Brixton Green, the community body seeking to build affordable rented homes on a redeveloped Somerleyton Road, is organising a public meeting on Wednesday 7 March to launch a campaign for Lambeth council to support its plans.
The meeting will take place downstairs at The Department Store 248 Ferndale Road SW9.
Brixton Green was shocked last month when the council, which had appeared supportive, said the scheme Brixton Green had been working on – backed by substantial sums of Lottery money – had “significant flaws”.
Councillor Paul McGlone, deputy leader of the council (investment and partnerships), told the Bugle that it remained fully committed to working with the community on the creation of new affordable housing at Somerleyton Road.
“We have worked with Brixton Green for a number of years and an enormous amount of time and effort has been made to deliver a scheme that works for the local community,” he said.
But, he went on: “Brixton Green have put forward a scheme to partner with a developer to build a large part of the scheme and unfortunately our detailed assessment of it revealed significant flaws. In particular, the scheme breached state aid rules and left a significant financial gap.
“It’s for these reasons that we could not take this specific proposal forward. But we absolutely want to retain the creativity and passion of the community and Brixton Green in the scheme and are continuing to hold discussions with them on a way forward.”
McGlone said the council was looking at the potential to deliver new homes on Somerleyton Road through its 100 per cent council-owned Homes for Lambeth.
“We believe it may allow us to create a scheme that can deliver for the community and meet our commitment to maximising the number of genuinely affordable homes on the site, with our priority being council rent homes for local people on the waiting list.” He said “Just last week progress was announced on a community scheme for 20 affordable homes in Streatham working with South London Citizens, part of our continued commitment to working with the community to tackle the housing crisis,” he said.
“But delivering a project with 300 homes, community facilities and specialist housing for older people represents a much bigger practical and financial challenge, and we have to meet our legal responsibilities as a local authority.
“Despite these challenges, we remain committed to the exciting prospect of a new community at the heart of Brixton, with affordable housing and fantastic community and cultural facilities for local people.”
Brixton Green said that many points made by the council were false. It had not proposed, as the council suggested, partnering with a developer to build the site.
“Our proposal was for a not-for-profit housing association to support us with carrying out the development phase only. We would pay them a development manager fee.
It pointed out that Paul McGlone had agreed a fee of £15 million for a development manager for its plans for the Central Hill estate in Crystal Palace.
It said the council had “wilfully misunderstood” its proposal in terms of the need for grant funding.
“We were open about a funding gap, and gave them five or six ways in which this could be dealt with, all of which were accepted as reasonable by institutional investors (pension funds) and the not-for-profit housing association that has been helping us.
“The work we did from September to December, checking the construction costs, showed a saving of nearly £7m against the construction costs we were originally using, which were Lambeth’s construction costs.”
Brixton Green said the council would have known this “if they had bothered to attend the monthly progress meetings we had, and invited them to. “The grant we would need is no more than £4 million.”
A Brixton Green spokesperson said it believed the council had an allocation of approximately £5 million from the Greater London Authority for the site.
“There is no need for funding from Lambeth, therefore there is no ‘aid’, and there is no ‘state aid’ if the state is not providing aid,” the spokesperson stressed.
“Our lawyers have told us that there is a good case that our proposal is delivering ‘public benefit’, in which case, even if ‘aid’ were being given by the state, it is acceptable, and is not considered to be a ‘distortion of the market’, which is what ‘state aid’ requirements are about.”