The Castle: Freedom of Information and Commercial Confidentiality at Lambeth Co-operative Council

Lambeth Town Hall

‘Ultimately, I think it’s better to be as transparent and as open as possible, but that does slow things down. But it also means that as we start the consultation residents know that we have looked at all options, that they’ve been robustly tested and scrutinised, and that’s why we can say with confidence that rebuilding is the best option for the residents of Central Hill.’

– Matthew Bennett, Lambeth Cabinet Member for Housing (October 2016)

‘Where estate regeneration takes place there should always be full and transparent consultation. Initial engagement should clearly state any non-viable or undeliverable options which have been discounted and why, and these decisions should be open to scrutiny by residents and other stakeholders.’

– Sadiq Khan, Mayor of London (December 2016)

‘When councils come forward with proposals for regeneration, we will put down two markers based on one simple principle: regeneration under a Labour government will be for the benefit of the local people, not private developers, not property speculators.’

– Jeremy Corbyn, Leader of the Labour Party (September 2017)

In May 2016 Architects for Social Housing (ASH) presented its design alternatives to the demolition of Central Hill estate to Lambeth Labour Council. The result of a year’s work in consultation with the estate residents, our alternative proposed building up to 250 additional dwellings on the estate, partly infill development on land identified as free by the estate residents, partly roof extensions on the existing properties, a proportion of which would be for more council housing, a proportion for private rent and sale, and use the proceeds to fund the refurbishment of the existing estate, whose maintenance the council has neglected for years. We had previously exhibited these designs at a meeting attended by over 120 Central Hill estate residents that February, when we had received their full support; and the campaign to save Central Hill from demolition continues to use them in the defence of their homes. Despite this support, the conditions under which we presented our proposal to Lambeth council three months later were hostile at best, with the venue changed at the last moment to a room without projection facilities; the Chair of the Residents Engagement Panel absent without explanation; not a single Lambeth councillor bothering to turn up, including the local ward councillor and Cabinet Member for Housing, Matthew Bennett; and Lambeth’s Assistant Director of Housing Regeneration, Neil Vokes, leaving for an apparently more pressing engagement after only half an hour.

We weren’t in the least suprised, therefore, when the following month Lambeth’s Capital Programme Manager, Fiona Cliffe, the only Lambeth employee to attend our presentation, issued a terse statement on the council website declaring our proposals to be ‘financially unviable’. In the absence of any invitation to respond, or indeed any communication whatsoever from the council, in September 2016 we wrote our own detailed rebuttal of the miscalculated figures, inaccurate assessments, false claims and deliberate misunderstandings on which this descision had been made. High in the list of mysteries of how the financial unviability of our scheme had been arrrived at were the withheld figures on which the calculations had been based that showed every single one of ASH’s site proposals result in a negative Net Present Value, making it impossible, apparently, to build anything at all that didn’t require the demolition of every one of the 456 homes on Central Hill estate. In order to acquire these figures, therefore, we sent Lambeth Labour council a Freedom of Information (FOI) request. Little did we suspect that this would begin an exchange of letters that continues to this day, some 15 months later, and which would extend to include the Information Commissioners Office and the London Assembly.

This is the story of Lambeth Labour council’s refusal to supply the information on which their plans to demolish Central Hill estate rests and the excuses they have invented for not doing so, each of which flies in the face of the promises of transparency in estate regeneration made by the London Mayor, the Leader of the Labour Party, and indeed by themselves. Lambeth describes itself as a ‘co-operative council’, and in their brochure congratulating themselves on being the first such council to be so they list among their many examples of co-operative behaviours their commitment to ‘follow up requests for information’. Then again, Lambeth Labour council has recently responded to a People’s Audit that found evidence of ‘extensive financial mismanagement and a systemic lack of financial governance’ by appealing to the Conservative government to restrict public scrutiny of local government finances in the future; so let’s have a look at how the co-operative council has responded to more than a year of FOI requests. Like everything to do with London’s estate demolition programme, its a long story composed of numerous sub-plots, all of which lead to a bureaucratic dead end. Writing it – a task I have put off for many months – increasingly reminded me of The Castle, which I have therefore adopted as a title; and as in Kafka’s great unfinished novel, the longer we have approached our destination, the further away it has got.

1. Freedom of Information

Using one of Lambeth Freedom of Information request forms (ref: IR166500), on 25 July 2016 we wrote to the council asking for the viability assessment calculations, figures and assumptions for the proposed estate regeneration schemes at Central Hill estate. Under the Freedom of Information Act 2000, members of the public are entitled to request information from public authorities, including local authorities such as Lambeth council; and public authorities are obliged to publish certain information about their activities. The main principle behind freedom of information legislation is that people have a right to know about the activities of public authorities, unless there is a good reason for them not to. This is sometimes described as a presumption in favour of disclosure, meaning that disclosure of information should be the default response. With this in mind, our Freedom of Information form specifically requested the data relating to the viability assessments made by the chartered surveyors Airey Miller Ltd, who had been employed by Lambeth council to produce a Draft Feasibility Report for the Central Hill proposals by both ASH and PRP Architects – the latter being Lambeth’s chosen architectural practice for the redevelopment. In particular, we asked for:

  • The reasons for the assumptions made by Airey Miller about the percentage of gross rent on the new dwellings assumed for capitalisation purposes;
  • Why these figures for the ASH and PRP proposals are different, when the difference between the two sets of calculations renders the former ‘financially unviable’.

I’ll come back to the details of these figures and what they mean later; but for the moment let’s concentrate on how Lambeth council responded to our FOI request.

2. The Public Interest

Over a month later, on 30 August, we received an e-mail from Sara Thomas, the Complaints and Information Officer at Lambeth council, apologising for the delay in responding, confirming that Lambeth council holds the information requested, but informing us that unfortunately it was not possible to meet our request. The reason this information has been withheld is that under Section 22 of the Freedom of Information Act 2000 the following exemption applies:

In applying this exemption to our request, Ms. Thomas further informed us that she ‘had to balance the public interest in withholding the information against the interest in favour of disclosure’. Factors in favour of disclosure were:

Against which were the factors in favour of withholding the requested information:

ash_2016_08_response-information-exempt_foi_page_2copy.jpg

‘In all circumstances of this case’, the Complaints and Information Officer concluded, ‘the public interest in maintaining the exemption outweighs the public interest in disclosing the information until the scheduled publication date. Therefore, the information is not provided to you.’ However, under Section 16 of the Freedom of Information Act 2000, on the duty to provide advice and assistance, she added that the information we had requested ‘is expected to be published on our website in the next 2-4 weeks.’

