OPINION HOMES FOR LAMBETH TWO – THE BUSINESS PLAN: THE RATEPAYERS WILL BAIL US OUT

On Monday Lambeth council’s Labour cabinet meet to rubberstamp the business plan of their unwanted and highly controversial Homes for Lambeth scheme.

Homes for Lambeth came about because the council claim they do not have the money to repair council estates in sought-after locations across the borough. But they can find £29 million to spend on demolishing those estates – and then rebuilding them.

They have spent  loadsamoney on unnecessary consultants, loads of money on agency staff because people don’t want to go and work for them. But no money to repair council estates.

So they are now going to spend vast amounts of money on demolishing six estates – and maybe even more in the future – as they carry on regardless.

Alongside the main report to cabinet next Monday is a so-called business plan. Clearly whoever wrote this plan has no understanding of what has been going on between Lambeth Labour and the people living on the six estates Lambeth Labour want to demolish – Central Hill, Cressingham, Fenwick, Knights Walk, South Lambeth and Westbury.

(Or if they have they have chosen to completely ignore it. But that’s the way of Lambeth Labour – ignore anyone who disagrees with them, even by just one iota.)

Lambeth may have written much of it – a lot of the business plan report mirrors exactly the propaganda Lambeth have been putting out.

The business plan report includes the following comment from a Mr Richard Reynolds, chairman of Homes for Lambeth:

We will also move forward in partnership with Lambeth council and local residents on Central Hill, Cressingham and the Fenwick estate on plans to rebuild these estates. I’m looking forward to working with Lambeth council and the Homes for Lambeth team to build the more and better homes Lambeth desperately needs.”

Has Mr Reynolds visited any of the six estates? spoken to people who do not want to leave their homes?

Under ‘Primary risks’ the business plan admits:

2.10 The primary risks facing Homes for Lambeth are currently considered to be:

2.10.1 Construction cost increases beyond forecasts and stress-testing in light of market fluctuations and Brexit uncertainty, causing viability challenges.

2.10.3 Programme delays causing an increase in costs with a consequential impact on liquidity.

2.10.4 Risk of contractor failure due to volatile market conditions.

Towards the end of the business plan there’s another chapter headed 12. Risk Management.

It reads:

12.4 In recommending this Business Plan to the council’s cabinet for approval, the Homes for Lambeth Boards wish to bring to the council’s attention (in its capacity as shareholder) the key, or headline risks associated with this Business Plan.

There are two main types of such risk:

  • Risks that may impede delivery of the Business Plan and
  • Risks to the shareholder arising from delivery of the Business Plan

12.5 The risks that are set out below represent the main risks that have been identified by the Boards as those which could hinder delivery of the proposed development programme or represent future financial risks to the council as funder and guarantor of any funding of the development programme (and thereafter the new housing stock under management).

The business plan says these include:

The risk: Residential sales values or inflation are lower than expected resulting in shortfall in revenue

Likelihood / Impact: Likely / Major

Continue to monitor advice from residential agents in terms of inflation expectations (but does not say at what cost, if any, such advice will be)

Delay in extinguishment of third-party rights

Likelihood / Impact: Unlikely / Major

The council is to exercise its powers to appropriate for planning purposes which once implemented limit the beneficiaries of the rights to claims for compensation.

 (But do they? One resident on the Aylesbury estate in neighbouring Southwark refused to move out until she got the market rate for her home so she could buy an equivalent property in the area.

What’s to stop the same thing happening on Central Hill, Cressingham Gardens, Fenwick, Knights Walk, South Lambeth and / or Westbury? 

Has anybody in Lambeth Labour actually considered this – or had council officers cost it? Where’s the money going to come from if they haven’t?

Increase in compensation payable for overriding third party rights

Likelihood / Impact: Unlikely / Major

The development appraisals include a budget for payment of compensation claims for over-riding third party rights

HFL Build can elect to actively settle claims or it can elect to settle claims as they are received.

Confusing. Who’s dealing with tenants / leaseholders who stay put? Lambeth council or HfL Build?

Market Context

3.13 Current market conditions are being affected with the uncertainty of Brexit and the impact it may have on the industry. It is envisaged that in the short term build costs will rise slightly and market sales will stagnate.

