Residents vow to fight on after high court decision

Residents of Cressingham Gardens estate have vowed to ‘fight on’ to save their homes, despite losing a high court battle to overturn Lambeth council’s vote.

Mr Justice David Holgate announced today (Wed) that he would not quash the decision to demolish the celebrated estate near Brixton, south London, following a judicial review last month.

The result is a disappointment for residents, particularly as they won a similar fight this time last year, in which a judge found Lambeth had unlawfully withdrawn refurbishment options.

The council re-ran the consultation with repairs back on the table, but in March this year elected to go with ‘Option 5’ and flatten all 306 homes, despite overwhelming resident opposition.

The available evidence shows that after stripping people of their homes, Lambeth will force up living costs by hiking council rents and upping the cost of purchasing a leasehold property by between £200k and £300k per home.

The residents’ People’s Plan, a community-led alternative to demolition, would protect current affordable living costs, increase the number of council homes, and do so at a fraction of the cost of Lambeth’s proposal.

This year’s judicial review coincides with London mayor Sadiq Khan’s launch of a consultation on his ‘Homes for Londoners: Draft Good Practice Guide to Estate Regeneration’ which suggests demolition only as a last resort.

The claimant, Cressingham Gardens resident Andy Plant, said, ‘This is obviously not the Christmas present we’d hoped for.

‘Of course we had everything crossed for a brilliant win like last year. But it’s not all bad news, as we still have everything to fight for, and will fight on to save our homes and community.

‘We are hoping to appeal the judgment.

‘This case has forced the council to admit some very alarming facts, which we will be able to add to our armoury for other future challenges.

‘The facts we’ve exposed should serve as a call to action for Lambeth residents, and particularly people living on estates in this borough, who are worried about what its politicians are up to in their name.

‘Labour councils across London are citing the housing crisis as a reason to bulldoze council estates, but there is strong evidence that this land-grabbing practice has actually made the problem worse, driving up prices and even making people homeless.

‘Mayor Khan – who depended on his background of growing up on a council estate to bolster his mayoral campaign – should be requiring strict and independent cost-benefit analysis to be carried out before any estate demolitions are given the go-ahead.

‘He should not be watering down his pledges out of fear of standing up to his friends in powerful Labour-dominated councils.’

Those closely watching the mayor’s consultation, believe that an election pledge to make resident support key to any demolition, has been diluted.

Mr Plant also highlighted how Lambeth’s barrister James Goudie QC had sought to criticise residents by calling them ‘insatiable’.

‘This is actually an admirable quality in terms of calling this local authority to account,’ added Mr Plant.

And, far from upholding ‘Option 5’ as the fantastic solution trumpeted by cabinet member for housing Cllr Matthew Bennett and his colleagues, Mr Goudie ended up demoting Lambeth’s scheme, describing it as the ‘least of the worst of evils’.

During the case, Lambeth admitted facts behind many of the grounds of challenge, including that it failed to account for a £7.5m public subsidy to the redevelopment.

Earlier, officers had insisted the viability calculations had been done properly, before finally confessing, just weeks before the hearing, that development consultants Airey Miller had left out the multi-million pound expense from the financial model.

The revelation was buried in paragraph 21 of a witness statement from Lambeth’s finance director Christina Thompson.

During the November hearing, the judge described the excerpt, which was supposed to clarify the situation, as both ‘incomprehensible’, and part of a ‘delphic [deliberately obscure or ambiguous] witness statement’.

Lawyers for Mr Plant claimed that as a result of the omission, cabinet members were misled about the viability of the £110m scheme when they agreed to go ahead.

A correct calculation would have led to the full demolition option failing Lambeth’s own ‘must achieve criteria’, that had been set out during the consultation with residents, it was claimed.

While Lambeth admitted not including the £7.5m expense, it denied that this had an effect on the viability because, it claimed, the money would be paid back in due course.

The need to tackle the borough’s council housing waiting list has been repeatedly cited by Lambeth as a key motive for demolishing Cressingham Gardens, along with more a general attempt to resolve the ‘housing crisis’.

The community’s regeneration proposal, estimated to cost around £10.9m, would assist by creating up to 37 extra homes at council rent – many more than than the council’s preferred option, which at best promises 27 more such homes.

The council claims its redevelopment, (which would be carried out by Homes for Lambeth, a private company/special purpose vehicle (SPV) being set up by the council to regenerate at least six estates across the borough), would attract investment from private sources.

During the consultation with residents, Lambeth claimed that by contrast, any refurbishment options would be off limits because of the council’s Housing Revenue Account (HRA) borrowing cap.

This argument was strongly contested during the hearing, during which it was revealed how the residents and cabinet members had been supplied with out-of-date financial information, that concealed £48 million of extra borrowing capacity.

David Wolfe, QC, representing Mr Plant, described this as a ‘very significant failure’ of the consultation.

Residents formulated their consultation responses, including the People’s Plan, based on the council’s claim that there was very little debt headroom.

Partly as a result of the misinformation, cabinet members were led to believe that funding the People’s Plan was an impossible prospect, when in fact there was a pot of up to £52 million to draw from, it was claimed.

Following the close of the consultation and therefore, Lambeth moved the goalposts and cited a completely different barrier to funding – it claimed it would not be able to pay off the loan.