3. An Internal Review

Unclear about exactly what public interest could be served by withholding information from the public, we wrote back requesting an internal review of Lambeth’s handling of the request. Following an exchange of e-mails in which the Complaints and Information Officer sent us an incorrectly-typed link to Lambeth council’s Open Data webpage, we made this request on two grounds: first, that the response we had received was late, having taken 5 weeks from the council’s receipt of our FOI request rather than the stiplated 20 working days; and second, that as of the time of writing, 16 September, it was now an additional 4 weeks since the information we had requested in our FOI had been due on the 19 August, and we had still not received the requested information. We also asked the Complaints and Information Officer to clarify how the public’s interest is served by withholding the information pertaining to the viability assessments of the ASH and PRP schemes for Central Hill estate.

In response, on 20 September we received an e-mail containing the correct link to the webpage explaining the principles on which Lambeth council do and don’t release data, plus a guide to transparency in procurement, but nothing containing the information we requested. Finally, the Complaints and Information Officer confirmed that the council was now processing our request for an internal review of our FOI request, but that she would not be carrying it out herself.

On 20 October we wrote back reminding the Complaints and Information Officer a) that we sent a request for a review of our case on 16 September, 5 weeks previously, since when we had heard nothing from Lambeth council; and b) that she had told us in her rejection of our FOI request on 30 August that the information would be published on Lambeth Council’s website in 2-4 weeks – which is to say, by 27 September at the latest, over 3 weeks ago. In response to this letter, on 20 October we received the following e-mail from postmaster@lambeth.onmicrosoft.com, informing us that our e-mail was ‘undeliverable’:

That was the last we ever heard from Sara Thomas, Complaints and Information Officer, Corporate Complaint Unit, Corporate Affairs, Corporate Resources, London Borough of Lambeth. After nearly three months standing outside the Castle petitioning for entry, the door was quietly but firmly closed.

4. The Information Commissioner’s Office

So we turned to the Information Commissioner’s Office (ICO), informing them of our initial Freedom of Information request and Lambeth council’s responses. We sent the official form on 16 November, and nearly 11 weeks later, on 31 January 2017, received a reply from Sophie Turner, a Case Officer at the ICO, apologising for the delay in replying – due, she said, to the large number of cases – and explaining that under the Freedom of Information Act 2000 a public authority is ‘not required to carry out an internal review’. Nonetheless, because the ICO considered it to be ‘best practice’ for one to be completed, the Case Officer had contacted Lambeth council and asked them to issue a response to our request for an internal review ‘within the next 10 working days’ – which is to say, by 14 February 2017. No mention was made of the information we had requested on 25 July 2016, over 6 months before; but as it had to Kafka’s Land Surveyor, by now a explanation of why that information had been refused was beginning to look like real progress.

5. Commercial Confidentiality

The very next day, 1 February, we received an e-mail from Jane Shields, Policy and Communications Manager (FOI Co-ordinator), Corporate Resources, London Borough of Lambeth. She too apologised for the delay in responding to our Freedom of Information request, but she now informed us that all the information we had asked for had in fact been presented to the Residents Engagement Panel on 30 August 2016, and that the process of assessing our proposals had already been explained in the three reviews of our proposals contained on Lambeth council’s webpage.

All these reviews, however, from April, June and October 2016, repeated the same miscalculated figures, inaccurate assessments, false claims and deliberate misunderstandings that we had already pointed out and responded to in our response to the PPR and Airey Miller reports the previous September. It was strange, therefore, to read the Public Participation Consultation and Research (PPCR) review, which is dated 2 October, say that ‘ASH have not responded to the detail of the PRP report’, even more so when we had received no invitation from Lambeth council or themselves to do so. Nor had we been informed of or invited to attend the August meeting of the Residents Engagement Panel at which our proposals were discussed in our absence and at which, according to the Policy and Communications Manager, all the information we had requested was presented. Although the minutes show that this time the local ward councillor and Cabinet Member for Housing was present, no explanation was given as to why ASH was not present to defend our designs against both PRP’s Design Compliance Risk Assessment and Airey Miller’s Feasibility Report, point out the inaccurate assessments, correct the miscalculated figures, explain the deliberate misunderstandings, challenge the false claims, and ask to see the figures and assumptions on which our proposals had been determined as financially unviable. Of course, that’s precisely why we weren’t invited. In our absence, therefore, the Resident Engagement Panel accepted everything they were told by the PPCR team of supposedly ‘Independent Tenant and Leaseholder Advisors’, who had, of course, done nothing either to attain the information we had asked to see or inform us about this meeting.

Moreover, contrary to what the Policy and Communications Manager had asserted, the Airey Miller Feasibility Report presented to the Residents Engagement Panel and eventually sent to us contained none of the information we had requested in our original FOI from July 2016. Indeed, the two versions of the report we subsequently received – the first dated 23 August 2016, the second 16 December 2016 – had no less than 13 pages in the first report (7 on the ASH scheme, 6 on the PRP schemes), and an additional 10 pages on the PRP schemes in the second report, censored:

The reason for redacting this information, the Policy and Communications Manager explained to us, is that Lambeth council ‘consider it is commercially sensitive.’ Engaging Regulation 12(5)(e) of the Environmental Information Regulations (EIR), this part of our request was rejected for the following four reasons:

Untitled

All of which led the Policy and Communications Manager to conclude that Regulation 12 (5)(e) does indeed apply to that part of our FOI request relating to the financial assumptions on which the ASH proposal had been dismissed by the Airey Miller Feasibility Report as financially unviable. Clearly we were dealing with a far more senior employee of the Castle than the previous Complaints and Information Officer, whose clumsy attempts to fob us off with promises of the imminent but infinitely delayed publication of this material online was now denied as ever having been possible under the common law of confidence. And yet, despite this admission, like Kafka’s Land Surveyor we were no closer to gaining access to its secrets. All we knew was what we had always known and were trying to challenge: that the private interests of the Castle always outweigh the public rights of the Village.