SO: MARKET SALES WILL STAGNATE IN THE SHORT TERM. MEANING LESS MONEY COMING IN.

However these conditions will also provide opportunities to engage with consultants and contractors that would ordinarily not be available to us. Engage on what? And at what cost? Waffle.

SOME OF THE SPIN CONTAINED IN THE PLAN IS UNBELIEVABLE:

4.2 Homes for Lambeth aims to create homes that will stand the test of time and will help to build communities that will thrive.

THESE THRIVING COMMUNITIES ALREADY EXIST. YOU’RE JUST WRECKING THEM. ON LAMBETH LABOUR’S BEHALF.

Homes for Lambeth will work closely with existing residents to find solutions that are right for them, while also adding to the housing available in our borough.

HAVE HOMES FOR LAMBETH ACTUALLY SAT DOWN WITH DISSIDENT RESIDENTS AND LEASEHOLDERS OR EVEN BEGUN TO UNDERSTAND THEIR CONCERNS? OR UNDERSTAND THE RESULTING LEVELS OF STRESS CAUSED BY LAMBETH LABOUR’S ANTICS? PROBABLY NOT.

Schemes Being Progressed for Development

  • Fenwick – Phase 2 planning and hybrid for estate
  • Cressingham – Phase 1 planning and hybrid for estate
  • Central Hill – Phase 1 planning and hybrid for estate
  • Somerleyton Road – Phase 2 planning
  • A selection of small sites

RESIDENTS OF CENTRAL HILL HAVE NOT HAD A BALLOT ON WHETHER OR NOT THEY WANT THEIR ESTATE DEMOLISHED YET. THE ‘SURVEY’ OF PEOPLE LIVING ON CENTRAL HILL UNDERTAKEN ON BEHALF OF LAMBETH COUNCIL IS, AT THE VERY LEAST, OPEN TO QUESTION.

PEOPLE LIVING ON CENTRAL HILL CLAIM THEY COULD NOT SEE WHAT THE ANSWERS – OR THE ACTUAL FORMS – THE QUESTIONERS WERE FILLING IN.

THE PEOPLE LIVING ON THE FIVE OTHER ESTATES LAMBETH LABOUR WANT TO DEMOLISH WERE DENIED THEIR DEMOCRATIC RIGHT TO A BALLOT BECAUSE OF  SECRET DEALS BETWEEN THE MAYOR OF LONDON AND LAMBETH COUNCIL.

ALL YOUR COMMENTS ABOUT WORKING WITH EXISTING RESIDENTS IN THIS BUSINESS PLAN REPORT ARE NOTHING BUT HYPE – HYPE WHICH  READS IN A REMARKABLY SIMILAR FASHION TO WHAT LAMBETH LABOUR HAVE BEEN SPOUTING..

4.18 The Board of HFL Homes will ensure that the business acts in the best interests of the residents and remains compliant with the regulatory standards.

IN THE BEST INTERESTS OF THE RESIDENTS, PLEASE START WINDING THE ENTIRE CIRCUS UP…..NOW.

OPERATING BUDGETS

7.5 Homes for Lambeth investment in IT systems, software and the routine supply and replacement of IT hardware is assumed to be covered through the SLA for IT support from Lambeth council.

Note that phrase: Assumed to be…” It’s assumed you’re running a business…..A well-used phrase including the words ‘celebration’ and ‘brewery’ springs to mind. (Please see also 8.11 below)

7.6 Any necessary major repairs expenditure on temporary homes is expected to be expensed.

What on earth does that mean? And whose paying for the “expensed”? Lambeth council? HfL? The tooth fairy? 

Dictionary definition of Expensed. Charged to an expense account, reducing the profit for a given project or assignment. The term is associated with charges connected to networking and other events used to attract clients or investors. Expensed items are written off on taxes as they reduce profit.

Expensed financial definition of Expensed – Financial Dictionary

 

7.13 Financial Controls

7: 7. Homes for Lambeth and the council will seek to optimise the use of S106, grant and other similar funding to support the delivery of affordable housing;

(Does this mean ALL section 106 monies from across the whole borough going into Homes for Lambeth for the foreseeable future? If so, no money for libraries etc.)

  1. Homes for Lambeth activities may require council guarantees to support it as a new company;

Says everything doesn’t it? For how long will Lambeth ratepayers be bailing out Homes for Lambeth?

