Thursday, June 09, 2011

Badminton House - A Tough Decision

Last week the Southwark Cabinet took the tough decision of placing Badminton House on the market for sale. Badminton House is a block of 11 flats and sits at the bottom of the East Dulwich Estate on Dog Kennel Hill, opposite East Dulwich Station. Any decision to actually sell the block will have to come back to Cabinet in due course.

Why were we faced with this decision? The answer is simple. Under the last administration the management of the contract for the regeneration of the estate was allowed to run out of control, so that a scheme which should have cost £25 million now will cost over £30 million. And that additional £5 million does not exist in any other budget to make up the shortfall.

It has always been a key element of the regeneration of the East Dulwich Estate that capital receipts would be generated from land and void sales on the estate itself. Some flats have already been sold on the open market. So in order to meet the £5 million funding gap we had to look at ways which will have a minimum impact on the Estate and the overall regeneration scheme. We could choose to save £1.5 million by not proceeding with environmental works on the Estate, but I have long believed that those works will be a key element of the regeneration - giving the Estate a truly 'as new' feel. We could increase the sale of individual voids across the estate - but this has its own difficulties.

Add into the equation the fact that Badminton House was not within the Durkan regeneration works programme for the estate and never has been, for reason which lie in the decision-making of the previous administration in Southwark - and that to undertake the regeneration of Badminton House would add another £1 million to the £5 million shortfall, and the problem becomes even more acute.

I do not want to have to sell council housing in Southwark and lose homes from our stock. But in this instance we are faced with a problem which we cannot ignore. Homes in Bermondsey and Peckham have already been lost in order to fund the regeneration of the East Dulwich Estate. It would be unfair to go back to those areas and demand more homes or land in order to fund the works. By the sale of Badminton House we can fill a significant part of the funding gap in the project, without fundamentally changing the nature of the Estate.

But this decision and the debate which has ensued just underlines the challenge which we face in Southwark. With 54,000 properties the Council has to be assured that we can maintain those properties in a proper state going forward. We have to know that our housing stock is capable of being self-financing, because without that assurance the problems of funding major works which we have experienced on East Dulwich Estate will arise on estates right across our borough.

We have developed a 5 year housing investment programme which does not mean the loss of any significant number of homes from our stock; we must now put together a business plan which looks to the ensuing 25 - 30 years.

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