6. Financial Discrepancies

The purpose of a financial feasibility analysis, in Airey Miller’s own words, is to establish whether the options proposed could be feasible and deliverable, providing both Lambeth council and the special purpose vehicle Homes for Lambeth (HfL) with an acceptable risk profile and a positive Net Present Value. As the Policy and Communications Manager had clarified, HfL is a commercial enterprise which will operate as an independent entity, with a market position that will attract third parties and suppliers. Profit, not the supply of homes, is its bottom line, which it measures by the Net Present Value of a proposal against future anticipated returns on the investment. If the NPV of a prospective proposal is positive, it stands to make a profit; if it is negative, the cost of implementing the proposal will not be recovered in the future.

Significantly, therefore, the information redacted by Lambeth council contained the rents and operational costs for the ASH and PRP schemes, including the development finance costs, the investment finance costs, the ground rent payments, the residential build costs, the statutory costs (Section 106 agreements and Community Infrastructure Levy), the affordable housing overheads, the maintenance costs, the service charge costs, the council tax costs, the shared equity costs, the refurbishment costs, the demolition costs, the legal fees and the developer’s management fees – among others. In fact, as can be seen on p. 57 of the report, in Airey Miller’s financial feasibility analysis of the ASH scheme, Lambeth council redacted all the figures on expenditure.

What was left, moreover, also made no sense. As we pointed out in September 2016 in our initial response to Airey Miller’s error-strewn Feasibility Report, in their original analysis (below left) of the 30 dwellings we proposed to build above the boiler house (site 1 on the ASH scheme), they managed to lose track of 17 homes in their calculations, which resulted in a Net Present Value of -£2,269,934. Despite their denials, Lambeth council must have read this response because in the August version of the report this had been corrected (below right) to include all 30 proposed dwellings. However, this now resulted in an even greater negative NPV of -£3,589,812. It would appear that, according to Airey Miller, the more dwellings you build the more money you lose – an analysis at odds not only with logic but with the huge profits currently being made by London’s building companies.

But that wasn’t all. Among the few figures not redacted from Airey Miller’s Report were those indicating the gross rent assumed from the respective schemes for the purpose of capitalisation, but here again there were discrepancies between the figures. On an estimated open market value of £624.00 per square foot, the figures for the ASH scheme assumed by Airey Miller were as follows:

Financial Feasibility Analysis: ASH proposal

While for the PRP schemes, using the same market value per square foot, Airey Miller assumed the following figures:

Financial Feasibility Analysis: PRP proposals

In other words, in assessing the financial viability of the PPR schemes over that of ASH, Airey Miller assumed between 5.09% and 9.26% more gross rent from private rentals, and between 8.93% and 12.24% from affordable housing rentals, towards the provision of capital for Homes for Lambeth. No explanation is given or has been forthcoming of the considerable difference between these sets of figures. Now, unfortunately ASH doesn’t have access to the services of a surveyor like Airey Miller, but in the absence of the other figures redacted by Lambeth council we have to assume that the huge differences in Airey Miller’s assessments of the financial feasibility of the ASH and PRP schemes – with the former receiving a negative NPV of -£26,557,743 and the latter a positive NPV of between +£1,801,802 and +£4,871,189 – has something to do with the unexplained difference between their assumptions of what percentage of rent would go to financing each scheme.

Not only that, but while the ASH scheme has been assessed on Lambeth council’s requirement that 40% of the 250 new dwellings (i.e. 100 flats) are for council rent, only 1 of the 7 options proposed by PRP Architects (Option B) provides 40% affordable dwellings, and in each of them their affordable housing provision includes the re-building of the 320 homes for council rent the PRP schemes require to be demolished. In other words, while the ASH scheme – which retains and refurbishes the 456 existing homes, of which 136 are owned by leaseholders and 320 are for council rent – is assessed on the provision of 100 flats for council rent on the 250 new dwellings, in the PRP schemes the affordable housing quota includes the reprovision of the homes the scheme demolished. Here are the figures from the August 2016 version of the Airey Miller report (every version has wildly different figures for the proposed options, but the method of calculating the percentage of affordable housing in each remains the same):

  • Option A proposes 1,144 dwellings, 320 for replaced council rent, 615 for private sale, 109 shared equity, and 100 for Local Housing Allowance – which is to say, met by Housing Benefit: a total of 28% for council rent.
  • Option B proposes 1,058 dwellings, 320 for replaced council rent, 529 for private sale, 109 for shared equity, and 100 for new build council rent: a total of 40% for council rent.
  • Option C proposes 1,268 dwellings, 320 for replaced council rent, 556 for private sale, 183 for private rent, 109 for shared equity, and 100 for new build council rent: a total of 33% for council rent.
  • Option D proposes 1,530 dwellings, 320 for replaced council rent, 765 for private sale, 246 for private rent, 109 for shared equity, and 100 for new build council rent: a total of 28% for council rent.
  • Option E proposes 1,444 dwellings, 320 for replaced council rent, 689 for private sale, 226 for private rent, 109 for shared equity, and 100 for Local Housing Allowance: a total of 29% for council rent.
  • Option F proposes 1,072 dwellings, 320 for replaced council rent, 543 for private sale, 109 for shared equity, and 100 for new build council rent: a total of 39% for council rent.
  • Option G proposes 1,278 dwellings, 320 for replaced council rent, 565 for private sale, 184 for private rent, 109 for shared equity, and 100 for new build council rent: a total of 33% for council rent.

By these definitions of affordable housing provision, the ASH scheme proposes a total of 706 dwellings, 320 existing for council rent, 136 existing for private sale, 125 for private rent, and 125 for new build council rent: a total of 63% for council rent, double most of the PRP schemes.

