’s future flats at Wembley High Road, from the plans approved in February 2021.

 

On 13 August, Martin published an article I had written about Brent’s plans for Council homes in its Wembley Housing Zone. This set out why the Cabinet should question the recommendations made to them by Council Officers, particularly the lack of any social housing provision, and why it was proposed that two-thirds of the 250 flats and maisonettes in the Council’s Cecil Avenue scheme would be handed over to a developer for private sale. 

 

I sent a document copy of my article to all members of the Cabinet, for their consideration before their meeting. None of them replied, and on 16 August they accepted the Officers’ “preferred delivery option” for the developments at Cecil Avenue and Ujima House.

 

As I’d not received a reply from the Lead Member for Housing, Cllr. Eleanor Southwood (or any of her Cabinet colleagues), I raised this matter again with her when she did answer another housing matter which I’d written to her about [Brent’s “secret” Council Housing projects and the Council’s response]. I emailed her about the Council’s Cecil Avenue proposals on 19 September, with a copy to her Regeneration colleague, Cllr. Shama Tatler, and Brent’s Strategic Director for Regeneration, Alan Lunt. 

 

Cllr. Southwood responded on 23 September, writing: ‘Dear Mr Grant, just acknowledging your email, which I will respond to substantively shortly.’ Despite a reminder to her on 8 October, I did not receive any response, either from her, Cllr. Tatler, or any Council officer on their behalf.

 

As I believe this is a matter of some importance, I was not prepared to let it drop. On 16 October, I submitted a Public Question, to be answered at Brent’s Full Council meeting on Monday 22 November:-

 

Question to the Lead Member for Regeneration, Property and Planning:-

New Council Homes at Cecil Avenue, Wembley.

 

Brent Council has an urgent need for new Council homes, and has accepted the Brent Poverty Commission recommendation that more social rented housing should be a priority.

 

Brent Council owns the vacant former Copland School site at the corner of Cecil Avenue and Wembley High Road, and since February 2021 has had full planning permission to build 250 flats and maisonettes on this site.

 

Yet, at its meeting on 16 August 2021, Brent's Cabinet approved a 'preferred delivery option' that included only 39% affordable housing for this development, with less than a quarter of the total homes being rented at London Affordable rent levels (not Social rents), the balance of the affordable housing being at Intermediate rent levels or for shared ownership. Under this 'preferred delivery option', the majority of the homes at the Council's Cecil Avenue site would be sold privately by a 'developer partner'.

 

At the same meeting, Brent's Cabinet also resolved: 'To delegate to the Strategic Director of Regeneration & Environment, in consultation with the Lead Member for Regeneration, Property & Planning, the decision on alternative development scheme proposals and procurement routes, if procurement of the preferred option was unsuccessful in relation to the Sites.'

 

My questions are:

 

1) Given Brent's urgent need for social rent housing, why is Brent Council not proposing to build all 250 of the homes at Cecil Avenue as affordable rented Council housing?

 

2) As, since 16 August, the GLA has approved a grant to Brent Council of around £111m under its 2021/26 New Affordable Homes programme, to be used mainly for social rent housing, will the Lead Member, in consultation with the Strategic Director of Regeneration & Environment, now recommend that Cabinet changes its mind, and approves alternative proposals to make the Council's Cecil Avenue scheme 100% affordable housing?

The answers from Lead Members to Public Questions are published in advance of the Council meetings, as part of the agenda package. This is Cllr. Shama Tatler’s answer to the two points which I raised in my question:

 

Response:

1) Brent Council’s redevelopment of council-owned Cecil Avenue and Ujima House sites as part of the Wembley Housing Zone programme together proposes 50% affordable housing. However, because it is vitally important to ensure the long term sustainability of the Housing Revenue Account (which ultimately would be responsible for repaying loans secured to deliver new housing) it is not financially viable to deliver all 250 homes at Cecil Avenue as socially rented housing. 

 

2) Brent Council’s £111.7m GLA grant under the 2021-26 New Affordable Homes Programme is separate from the Wembley Housing Zone programme, and allocated to deliver an additional 701 socially rented homes across the Borough.

 

The response from the Lead Member is brief, and ignores much of the detail that my question was about!

 

Cllr. Tatler writes that Cecil Avenue and Ujima House together will provide 50% affordable housing. She doesn’t say that NONE of this will be Council housing at social rent levels, which is what homeless families and people on the Council’s waiting list desperately need. 

 

Ujima House is expected to provide 54 homes, all at London Affordable rent levels. Of the 250 new homes on the Cecil Avenue site, only 98 will be “affordable”, with 152 handed to a developer partner for private sale (‘to cross subsidise the affordable housing and regeneration of the area’). Of the 98 “affordable” Council homes, only 37 will be at London Affordable rent levels, with the other 61 as “intermediate housing” (‘either shared ownership or intermediate rent’).

