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Council to fold housing company back in-house after review slams ‘very poor’ delivery
Lambeth Council is planning to fold its housebuilding company back into the local authority after a review slammed its “very poor” delivery.
The review, commissioned by the council in July to understand how it could speed up affordable homebuilding and manage net zero costs, revealed that Lambeth is one of the lowest performing boroughs in London in terms of delivery against its council housebuilding programme.
Undertaken by Lord Kerslake, the review also found that residents, particularly on estates, have not been treated well by the council.
As a result, the review recommended a complete reset of resident engagement and that Homes for Lambeth (HfL), Lambeth’s wholly owned housing company, be consolidated into the council in two or three years.
The HfL Group has three subsidiaries: HfL Build, HfL Homes and HFL Living, which cover construction, leasing and housing management.
The report said both HfL Homes and HfL Living should be wound down.
The council set up HfL in 2017 with the aim of leading on its estate regeneration programme.
The programme, in some cases controversial, is focused on six estates: Westbury, Knights Walk, South Lambeth, Central Hill, Cressingham Gardens, and Fenwick.
It completed its first homes in May 2021 on the Westbury Estate.
To date, HfL has only started 65 homes through direct delivery.
“This is despite Lambeth Council having invested £30m to date in the set up and running of HfL, as well as providing development funding and meeting the costs of buying out leaseholders,” according to the report on the review.
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The report praised Lambeth Council’s planning department for approving more than 2,400 affordable homes since 2017 and its ambition to reach net zero by 2030.
But it said the performance through HfL’s direct delivery route “can only be described as very poor”.
The report highlighted that despite securing significant levels of government grant in 2017 through the London mayor’s Affordable Homes Programme, this grant has largely been unclaimed by the council.
The Greater London Authority (GLA) withdrew grant funding from three estates in 2020 over a failure to start work in the agreed time and to ballot residents.
“We cannot understate the scale of the loss of over £50m in GLA grant allocations, which has certainly reduced the potential for new homes to be built across Lambeth,” the review said.
The report revealed reasons for the HfL’s underperformance included ambiguity in the original brief, unclear governance and “very poor working relationships with the council”.
It found that changes at both HfL’s board and executive team in recent years “markedly improved the position”, but as it stands, all of the current top team are interims.
The feedback from residents on the estates earmarked for redevelopment was “uniformly negative”, according to the report.
“They spoke of inconsistent approaches, poor communications, delays, lack of consideration, and confusion of responsibilities between HfL and Lambeth Council.
“As a consequence, levels of trust in the council are exceptionally low,” it said.
It said the three estates – Central Hill, Fenwick and Cressingham Gardens – “would almost certainly require estate ballots if they were to secure GLA funding”.
It concluded that none have “clear, agreed and funded ways forward”.
The report recommended a “fundamental reset” to the council’s approach to the latter estates and any future regeneration and that it commits to undertaking resident ballots and “genuine engagement”.
It said that in the interim, the council should immediately address urgent repairs and maintenance across these estates.
Along with improving resident engagement and bringing HfL in-house, the report makes a series of priority recommendations.
This includes resetting its internal governance processes and considering how residents can be more involved, such as by giving them direct access to resident engagement officers within the council.
A new HfL business plan should be produced as the current one is “no longer grounded in the current realities of the market”.
It said HfL and the council should review its housebuilding plans and undertake a detailed analysis of delivery capability.
The report also recommended the council ensures new homes align with its net zero commitments.
The council has produced an action plan that commits to the recommendations, which will go before the cabinet on 5 December.
Lord Kerslake said: “Lambeth Council leadership are to be commended for commissioning this independent expert review to explore how their programme can be accelerated.”
Claire Holland, leader of Lambeth Council, said: “Although the review makes for tough reading in parts, we welcome the challenge it sets out and the foundation it provides to us to progress the delivery of the new homes we desperately need in Lambeth.”
Danny Adilypour, deputy leader and cabinet member for sustainable growth and new homes at the council, said any decision on the future of Fenwick, Cressingham Gardens and Central Hill will be made in full consultation, with a ballot in line with GLA guidance.
Lambeth is among many local authorities to set up private housing companies. It emerged in June 2021 that more than 80% of councils now own one, although not all are active.
They emerged partly as a result of powers given to councils under the Localism Act 2011, which gave them the ability to set up their own private companies.
Some organisations have faced significant problems, such as Croydon Council’s struggling company Brick by Brick, which had a significant hand in the council becoming the second local authority in two decades to issue a Section 114 notice, which bans all non-essential spending.
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