In reality even this isn’t accurate, as Homes for Lambeth developments will operate as housing associations, so the new dwellings will let on an assured, not secure, tenancies; Lambeth council has already indicated that the social rents will increase by between 10% and 25% on the existing council rents; and the Key Guarantees’ on which the scheme was sold to residents two years ago have already been reduced to principles’. But leaving aside the increase in rents and decrease in tenancy rights the PRP schemes will enforce, not one of them has been assessed for their financial feasibility on the same terms as the ASH scheme: not with the same percentage of the rents going to fund the scheme, and not with anything like the same percentage of homes for council rent in the regenerated estate. And yet this report by Airey Miller has been presented by Lambeth council as the grounds on which ASH’s proposal has been rejected as ‘financially inviable’. Perhaps, like Kafka’s surveyor, we shouldn’t be suprised that our application to enter the Castle was rejected, as who knows what other financial discrepancies we would discover within its walls?

In fact, some campaigners have managed to penetrate its defences for a few days. According to the People’s Audit of Lambeth council’s accounts for 2015-16, the co-operative council has doubled the funds available for their new town hall from its original budget of £50 million to £104 million, with the increase being taken out of rent supposedly ring-fenced in the Housing Revenue Allowance for estate maintenance; sold council land to developers at a £1 million subsidy and without competitive tender; over-paid building contractors many times over for major works on council estates out of the service charges of leaseholders; spent £13 million on corporate office accomodation; another £10.3 million on making 744 council staff redundant – 593 of whom were earning £20,000 or less; but employed an additional 88 senior managers earning between £50,000 and £150,000 at a cost of at least £5.5 million to the annual wage bill; blown £26 million on temporary accommodation in 2014-15 while pursuing plans to demolish 6 council estates in the borough; and allocated £7.5 million to Homes for Lambeth in order to make the schemes for their redevelopment appear to have a positive Net Present Value over the next 60 years.

7. The London Assembly

We weren’t surprised, of course, as absolutely nothing by now would surprise us about Lambeth Labour council, whose reputation as one of the most mismanaged, unaccountable, incompetent, obstructive and corrupt councils in London the People’s Audit has shown to be well earned. But that didn’t mean we accepted its attempts to deny us access to information about its financial miscalculations. Our next port of call, therefore, was the London Assembly, and specifically Azzees Minott, the Research Support Officer for Siân Berry, the Green Party’s London Assembly Member and Chair of its Housing Committee, who has been involved in the fight to save Central Hill estate from Lambeth Labour council.

The previous August London’s Labour Mayor, Sadiq Khan, had announced the formation of a specialist Homes for Londoners team to scrutinise viability assessments. Unfortunately, this team appears to be composed of the same finance surveyors and property consultant experts that are writing viability assessments such as Airey Miller’s to push through estate demolition schemes with as little council housing provision as possible; but undeterred, on 12 February we wrote to the Research Support Officer explaining in slightly less laborious terms what I have explained here, and asking whether anyone at City Hall would be able to explain to us why – for example – the construction of 30 flats on and around the existing boiler house on Central Hill estate (site 1 in the ASH scheme) is not only not feasible, but would incur a Net Present Value of -£3,589,812, a figure that would suggest it is impossible to build any new homes in London except on land cleared of demolished council flats. In the light of the Mayor’s publically stated desire for greater transparency in estate regeneration, we also asked whether he or someone else at City Hall could explain why what is effectively the stock transfer of millions of pounds of public housing into private hands should not be subject to public scrutiny; why it is in the public interest that the figures and assessments on which ASH’s alternative to the demolition and privatisation of Central Hill estate has been deemed unviable be kept secret; and why the commercial confidentiality of private sector development partners should take precedence over the rights of the general public to know why public assets are being sold to those private partners by public authorities.

Some 9 months after our Freedom of Information request, therefore, on 16 March the Research Support Officer sent the same request to the same department of Lambeth council. Unsurprisingly, a month later, on 13 April, she received exactly the same reply that we had received from the Policy and Communications Manager, who had clearly updated the FOI team on the correct way to refuse our request. By then, however, it was all academic. At a Cabinet meeting held on 23 March Lambeth council made the decision to demolish and redevelop Central Hill estate. The council’s delaying tactics had worked.

8. Full Transparency

As I said at its beginning, like Kafka’s novel this story has no end and no conclusion; but like historians who pore over train timetables to Treblinka to show how many people were on the train when it went in and how many when it came out, FOI requests are one of the only records we have of how the social cleansing of Inner London through estate demolition is being perpetrated before our eyes and with the full collusion of the state. Private Eye, which keeps track of the effects of Lambeth council’s final solution to the housing problem in its ‘Rotten Boroughs’ column, has expressed an interest in this story – satire being what the English have recourse to in place of accountability – so this may not be the last we hear of the social cleansing of Central Hill estate; but satire, in this context, feels like re-arranging the deckchairs on the Titanic to spell out amusing final words.

On our suggestion, however, the Research Support Officer also e-mailed the Greater London Authority’s Homes for Londoners team, in response to which she received the following message from an unnamed member of that team:

https://www.london.gov.uk/contact-us-form

And here was included the link – correctly typed this time – to another official form, the third we have received in our attempt to gain entry to the Castle.

By now our steps were faltering, the snow weighed heavy on our feet, and the path before us was fading in the dark. Then on 9 May, at a meeting about whose farcical proceedings we wrote a long letter of complaint to the council’s Head of Legal Services, Lambeths Overview and Scrutiny Committee approved the decision to demolish and redevelop Central Hill estate. A week later the Research Support Officer wrote once again to the council to request an internal review of our original Freedom of Information request. She listed the reasons for requesting this review 9 months after it had been refused by the FOI team as follows:

  • That she was not satisfied that the information which had been redacted and omitted from the Airey Miller report falls within the guidelines of what is commercially sensitive.
  • That the Homes for Lambeth special purpose vehicle set up and financed by Lambeth council is a publically owned organisation and should therefore be subject to public scrutiny, as well as complying with the test for disclosure in the public interest set by the Information Commissioner’s Office.
  • That the information on which Lambeth councils decision to demolish Central Hill estate is based should be disclosed because there is a public interest in the decision, because there is public interest in the information on which it was based, and that a full picture of the decision should be presented in the interest of full transparency.

