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The gift that keeps on giving

Council responds to the tenants questions about the Heygate estate.

The scandal surrounding the disposal of the Heygate Estate is sadly a gift that keeps on giving.

From the evictions of council tenants and leaseholders and their dispersal wherever (and this was never social cleansing!); to pretty much gifting the land to Lendlease, the 'developer partner'; to allowing unprecedented planning policy 'departures'; to wasting Southwark residents' money to fight Southwark residents in court to prevent them from knowing the truth about 'viability', Southwark's done it all.

Most recently, chair of Southwark's Tenant Council received a response to their questions about the costs incurred around the sale, demolition etc of the estate:

Heygate sold for -£50,000,000.00* -£50,000,000.00
demolition costs -£15,996,000.00 -£65,996,000.00
security costs -£8,315,000.00 -£74,311,000.00
leaseholders buyout -£28,373,000.00 -£102,684,000.00
  -£5,097,000.00 -£107,781,000.00
rehousing council tenants -£5,779,000.00 -£113,560,000.00
all other costs -£1,819,000.00 -£115,379,000.00
  -£419,000.00 -£115,798,000.00
  -£1,635,000.00 -£117,433,000.00
Money received for sale £18,300,000.00 -£99,133,000.00
Money received for demolition £16,499,000.00 -£82,634,000.00

(* the sale of the Heygate wasn't what you'd call a straight exchange, where council said, 'Give us £50M' and Lendlease obliged. To date, the council received £18.3M out of the 50. Another £10.7M is due in 2016/2017, and the final £21M is due between 2017 - 2020. You can download the response below)

So, at the moment, regeneration of a single estate means we who live in Southwark now are £83M short. And the £83M is really just the tip of the iceberg as it does not include the appalling, deliberate loss of council homes (11,000 new ones doesn't begin to address this at all), the despair and anguish caused to one too many former resident who just wasn't good/rich enough, it does not include the catastrophic damage to the environment (trees, 600+ parking spaces), it does not include the scandalous privatisation of public land and public spaces and so on.

From the moment the Labour administration signed the contract in 2010, they spoke about all that huge profit they were going to make at some distant point in the future. This fantasy profit is called 'overage' in formal speak and turns out it isn't likely to happen at all. Some of us have been saying this for a while, as the 'branching out' is what business does to keep the money 'in the house', ie create a myriad of 'children' companies so the parent company (which signed a contract with, say, a local authority partner) itself isn't in fact making any 'profit' so can't share any with the 'partner'.

The council response to the Tenants Council states "the council is entitled to 50% of any profit or planning overage. The sums payable under this heading will only be known when the scheme is fully complete in 2025 and all costs and receipts have been accounted for."

Turns out this isn't quite what the rest of us would call 'true'.

35% campaign have put in a number of Freedom of Information requests about this and got the following answers:

In April 2016, "Please also note that under the terms of the regeneration agreement and profit or planning Overage is only payable to the council at the end of the project. A review of overage will be undertaken at the end of each development phase. Lend Lease have informed the council that no overage is forecast at the end of phase 1 [Trafalgar Place]." (italics are ours)

In June 2016, extract from the Elephant Business Plan quoted the following:


(you can read a lot more about this on the 35% campaign website)

In which universe has this been a success? Or different from all the other 'regeneration' projects Southwark is giving over to 'developer partners' across the borough?




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