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09/04/2018

Haringey and the future of housing regeneration

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A failed challenge to the Haringey Development Vehicle has protected this regeneration model for now, but everything could change for the borough in May’s elections, says V Charles Ward

On 8th February 2018 Justice Ouseley handed down judgment in the case of Gordon Peters v LB Haringey and Lendlease Europe Holdings Limited [2018] EWHC 192 (Admin).

It concerned a Momentum-backed challenge to the Labour council leader Claire Kober’s Haringey Development Vehicle (HDV). The outcome of that case may not yet be known, as the claimant has signified his intention to appeal. But what can be guaranteed is that it will affect all future housing regeneration projects.

The project involved a joint venture between Haringey and Lendlease to deliver 6,400 new homes in the borough, of which 40 per cent would be ‘affordable’. Haringey would provide the land and Lendlease would provide the money and the expertise. The scheme would be delivered through a special purpose limited liability partnership owned 50-50 between Haringey and Lendlease.

In terms of legal structure, the scheme was perhaps no different from the hundreds of successful housing regeneration schemes already delivered by other local authorities up and down the UK. In fact, it is arguably the only way that councils can regenerate run-down housing estates in a way which is not only affordable to the public purse but also guarantees (so far as is possible) that the buildings provided will be kept permanently available to meet long-term housing need. It is not just about the money; it is the fact that any affordable housing which a council built and rented out directly could, within a few years, be lost through the right to buy.

“The scheme was perhaps no different from the hundreds of successful housing regeneration scheme already delivered by other local authorities" 

But by developing through an intermediary non-public sector landlord, any new affordable housing provided would fall outside the Housing Revenue Account and would not be subject to right to buy. Yes, special arrangements would need to be put into place for those former local authority tenants rehoused in the new development who already had a ‘preserved right to buy’. And yes, there is a more modest ‘right to acquire’ for housing association tenants. All that made the Haringey scheme different was its scale and the fact that it was the first to face direct legal challenge.

Leading that challenge was Gordon Peters, a Haringey resident, who was also chair of its Older Peoples Reference Group and a member of ‘Stop HDV’. His challenge was based on four technical grounds.

  • The Localism Act 2011 did not allow councils to trade through limited liability partnerships, only through registered companies.
  • There had been no consultation as required by the Local Government Act 1999 ‘Best Value’ duty.
  • The council had failed in its Equality Act 2010 duties.
  • The July 2017 decision to go into the arrangement should have been taken at full council, not by a cabinet.

Ouseley rejected each of these challenges. The council was not ‘trading’ in its proposed joint venture with Lendlease. Its underlying purpose in entering into the arrangement was to comply with its social responsibilities.

Any ‘Best Value’ consultation would not have taken place at the point the contract was to be awarded but two years earlier at the beginning of the process.

As regards the Equality Duty, it was clear that this had been addressed throughout the decision-making process – and there was no reason to think that someone with a ‘protected characteristic’ would be directly concerned with the mechanics of the process by which the housing was delivered, only its outcome.

Finally, it was entirely appropriate that an operational decision to award a particular contract was taken at cabinet and not full council, as it did not involve formulation of a plan or strategy.

As far as the HDV is concerned, the final outcome of this litigation may be academic if, as is expected, a new Momentum-led administration kills off the project after 3 May’s London borough elections.

It will also be interesting to see what a new Haringey administration puts in place of the HDV to deliver affordable housing. Or will run-down estates just be left to decay?

The current system of public-private estate regeneration may be far from perfect, but it works. And for the time being it is the best we have.

V Charles Ward is a solicitor and legal associate of the RTPI.

Photo | iStock

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