Here the Research Support Officer was quoting the London Mayor, who in December 2016 had published his Draft Good Practice Guide to Estate Regeneration, in which the chapter devoted to good practice in Consultation and Engagement with Residents stated:

‘Para 18. Where estate regeneration takes place there should always be full and transparent consultation.

‘Para 20. Transparent – all the issues and options should be set out in clear, understandable language, with information that has influenced any decisions being shared as early as possible.

Para 23. Initial engagement should clearly state any non-viable or undeliverable options which have been discounted and why, and these decisions should be open to scrutiny by residents and other stakeholders. Relevant information that has influenced any decisions on options should be shared as early as possible.

The matter could only be stated more clearly if the Greater London Authoritys indicative should became a compulsory must; but even within the limits of the Mayors powers over local authorities, how did Lambeth co-operative council manage to refuse yet another request for transparency in its financial dealings?

9. Private Sector Development Partners

Two weeks later, on 24 May, a three-page letter arrived in the Research Support Officer’s inbox. Recalling that the decision to demolish Central hill estate had already been made and confirmed by Lambeths Cabinet and Overview and Scrutiny Committee, the Policy and Communications Manager repeated that although the council will hold all the shares in the company, Homes for Lambeth will be required to operate as a commercial enterprise and to function on a commercial basis, as an independent accounting entity, and with its own operating board. For reasons she didnt go into, this means it cannot only deliver affordable housing, but must deliver the new developments on a commercial basis – at the very least breaking even, and preferably, she writes, aim to make a surplus. To this end the company will need to enter into commercial deals with other land owners, energy suppliers and development partners, raise funds from the City and enter into investment agreements with financial organisations. Once preparatory work is completed and planning consent granted, she concludes, Lambeths estate regeneration programme will be carried out by Homes for Lambeth on a commercial basis.

Were familiar by now with what this means. Before Homes for Lambeth was a glint in the eye of Lambeths Cabinet Member for Housing, Myatts Field North estate in Brixton was partially demolished and redeveloped in 2012 in a Private Finance Initiative between Lambeth council and private consortium called Regenter, a joint venture between infrastructure managers John Laing and the Pinnacle Regeneration Group, which subcontracted the work out to Higgins Construction, Rydon Maintenance, Pinnacle PSG management company and E.ON, the German power company. 305 of the estate’s homes were demolished, with the 58 leaseholders offered on average £114,500 compensation for their homes, nothing like enough to buy a home on the new development, where a 2-bedroom apartment was recently on sale for £595,000, and many elderly leaseholders were unable to get a new mortgage. Following the new coalition government’s reduction of funding to PFI deals, £16.8 million was cut from the budget in 2011 and the council had to hand Regenter £8m worth of land in compensation, as well as increase the proportion of properties for private sale on the new development. Now retitled Oval Quarter, the estate has 808 new flats, 305 of which are rebuilt council flats, and 503 properties for private sale, 105 of which were for shared ownership. Not a single new flat for council rent was built. Lambeth received a share of the profits from the sale of the private properties, but how much, of course, is commercially confidential. And in common with all PFI deals, the interest on the upfront loan from the private sector was charged at a much higher rate, costing Lambeth council close to £5 million between 2005 and 2012, when construction began.

The 172 council homes on Myatts Field North estate that werent demolished were refurbished to the Decent Homes Standard by Rydon, the company contracted by Kensington and Chelsea Tenant Management Organisation to refurbish Grenfell Tower; and the same complaints by residents who died as a direct result of that refurbishment have been made by residents of Oval Quarter to Lambeth council, including faulty electric sockets and dangerous wiring, water leaks, damp and mould, a lack of noise insulation in walls and floors, a lack of wheelchair access, a lack of fire risk assessments and other breaches of health and safety regulations, infestations of vermin and water shortages, delays in essential repairs that ran into months and even years, weeks without hot water, a central heating system that broke down 48 times in the first four years, as well as being trapped in 25-40 year contracts with the suppliers, E.ON, that have driven many of them into fuel poverty. And like the residents of Grenfell Tower they have been ignored for the past three years by the council, which has handed over the running of the estate to Regenter, which has in turn subcontracted out the servicing and maintenance of the estate to Pinnacle PSG. This is what development on a commercial basismeans.

No wonder, then, that in her letter to the GLAs Research Support Officer, Lambeth councils Policy and Communications Manager maintained that the financial assumptions and approaches adopted by Homes for Lambeth on Central Hill estate is, in her words, commercially sensitive data that, if disclosed, would seriously prejudice the future operation of HfL – though not, as she argues, on its ability to negotiate appropriate deals. Private sector development partners and investors are queuing up to get a piece of the estate regeneration cake. But rather, because it would seriously prejudice Lambeth councils ability to dupe residents into voting for the demolition and redevelopment of their homes, and to dismiss design alternatives like those proposed by ASH based on inconsistent and unlikely figures whose fabrication is withheld from public scrutiny.

As for the public interest in disclosure, the Policy and Communications Manager noted that the proposed regeneration of Central Hill estate is of concern to residents – although she says nothing about the concerns of the general public – and that the council should be as transparent as possible; but she nevertheless considered that the information on the councils website – none of which answers the questions that our Freedom of Information request asked – constitutes reasonable disclosure.