During the hearing, the council argued that cabinet members were aware of the new reason when they decided to demolish, a claim which Ms Thompson made in her witness statement.

Data eventually released by the council, suggests that a major factor contributing to the dire condition of the future housing finances, is the regeneration programme itself.

Cressingham resident Gerlinde Gniewosz, a co-author of the People’s Plan along with Mr Plant and others, said in a written court statement that it was now possible ‘to start to understand how the defendant is accounting for the impact of Option 5 [full redevelopment] on the HRA’.

Analysis reveals how the wider regeneration programme promises to strip council coffers of millions of pounds in rental income from council tenanted homes, ‘as the rebuilt homes would no longer belong to the HRA, but rather …Homes for Lambeth’ (the SPV).

Adding to the pressure, the council is still paying off debt generated by the historic build costs of many of its estates, and the rents would no longer be readily available to pay them off.

In addition, according to case papers, the Department of Communities and Local Government (DCLG) has warned that should the council seek to avoid the debt limit, it would be in breach of government policy – that being the policy on the ‘general power of competence’, under the Localism Act 2011.

Around the time of the judicial review, the parliamentary Public Accounts Committee also warned that ‘council taxpayers will end up footing the bill and other services will be under threat’ if local authorities’ risky commercial ventures – reportedly a growing trend – go wrong.

The claimant’s lawyers also argued that Lambeth had breached Mr Plant’s human rights when councillors decided to remove his right to buy, in particular when they failed to properly consider a ‘less intrusive measure’.

Mr Plant, who has lived in Cressingham Gardens for 20 years and hopes to buy his council home in the future, was told he would lose the right along with his secure tenancy.

The court heard how a regeneration consultancy called Local Dialogue, which ran the consultation with the council, made a ‘legally wrong’ claim in a document called ‘Key Guarantees for Tenants’, which stated, ‘The Council proposes to match your current tenancies as closely as possible in order to provide security of tenure.

‘You should note that the right to buy is not available under assured tenancies.’

Mr Wolfe argued, ‘It was correct that the lifetime assured tenancy would not carry with it the statutory right to buy.

‘But that was not the end of the matter, because it would have been (and would be now) entirely open to the council to create an equivalent contractual option to buy (even if, contrary to what Mr Plant would really like, it presses on with regeneration) with the assured tenancy, or as a protected right under a stock transfer to a housing association.

‘But there was no mention of that in the report to the cabinet.’

The council’s approach is in direct conflict with government policy, which was confirmed by the DCLG in a letter to a Cressingham resident.

The DCLG stated, ‘It is important that new council tenants should have access to the Right to Buy and that new homes should not be built by councils which are excluded from the Right to Buy… The Government believes that local authorities should support people to achieve their aspiration for home ownership through the Right to Buy.’

The government has also pledged to extend the scheme to housing associations (which Homes for Lambeth is expected to be), and is currently trialling a system in which replacement homes would be built, before a planned national roll-out.

Meanwhile, in Sadiq Khan’s own borough, Tory-led Wandsworth, residents of one of London’s largest housing regeneration schemes (Winstanley Estate & York Road) were balloted and will retain their council tenancies and associated rights.

Lambeth claimed that the right was not being lost, because tenants can opt to move to a council home elsewhere in the borough, should they wish to retain their secure tenancies.

‘At most, there’s an interference with the right,’ said Mr Goudie, adding, ‘but it’s a limited interference and not an outright removal.’

Mr Goudie claimed that under the present circumstances, ‘interference is in the public interest’, particularly as there is only one tenant’s account weighing against what the council insists is the greater ‘public good’.

Lambeth proposes to spend £110 million on the redevelopment project, to build an extra 148 flats.

The local authority has said that Homes for Lambeth would aim to let 27 of the additional properties at council rent levels, with most of the additional homes to be let or sold at market prices.

Though the judge dismissed Mr Plant’s claim on this point, he agreed Lambeth was obliged to consult on the contractual right to buy, which Lambeth has not yet done.

A £400k ‘weather-tight repairs’ project, which includes the replacement of a number of the estate’s leaking roofs, has been underway on the estate since the summer.

The scope of the investment was reduced from £1.4m following an outcry, after some leaseholders were sent estimated bills of up to £14k, within days of being told their homes would be pulled down.

The DCLG recently put a hold on Southwark council’s regeneration of the Aylesbury Estate, after refusing to confirm a number of Compulsory Purchase Orders which had been issued to leaseholders.

Secretary of state Sajid Javid said Southwark had not done enough to negotiate buy-out costs with the residents to allow them to remain in their community.

Lambeth denied four grounds, that: The council erroneously included £7.5m income which would have otherwise for each of the options resulted in its own preferred demolition option failing its own ‘must achieve criteria’; Misled its own cabinet members as to ‘The People’s Plan’ and/or the members failed conscientiously to take into account key aspects of this consultation response; Failed to provide up-to-date data relating to the HRA finances to either the consultees or the Cabinet members, such that they were (respectively) not properly able to comment on or take into account the data; and breached Mr Plant’s right to property under Article 1, Protocol 1 of the European Convention on Human Rights, combined with his right to respect for a home, by removing his existing ‘Right to Buy’, contrary to current government policy.

The judge dismissed Mr Plant’s claim on all grounds and ordered the claimant to pay the council’s costs. Mr Plant has 21 days to lodge an appeal.

Full ruling can be read here