Southwark Labour banks £36m meant for affordable homes

Southwark's Labour-run council has banked tens of millions of pounds which should have been used to build more affordable homes, according to a new study.

The cash was paid to the council by developers wanting to buy their way out of a duty to include affordable homes in new schemes. The controversial practice has been widely used in Southwark in recent years, despite fears it is eroding mixed communities and favouring luxury flats over affordable homes.

However the money is still supposed to be specifically spent on providing affordable homes elsewhere in the borough, rather than sitting in the bank.

Now a report by the Bureau of Investigative Journalism has found that Southwark Council is sitting on £36 million of unspent cash collected from developers, which should have been spent on new affordable homes.

Despite over 20,000 households currently registered on Southwark Council's housing waiting list, the current Labour administration has only managed to build 26 new council homes since 2010.

Southwark Liberal Democrats have called on the council to urgently account for all the unspent money and allocate it to specific council housing schemes. They warned that the cash must not be lost to the council's general funding pot whilst there is a desperate need for new homes in the borough.

The council's own planning policies state that on-site affordable homes should be provided in new developments except for in exceptional circumstances, however this has been largely ignored by the Labour Cabinet.

The council recently announced plans to start 318 units by July 2015 - however this would not account for all the money already collected, particularly with more payments from developers on the horizon.

The National Housing Federation responded to the study by saying such high levels of 'commuted sums' in London were "very worrying", adding that "a commuted sum is rarely a reasonable alternative to delivering affordable homes as part of a mixed tenure scheme".

Commenting, Cllr Adele Morris, Southwark Liberal Democrats' Shadow Cabinet Member for Regeneration, Jobs and Affordable Homes, said:

"With thousands of families on the housing waiting list in Southwark, it is shameful that Labour council bosses are stashing away millions of pounds instead of getting it spent as soon as possible. Just stating that they are "going to build" new council homes during the next 30 years isn't good enough and won't help anybody in need of an affordable home now."

"This Labour council should be insisting that affordable homes are included in the developments that are being built right now, not letting developers buy their way out of planning rules. A Liberal Democrat-run council would be on the side of the residents, not the developers."

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