Having got the question of how a publically owned company can withhold commercially sensitive information out of the way, the Policy and Communications Manager then went on to note the public interest in maintaining the exception to the presumption in favour of disclosure. This interest is apparently constituted by the fact that:

  • The withholding of this information has not precluded Lambeth council from already having undertaken a programme of consultation with residents (although she does not say what value that consultation could have in the absence of this information other than to deceive residents about the options available to them);
  • The financial viability of the scheme is not the only grounds determining whether the regeneration of Central Hill estate should proceed (indeed it isnt, and we have discussed whay should be the other determining factors in considerable detail in our criticisms of Lambeth councils Criteria for Estate Demolition, where we addressed the social, economic and environmental costs of the councils plans, but to which, typically, the council has not responded);
  • Lambeth councils estate regeneration programme involves the very substantial commitment of public resources to a construction costs in excess of £1 billion (which sounds like an argument in favour of public disclosure, not an exemption);
  • Between 3,000 and 4,000 homes are at stake in the delivery of the programme (although the Policy and Communications Manager doesn’t clarify whether these figures refers to the council flats under threat of demolition by this programme or the private properties Homes for Lambeth wish to build in their place, this, again, sounds like an argument in favour of disclosure);
  • Lambeth council must be able to maximise the ability of Homes for Lambeth to secure financing of the programme from private sector development partners;

From this last consideration, writes the Policy and Communications Manager, two points arise:

ASH_2017_05_24_LBH to azzees-3(a)

Although the Policy and Communications Manager doesnt say so, AMP is the Property Asset Management Plan 2012-17, which has been superseded by the Asset Management Strategy and Policy 2016-2021. What she also doesnt explain is why information should be commercially sensitive to private sector development partners – unless, of course, that information is inaccurate or deliberately fraudulent; or because it justifies the demolition of council housing that could and should be refurbished and maintained; or because it results in jerry-built, state-subsidised, developer-led schemes like Oval Quarter. The desire of private sector development partners to hide such information on the threat of withdrawing funding for what are still, in effect, PFI deals should be an argument in favour of disclosure in any proposed housing development – let alone one based on the demolition and privatisation of publically owned assets; let alone one that will receive millions of pounds of public funding.

Again, it is not made clear why the best terms for financing the regeneration of council estates can only be negotiated by hiding the sources of funding, or why the revelation of those sources should undermine such negotiations – unless, of course, those sources have something to hide. The Panama Papers have revealed something of just how much dirty money is laundered through London, and in particular through London property purchased through offshore companies, which accounts for the boom in prices that has caused the current housing crisis. But we should expect our public bodies – whether local authorities like Lambeth Council or the Greater London Authority – to require transparency and scrutiny of those sources, not cave in to the threats of private companies that use the catch-all exemption of commercially sensitivityto manipulate viability assessments in their favour. Of course, at ASH we expect no such thing – and certainly not of Lambeth council, which jostles with Southwark council for the title of Londons most corrupt – but if there is any substance to the Mayors words, the Greater London Authority should compel all local authorities – starting with Lambeth council – to make its financial negotiations public, and end the culture of commercial confidentiality that has created the housing crisis in London.

As an indication of who these private sector development partners will be on the Central Hill estate regeneration, for their imaginatively fabricated Feasibility Report Airey Miller was awarded a five year contract worth £6.4 million as strategic commercial and technical adviser to Lambeths estate regeneration programme. Significantly, the terms of this contract specifies that although £1.2 million of the fee will be paid up front for the financial year 2017-2018, the on-going funding of these services beyond 2018 will depend upon recouping these costs through Homes for Lambeth. Once again, this is what development on a commercial basismeans: turning a profit for investors, not making a home for residents.

And for producing its wildly inaccurate Design Compliance Risk Assessment of the ASH scheme, PRP Architects will expect to be awarded the contract to design the redevelopment of Central Hill estate according to one of their numerous proposals. PRP Architects are the favoured practice of Lambeth council, having previously designed the redevelopment of the demolished Myatts Field North estate in Brixton as Oval Quarter; and they have a rapidly increasing portfolio of estate regeneration disasters. The redevelopment of Mardyke estate in Havering into Orchard Village already has residents calling for its demolition because of a myriad of problems, including damp, mould, leaking sewerage, faulty heating and absent insulation. And when a member of ASH went to photograph the new properties recently for the exhibition of our work at the ICA, the cladding from the external walls was being removed, presumably because it constituted a fire safety risk comparable to that on Grenfell Tower. In compensation for having to live in these architect-designed slums, leaseholders and shared ownership buyers have been offered £1,000, with social housing tenants being granted the grand sum of £100. The compensators, Clarion Housing Group, which formed last year from the merger of Sutton and Circle Housing and is now the UKs largest housing association, received £31 million of public money – £12.4 million from the Homes and Community Agency, £18.8 million from the Greater London Authority – towards the costs of the £80 million redevelopment, and has received a further £1.1 billion in public funds to buy land in order to build more such developments, with 500 more properties planned in the borough of Havering alone. PRP also designed the redevelopment of the Wornington Green estate in Kensington and Chelsea into Portobello Square, where residents are, once again, complaining about a familiar range of problems, from poor build quality, leaking ceilings, damp walls and mould, to collapsing floors, faulty electric wiring and a lack of maintenance and repairs in a development in which a 1-bedroom apartment sells for £620,000.

With private sector development partners like Airey Miller and PRP Architects, is it any wonder that Lambeth council is so keen to remove scrutiny of their proposals? To which end, the Policy and Communications Manager, Bachelor of Law (LLB) and Master of Law (LLM), concluded that Regulation 12(5e) of the Environmental Information Regulations – the same regulation she had quoted three months earlier – should continue to be engaged to this request. The letter ends:

Lambeth – the co-operative council

10. Financial Viability

Notwithstanding the reasons for redacting the figures on which our scheme had been rejected, Lambeth council’s Policy and Communications Manager still hadnt answered the question that we had posed in our Freedom of Information request a year before, about the reason for the difference between the percentage of gross rent assumed for capitalisation purposes on the ASH and PRP schemes – figures which are not redacted, but which have never once been explained in any of the council’s responses to our FOI request, and which we had been advised may be one of the reasons why the building of new dwellings is financially viable when they’re designed by PRP, but financially unviable when they’re designed by ASH.

In the absence of the withheld figures, ASH has made our own estimates of some of the costs of the PRP schemes. In a report on estate regeneration to the Cabinet Office published in January 2016, Savills real estate firm, which is advising Lambeth council on setting up Homes for Lambeth, estimated the cost of demolishing council homes at £50,000 per home. This means that demolishing the 456 council homes on Central Hill estate will cost Lambeth council £22.8 million. And at an average construction cost of between £225,000 and £240,000 per home – a figure quoted to ASH by Karakusevic Carson, the architectural practice working on Lambeth council’s Fenwick estate redevelopment scheme – rebuilding the 456 existing homes alone will cost between £100 million and £110 million. So that’s up to £143 million before a single additional property is built on any PRP scheme.