  1. Enabling Activities

People and Resources

8.2 Homes for Lambeth’s Boards have agreed a resourcing plan and associated budget for the period to March 2020. This anticipates an initial staffing complement of c.20 staff resourced through secondments from Lambeth council and interim appointments, rising to a total anticipated headcount of c.26 staff by March 2020.

What if staff don’t want to move, even on a temporary basis? Lambeth council have huge bills for agency staff as it is. Will temporarily transferring staff mean Lambeth having to employ MORE agency staff to cover staff vacancies?  What if the unions ‘black’ the jobs on that basis? What if council officers refuse to work for nothing?

Again, this does not appear to have been thought through.

8.6 Homes for Lambeth needs a clear brand and identity in the market.

It already has a clear brand identity in the market: Demolishing council estates because the council hasn’t spent money on repairs, causing unnecessary worry and stress to PEOPLE living on the six estates Lambeth Labour want to demolish ignoring ALL suggestions – including those of ASH (Architects for Social Housing) because of Lambeth Labour’s closed minds.

8.7 The 2019-20 Homes for Lambeth resource budget approved by the Homes for Lambeth Board is £2.0 million. Notably, c.£1 million of this budget is expected to be re- charged to the council for the provision of development feasibility services.

So: Homes for Lambeth charging Lambeth council around £1 million for the provision of development feasibility services. The report doesn’t explain what these ‘services’ actually are.

8.11 Homes for Lambeth will also implement IT systems in the business plan period and will consult with Lambeth IT as appropriate; these will include data management, business planning, and accounting systems.

Will Lambeth council be charging Homes for Lambeth for the provision of this? Probably not. Missed opportunity of generating extra finance for this poor, financially bedraggled council.

  1. Enabling Activities

Funding

9.4 By March 2020, total loan facilities of £29.1 million will be required; £22.8 million of this is expected to be drawn by this date.

Wonder what interest rate they’re paying? Lambeth council have been talking about borrowing money from the PWLB – the Public Works Loan Board – to then LEND to Homes for Lambeth.

Lambeth need to make some money out of this – plus adding on for (obvious) staffing costs. Has this even been considered?

9.5 In 2019-20 Homes for Lambeth will research the potential for external funding options to inform the future funding strategy.

So: borrowing even more money from sources other than the council. Again, this does not appear to have been thought through. And if it has, heaven help the Lambeth ratepayers.

13.4 The Homes for Lambeth Boards, and the council in undertaking its funding considerations, may seek independent financial or legal advice when considered necessary.

So: Even more fees for consultants.

14.4 All Board Members will receive training across the Business Plan period as required to support the strategic needs of Homes for Lambeth and a skills audit of each Board shall be updated from time to time in order to ensure that each Board is actively considering the skills and experience required for success on a regular basis.

Training. Even more fees for consultants?

14.5 As a group of companies, Homes for Lambeth shall procure a suite of support services from the council such as resident engagement, communications, ICT, and financial services

Free of charge? If not free, how much?

Supporting Strategies (long list) includes Communications Strategy

Don’t communicate with anyone who disagrees with the council in any way, shape or form.

*From the Homes for Lambeth website: Richard Reynolds is Group Chair of Homes for Lambeth, Chair of Local Space, Meridian Home Start and Weald Property Developments and also a Patron of Discover [The Children’s Discovery Centre in Stratford]. Previously Richard Chaired Redrow Homes London, Orbit Homes 2020, Aldwyck Housing Group, Sage Housing Ltd (A Blackstone Company) and was Vice Chair of a London NHS Hospital Trust. He was also a Non-Executive Director at Pinnacle PSG, Breyer Group Plc, Guinness Developments, Guinness Homes, Thurrock Thames Gateway Development Corporation and CityWest Homes. [The City of Westminster’s ALMO]

Before he retired in 2006 Richard was responsible – for nearly 25 years – as Managing Director for all Barratt activity in the East Thames Corridor from and including London to the Kent and Essex coasts.

Richard is a Chartered Surveyor and a Fellow of the Chartered Institutes of Housing, Building, Management and Marketing etc.

There are four HfL companies: HfL Group Ltd; HfL Build Ltd; HfL Homes Ltd and HfL Living Ltd

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.