 

 

The Wembley Housing Zone sites.

 

I realise that Council housing provided through the Housing Revenue Account must have long-term financial sustainability. The expected rental income over the period of the loan borrowed to pay for the homes (usually sixty years) must be sufficient to pay the interest on that loan, and to repay the capital sum. But with interest rates as low as they are ever likely to be, I find it difficult to understand why this Wembley Housing Zone development could not be financially “sustainable”, especially as the report to Cabinet on 16 August said that: ‘the GLA have also agreed in principle an additional £5.5m grant to deliver the scheme.’

 

It all comes down to “viability” (and we know from planning applications that the financial experts who developers employ can come up with any figure for viability that their client wants, in order to reduce the amount of affordable housing they have to include in their plans!). The viability of Brent’s Wembley Housing Zone scheme is, of course, known only to Cabinet members and the Senior Officers advising them. It is hidden away from the rest of us in a document named “Appendix 5: WHZ internal financial appraisal summary (exempt)”.

 

Cllr. Tatler writes that ‘it is not financially viable to deliver all 250 homes at Cecil Avenue as socially rented housing.’ But Brent is not delivering ANY socially rented housing at Cecil Avenue. Surely it would be financially viable to deliver at least some!

 

But, fear not, with the money from the GLA’s 2021-26 programme Brent promises ‘to deliver an additional 701 socially rented homes across the Borough.’ Around 300 of these might be provided through the “infill” of part of the open space beside the St Raphael’s Estate. More would be from the “infill” of (green!) spaces on existing Council estates, together with “airspace” developments on top of blocks in these. There is also an opportunity for ‘New Build for Rent in South Kilburn’ (Granville Park?).

 

Having asked a Public Question, I am allowed to ask a supplementary question at the Council meeting on 22 November. I’m not able to be present at that meeting myself, but hope that someone (I have asked the Mayor if she would be kind enough to do so) can ask it on my behalf. I’ve not made up my mind exactly what to ask, so if you have any (polite) suggestions, please feel free to make them as comments below, during the next couple of days.

 

Philip Grant.

 

 

Wembley Housing Zone – is this an answer to Brent’s affordable housing needs?

  Guest Post by Philip Grant (in a personal capacity)

One year ago, the Brent Poverty Commission report by Lord Richard Best was published. The Commission reported that: ‘1 in 6 households (17%) live below the poverty line, doubling (to 33%) after housing costs are taken into account. More than 1 in 5 (22%) of children live in poverty, doubling to a startling 43% after housing costs.’ The report identified: ‘an acute shortage of social housing which has forced people into the private rented sector where rents are two or even three times higher.’

 

 

The following month, Brent’s Cabinet gave its full backing to the report’s recommendations, including those based on the key point that the Council needed to put ‘more investment in social housing’, and ‘build even more affordable homes.’

 

 

Next Monday (16 August), Brent’s Cabinet has the opportunity to put those recommendations into action, when they consider a report on implementing the Council’s proposals for the Wembley Housing Zone. I will set out briefly what is proposed, and why Cabinet members may wish to question how what Council Officers are proposing might be improved, to take better account of the Poverty Commission’s findings.

 

The Wembley Housing Zone (“WHZ”) was set up in partnership with the Greater London Authority, to speed-up the delivery of new homes. £8m of GLA funding was received, and part of this (£4.8m) was used by the Council to buy Ujima House in Wembley High Road. The other site (already Council-owned) which now forms part of the WHZ is across the road, where Copland School used to stand (whose buildings were demolished after Ark Elvin Academy moved into its new school further down the slope).

 

 

A detailed planning application for the site on the corner of the High Road and Cecil Avenue, and an outline application for Ujima House, were made towards the end of 2019. Although these were approved by Planning Committee in March and June 2020 respectively, the formal consents were not signed off until February 2021. 

 

It had been decided that the two WHZ schemes would be treated as one for “affordable housing” purposes, and Cabinet is now being asked to ‘approve the preferred delivery option for the regeneration of the sites’. The two sites between them will provide 304 homes, and it is proposed that 50% of these should be affordable homes. I will give a short outline of what is proposed for each site.

 

The planning approval for Ujima House (19/3092) would demolish the existing building and replace it with a ten-storey block. There would be workspace and a café on the ground floor, with 54 residential flats on the floors above. The 28 1-bed, 18 2-bed and 8 3-bed (only 15% of the total) homes would all be for rent by Brent Council at London Affordable Rent levels (not social rents - see below). 