By contrast, Robert Martell and Partner, an independent firm of chartered surveyors, has undertaken a pricing of ASH’s design proposals, and have costed the 250 new builds at £45 million. Lambeth council’s own surveyor has estimated the cost of refurbishing the 456 existing homes at £18.5 million – around £40,000 per home, £10,000 less than the cost of demolishing them – of which £6.2 million for internals is covered by government funding for the Decent Homes Standard. Together with external works and services, professional fees and contingency funds, the ASH scheme has been costed by Robert Martell and Partner – in a report which, unlike Airey Miller’s Feasibility Study, is available to the public unredacted – at a total of £77.5 million, nearly half the cost of merely demolishing and rebuilding the existing homes in every one of the PRP schemes.

And yet, somehow, it’s the ASH scheme that has been assessed as financially unviable by Lambeth’s surveyors and newly-appointed strategic commercial and technical advisers. Behind their cloak of commercial confidentiality Airey Miller have shown themselves to be imaginative and inventive prestidigitators of accounting, but until they demonstrate how this can be the case in the broad light of public scrutiny, we don’t buy it.

11. In the Light of Grenfell

We were nearly done. Looking up, the Castle still loomed above us, but more distant now. The road, which had been heading directly towards it, had sloped away, and we now found ourselves heading down a side path spattered with slop thrown from the battlements above. Had we taken a wrong turn? We pulled out the letter from the Policy and Communications Manager, and in the fading light read:

Retracing our steps to the Village Inn, we took out a stub of pencil and on 18 June wrote once more to the Research Support Officer. We were assembling a comprehensive document containing every letter exchanged since we sent in our FOI request the previous July; did she have the personal contact details of someone on the Greater London Authority’s Homes for Londoners Financial Viability Expert Team to whom we could write directly? No, the only way to contact them was through the official form she had sent us. The candle sputtered and went out. But there was one glimmer of hope in the night that was now falling. On 4 August the Research Support Officer informed us that despite being Chair of the Housing Committee, the Green Party’s London Assembly Member didn’t have the capacity to force Lambeth council to disclose the information requested on our Freedom of Information form; however, she suggested we write to the Information Commissioner’s Office directly, as the Commissioner had recently published an ICO blog post responding to the calls for more transparency in light of the Grenfell Tower tragedy’.

In this post, published on 2 August and addressed to local authorities, the Commissioner wrote that in the wake of the Grenfell Tower fire public bodies are forced to look at all aspects of their roles and responsibilities and evaluate how their practices can be improved. As the independent regulator of the Freedom of Information Act, the Information Commissioners job is to ensure people have easy access to records they are entitled to see. Now, the specific context of this statement is the lack of availability of information about fire safety from councils and other public authorities responsible for public housing; but the issue of transparency in public bodies, she argues, has a wider relevance to social housing:

Screen Shot 2017-10-30 at 17.01.50Screen Shot 2017-10-30 at 17.01.50bScreen Shot 2017-10-30 at 17.02.12c

If we can take the Research Support Officer’s advice and address the Information Commissioner’s Office directly, we’d like to take this opportunity to remind her that the Grenfell Tower fire was the direct result of an estate regeneration scheme executed by private companies subcontracted to do so for the cheapest possible price by other private companies contracted by the kind of public-private management organisation Lambeth council wants to put in place with Homes for Lambeth. In the wake of Grenfell, how can any council continue to hide its financial deals with private sector partners behind the cloak of commercial confidentiality? According to the councils own website, Homes for Lambeth will establish housing associations on land cleared of demolished council estates. Who can deny that it is not in the public interest to know the corners being cut by the kind of private deals that made the Grenfell Tower fire a disaster waiting to happen, when those same deals are being withheld from public scrutiny on every estate regeneration scheme that demolishes council homes and replaces them with developments built and managed by private companies? What is the commercial confidentiality of Lambeth council’s private sector development partners worth compared to the public’s right to know that the redevelopment of Central Hill estate wont be another Grenfell Tower – or even an Oval Quarter, that their homes and lives arent being placed into the hands of an organisation as unaccountable, incompetent and criminally negligent as the Kensington and Chelsea Tenant Management Organisation? To this end, we will be sending this report to both the Greater London Authority and the Information Commissioners Office, and will await their replies.

12. The Castle

As I wrote at the start of this text, I have put off writing this report for months, even though it is the last instalment in the collection of texts that will constitute our study Central Hill: A Case Study in Estate Regeneration, which we will publish as an example of how council estates can and should be regenerated – rather than socially cleansed, demolished and redeveloped – and how our attempt to do so has been sabotaged at every turn by Lambeth council. The more than two years of work by ASH that ended with Lambeth council condemning the estate to redevelopment was not something to which I wanted to return, least of all through the bureaucracy of our Freedom of Information request; until, that is, the memory of Kafkas novel came back to me.

Kafka is widely regarded as a prophet of the crimes and horrors of the 20th Century he didnt live to see. But there is a body of readers who insist on his dark humour, particularly in the original German. Eastern Europeans, apparently, found him hilarious, no doubt because he so accurately anticipated and described the bureaucratic small mindedness of the administrators of the totalitarian state. But just as there was nothing humourous about their lived experience of this state, so we found little humour in the efforts of Lambeth councils bureaucrats to thwart our every attempt to save Central Hill estate from the bulldozers.

