Haringey Development Vehicle threatens local communities and public assets

27 March 2017

Haringey Green Party is one of a number of organisations, groups and individuals who are mounting opposition to the plans spearheaded by Haringey Council to transfer all publicly owned assets that have any kind of development potential (and probably others, too) to a private company, called the Haringey Development Vehicle.

The plans have been discussed behind closed doors for some time and have come to the attention of the public in recent months as some opposition from within the Council (in the shape of the Housing and Regeneration Scrutiny Committee, the Overview and Scrutiny Committee, the Tottenham Labour Party, the Hornsey & Wood Green Labour Party and both local MPs.

These plans are potentially disastrous; it is anticipated that some £ 2 bn of assets will be transferred. This is on a scale unparalleled anywhere else. The financial risk is immense. The company will be owned jointly be Haringey Council and a private developer. The preferred bidder at this stage is Lendlease.

The key issues with the proposal as we see it are:

  1. Because this proposal effectively binds the council to one development partner for a long period of time (15 to 20 years is talked about), the council is putting itself into a weak position. It would not be able to afford to get out of the deal and if the developer walks away, it has burned bridges with other development partners.
  2. Because this proposals involves giving carte blanche to one private sector outfit, they will have a quasi monopoly position in terms of large scale development in Haringey for a long period of time, giving it the ability to dictate terms to subcontractors (for which read small and medium sized local enterprises). This has to be bad news for local firms and for employment in the sector locally.
  3. Because this proposal involves one large developer, there will be an assumption in favour of large-scale projects rather than smaller scale ones. This is detrimental to small and medium size local enterprises; but it is also bad news for local residents (in the case of housing) and local enterprises (in the case of commercial property) in terms of the options open to them.
  4. Because there has been scant consultation and because there is an assumption of large scale decanting of residents and businesses, the level of disruption that is likely to be caused to local people and local business is not being given significant enough weight in the decision making.
  5. The current model seems to suggest that the Board Members of the HDV that represent the council would be 3 people (of whom 2 would be officers and one would be an elected member). That seems to me to be wholly undemocratic.
  6. The decision is going to be made by the 9-member cabinet of the Council; the other Councillors (all 48 of them) will have no say.

Other such development vehicles (on a much smaller scale) have run into financial difficulties. In Croydon, for example, that has led to the government bailing out the company. The resulting load will have to be paid by the Council for many years.

Some Councils have set up 100% Council owned development companies. This reduces the exposure to international development companies and allows the Council-owned company to deal with a number of developers over time giving some degree of flexibility, competition, and variation in scale to regeneration. Also, any profits made from such developments go back to the Council and thus benefit local people.

Below are a number of links to websites with more information about this issue:

Guardian Article - https://www.theguardian.com/commentisfree/2017/jan/19/lives-torn-apart-assets-labour-privatisation-north-london-haringey

GreenN8 - http://greenn8.org.uk/category/haringey-development-vehicle/#.WNe1VhjMy9s

Crowdfunder for Judicial Review - https://www.justgiving.com/crowdfunding/Haringey-2bn-gamble

Change.org petition - https://www.change.org/p/haringey-council-stop-haringey-council-development-vehicle

OpinioN8 - http://opinion8.ning.com/forum/categories/local-politics/listForCategory



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