 

 

The more detailed application for the cleared site at the corner of Cecil Avenue and the High Road (19/2891) would build blocks, between five and nine storeys high, containing 250 flats and maisonettes. 64 of these homes would be either 3-bed or 4-bed (26%). However, only 39% of the homes in this development would be “affordable”, and only 52 of the 250 are proposed to be for rental, at London Affordable Rent levels.

 

 

[These blocks would not be as grim as they look in the elevation drawings, as the plans include a courtyard in the middle!]

 

The affordable element for this larger site was set out in an “Approved Plan”, which was made a condition of the February 2021 planning consent. More than half of the London Affordable Rent homes (28) would be 3 or 4-bed. The plan also set out that the other 36 “affordable” homes (21 of which would be 2-bed) should be either Shared Ownership or Intermediate Rent (which would be cheaper than private rents, but not within the means of those on the housing waiting list).

 

 

There appears to be a discrepancy. The 52 + 36 affordable homes for the Cecil Avenue / High Road site in the planning consent make a total of 88. However, the WHZ report to Monday’s Cabinet meeting says that 152 affordable homes will be delivered (50% of 304), and to reach that figure 98 of the homes from the larger site would need to be affordable, not 88.

 

Fifty percent of affordable homes may sound good. But if only 106 of the 304 new units are to be for rent, and all of those at London Affordable Rents, how does that meet the Cabinet’s commitment to the recommendations of the Brent Poverty Commission?

 

London Affordable Rent levels are set by the GLA. They use a formula based on rent figures decided in 2017/18, which are then increased each year by the previous September’s Consumer Prices Index increase plus 1%. The 2017/18 figures used were around 50% of open market rents at the time, but were between 30% and 50% higher than the average “social rent” levels for the same sized homes charged by housing associations and London boroughs. 

 

An analysis available on the GLA website makes clear that London Affordable Rent should not be confused with social rent levels, and says: ‘social rent is the only housing type really affordable to lower income Londoners.’ That is why the Poverty Commission report said that Brent should seek to make more of its new “affordable” housing genuinely affordable, at social rent levels.

 

It appears that the Council Officers making these WHZ proposals to Cabinet are either unaware of, or have chosen to ignore, the recommendations on housing in the Brent Poverty Commission report. Their proposals would ‘bring the Cecil Avenue and Ujima House sites to the market together’, through the Council undertaking the construction on both sites, but “procuring” ‘a developer partner to share private housing sales risk.’

 

The Officer report to Cabinet says that their proposal is a “medium risk” strategy:

 

‘The Council takes and manages construction risk, which it has experience of doing through its housing and schools capital programmes, but a developer partner is sought to take and dispose the private sales housing, of which the Council has no experience. By financing construction, the Council can use lower public sector borrowing rates and reduce finance costs.’

 

One of the “risks” of following this route would be:

 

‘A developer may seek to influence the final scheme, compromising the overall place making vision and regeneration benefits for the area.’

 

If the Council is going to undertake and manage the construction on the two sites, why not make ALL of the homes it builds “affordable housing”, providing 304 Council homes for people (especially families) on its waiting list? Ideally, these should all be for social rent, for those most in need, as recommended in Lord Best’s report. If that is not financially viable, an alternative could be 50% let at social rent levels, with the other 50% (presumably the better ones on the Cecil Avenue site, which a developer would have wanted for “private sale”) at London Affordable Rent.

 

I can’t make any detailed suggestions on the finance side, as six of the seven Appendices to the Officer report are secret, because they contain “Information relating to the financial or business affairs of any particular person (including the authority holding that information)". It appears that the press and public may also be excluded from Monday’s Cabinet meeting while these matters are discussed!

 

 

However, it is clear from the report which is available that there are ongoing discussions with the GLA over funding for the scheme, about ‘increasing the amount and affordability of affordable housing’:

 

‘Reviewing WHZ financial viability, the GLA have also agreed in principle an additional £5.5m grant to deliver the scheme, but which is subject to confirmation.’

 

If the Council would go back to the GLA, and its 2021-2026 Affordable Housing Programme, with proposals for the Wembley Housing Zone to provide 100% affordable housing, that could provide the answer.

 

I believe that this suggestion is worth serious consideration, so I am sending a copy of the text of this article to all of Brent’s Cabinet members (sent Friday 13 August at 4:23pm). I hope that at least some of them will raise questions based on it, especially about the need for social rent homes to be considered, at the meeting on Monday.

 

I will also send a copy to the Council Officers involved, and to the Chief Executive, for their consideration, and so that they can either provide answers, or at least agree to go away and look at this matter again. 

 

The Wembley Housing Zone provides a major opportunity to meet some of the housing need identified by the Brent Poverty Commission. That opportunity should not be wasted!

 

Philip Grant.