Despite this, writing this account of those attempts I have frequently laughed out loud at the absurdity of this story. Unlike satire – which is the smirking in-joke of graduates about something their salaries exempt them from ever experiencing – the absurd embraces the full frustration, and desperation, and anger, and the very real consequences of what it describes; but that description is conditional on its distance from those consequences. Although our efforts to have our FOI request answered continue, that distance has allowed me to appreciate something of the absurdity of this story. But there is nothing humourous about our public authorities demolishing thousands of council flats in the name of addressing the crisis of affordable housing; there is nothing amusing about single mothers who refuse to be rehoused outside London being declared to have made themselves intentionally homeless; there is nothing funny about someone on Universal Credit having to wait 6 weeks for the money they have to pay on their privately rented room every 2 weeks or be evicted; there is nothing comical about someone being fined £100 for begging on the street to pay for a night in a homeless hostel. The final joke is the homeless man who, recently arrested for sleeping in doorways, begged the judge to send him to prison so he could wake up on his birthday somewhere warm. Beyond even this absurdity, of course, is the states response to the Grenfell Tower fire, which as we once predicted is proving to be every bit as negligent and corrupt as the corruption and negligence that caused it. Satire, which is the favoured political mode of the British middle classes, is unequal to the task of responding to the absurdity of the political and economic system that produces such social inequalities in 21st Century Britain. This is a world only Kafkas novel can describe:

‘You are very strict,’ said the Superintendent, ‘but multiply your strictness a thousand times and it would still be nothing compared with the strictness that the Authority imposes on itself. Only a total stranger could ask a question like yours. Is there a Control Authority? There are only control authorities. Frankly, it isn’t their function to hunt out errors in the vulgar sense, for errors don’t happen, and even when once in a while an error does occur, who can say finally that it is an error?’

‘And now I come to a peculiar characteristic of our administrative apparatus. Along with its precision it is also extremely sensitive. When a case has been weighed for a very long time, it may happen, even before the matter has been fully considered, that suddenly in a flash the decision comes in some unforeseen place which, moreover, can’t be found any longer later on, a decision that settles the matter, if in most cases justly, yet all the same arbitrarily. It’s as if the administrative apparatus were unable any longer to bear the tension, the year-long irritation caused by the same case – probably trivial in itself – and had arrived at the decision all by itself, without the assistance of the officials. Of course, a miracle didn’t happen and certainly it was some clerk who arrived at the solution or the unwritten decision; but in any case, it couldn’t be discovered by us, at least by us here, or even by the Head Bureau, which clerk had decided in this case and on what grounds. The Control Officials only discovered that much later, but we will never learn it; besides, by this time it would scarcely interest anybody. Now, as I said, it’s precisely these decisions that are generally excellent. The only annoying thing about them – it’s usually the case with such things – is that one learns about them too late, and so in the meantime one keeps on still passionately canvassing things that were decided long ago.’

‘To be honest, it was a wild and senseless plan, even if the impossible should have happened, and his petition had really reached an official’s ear. For how could a single official grant an exception? That could only be done at best by the whole Authority, and apparently even the Authority can only condemn and not pardon. And in any case, even if an official was willing to take up the matter, how could he get any clear idea of the case? Officials are highly educated, but one-sided; in his own department an official can grasp whole trains of thought from a single word, but let him have something from another department explained to him by the hour, and he may nod politely, but he won’t understand a word of it. That’s quite natural; take even the small official affairs that concern the ordinary person – trifling matters that an official disposes of with a shrug – and try to understand one of them through and through, and you’ll waste a whole lifetime on it without result. But even if he had chanced on a responsible official, no official can settle anything without the necessary documents; he can’t pardon anything, he can only settle it officially, and he would simply refer to the official procedure, which had already been a complete failure.’

‘The Land Surveyor begs the Director to grant him a personal interview; he accepts in advance any conditions which may be attached to the permission to do so. He is driven to make this request because until now every intermediary has completely failed; as proof of this he advances the fact that until now he has not carried out any surveying whatsoever, and according to the information given to him by the village Superintendent, he will never carry out such work; consequently, it is with humiliation and despair that he has read the last letter of the Director; only a personal interview with the Director can be of any help here. The Land Surveyor knows how extraordinary his request is, but he will exert himself to make his disturbance of the Director as little felt as possible; he submits himself to any and every limitation of time, also to any stipulation which may be considered necessary as to the number of words which may be allowed him during the interview; even with ten words he believes he will be able to manage. In profound respect and extreme impatience, he awaits your decision.’

‘One could make an effort to keep the true situation secret from the member of the public. The member of the public will hardly notice anything of his own accord. As he sees it, he went into a room that wasn’t the one he wanted, probably quite by chance; tired out, disappointed, feeling dull and indifferent from weariness and disillusionment, he is sitting there knowing nothing and deep in thought – if he is thinking anything at all – of his mistake or his weariness. Could one not leave it at that? One cannot. With the loquacity of the happy man, one must explain everything to him. Without sparing oneself in the slightest, one must show in detail what has happened and why, how extraordinarily rare and uniquely great the opportunity is; one must show how the member of the public who, with all the helplessness of which only a member of the public is capable, has stumbled on this opportunity; one must show him, Mr. Land Surveyor, how the member of the public can now control everything if he wants to, and need do nothing more than somehow or other make his request; there is a document for granting it already prepared, one says, ready to be handed to him – one must show him all this. It is a dark hour for an official. But when one has done all that, Mr Land Surveyor, all that is most necessary has been done, and one must resign oneself and wait.’

– Franz Kafka, The Castle (1926)

Architects for Social Housing

2 thoughts on “The Castle: Freedom of Information and Commercial Confidentiality at Lambeth Co-operative Council

  1. Its great we have people like ASH on the job of uncovering the iniquities of the forces of oppression that hide in the thickets of local and other bureaucracies. “miscalculated figures, inaccurate assessments, false claims and deliberate misunderstandings” indeed!!

    Like

  2. Well done! ASH I’d love to print hard copies of this. You’re great at putting across the indifferent that Lambeth Council are.
    There’s so much pumped into the zregeneration team on Central Hill. When I mentioned that we are not allowed to build a case against demolition, the person immediately jummped up and said, ‘What do you mean the ASH proposals?’ redy to engage in a debate. I said, ‘Thousands of pounds have been spent on the regeneration, why can’t we have even a couple of thousand to look at alternatives?’ That shut them up. Another instance, if you allow me, was during the decision being made at Cabinet, we produced a survey counteracting their survey which showed most were in favour of demolition (whereas ours were strongly opposed), and Lib Pecks hapless words were ‘So more consultation then.’!
    Well-written and informative – ref to Oval Quarter is this Myatt’s Field.

    Like

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