Why Sadiq Khan says he has ‘no powers’ to stop loss of Battersea affordable homes

Why Sadiq Khan says he has ‘no powers’ to stop loss of Battersea affordable homes

The number of affordable homes included in the big, expensive Battersea Power Station redevelopment scheme is set to be reduced from 636 to 386, down by 250. People have been asking why Sadiq Khan, so committed to increasing affordable housing percentages, hasn’t stepped in to stop this. Khan himself has already provided an answer. In a statement issued yesterday, he said: “I have no powers to intervene”. Why does he say that?  Let’s go back in time.

Outline planning permission for redevelopment of the land around the legendary power station building and the refurbishment of the building itself was granted by Conservative-run Wandsworth Council in 2011, with the original affordable housing number built in to the deal: 636 out of a total of 4,239. As the application was for a large project, one deemed to be of strategic importance to London as a whole, it also needed the blessing of the London Mayor. At that time the mayor was Boris Johnson. His blessing was given. Wandsworth duly gave the application its consent.

That is the top and bottom of Khan’s point: the law doesn’t allow him to intervene over planning applications after they have already received a mayoral go-ahead, whether by him or by a predecessor. But, hang on. Doesn’t this expected change in the number of affordable homes to be included the scheme require its own, new, separate planning application, you might ask? The decision about granting it is being taken (tonight) by Wandsworth’s planning committee, after all. And, if so, does that new application fall within the scope of Khan’s powers, even if the original one doesn’t?

City Hall says it absolutely, definitely doesn’t. Why? For one thing because the request from the developer to reduce the affordable housing number takes the form of a “deed of variation” to one part of the planning permission already granted and that, says City Hall, is not the same thing as a planning application. Rather, it is a request to change a legal document that has already come into effect.

An On London reader was not convinced by this. In correspondence, he argued that the deed of variation should be regarded as a planning application by both Wandsworth and the mayor, and therefore does fall within scope of Khan’s powers to intervene. He points to provisions added to the Town And Country Planning Act in 2013 relating to modifications to affordable housing requirements set down in what are called Section 106 agreements built in to planning deals and which he thinks, by definition, cover deeds of variation.

The added section 106BB of the Act said: “A local planning authority that receives an application to which this section applies must send a copy of the application to the Mayor of London”. It also said the mayor must reply within seven days if he (or she) “intends to make representations about the application”. Note the use of the word “application”. The reader suggested that the requirements for a local planning authority, in this case Wandsworth, to send “a copy of the application” to the mayor and the imposition of a deadline on the mayor for making representations amounts to the same thing as planning applications of strategic importance have to be referred to the mayor and the mayor having powers to block, amend or appropriate them.

City Hall still isn’t buying that line. And not without reason. Inspection of the small print shows that section 106BB was repealed on 30 April 2016 (see 7(4)). Even so, the whole business raises interesting issues about definitions, wording, the vagaries of planning legislation and the rather larger matter of whether the mayor should have powers to intervene over deeds of variation if they mean affordable housing will be lost. Khan’s statement certainly gave the impression of eagerness to act. “I have sought advice on how to stop this happening,” he said, though City Hall hasn’t yet told me what sort of advice he was after or whether any has been received. And for the moment the mayor is left to urge Wandsworth Council – which he was once a Labour member of, by the way – to thoroughly scrutinise and reject the contentious deed. But the advice of the relevant planning officer is to accept it. No one should hold their breath.

All of which brings us to the grounds on which the Malaysian-owned company behind the scheme is asking to be let off its original affordable housing commitment. Meet our old friend viability. The developer says it can no longer afford to supply as many lower-priced homes as originally promised because demand for the more expensive ones has fallen, because restoring the Grade-II listed power station building is costing more than they thought and because of the weakness of the pound. Less profit means fewer affordables. You might argue with the figures but the basic equation is a hard fact of housing finance life.

By way of compensation, the developer has said it will deliver the 386 affordable homes, all in the intermediate range, sooner than previously planned and will come up with the missing 250 in a later phase of the work if a review mechanism concludes that their margins can take it. Sadly, the view of adviser BNP Paribas is that this outcome is “very unlikely”.

The original scheme was not greeted with universal acclaim, in part because the affordable housing percentage, now just 9%, was a pretty low 15% to begin with. It could be argued that at least something was at last being built on this section of one of the capital’s last big brownfield sites, the Vauxhall Nine Elms Battersea (VNEB) opportunity area, and the power station building preserved. London writer Peter Watts has documented a vivid history of failed attempts to bring the grand pile back to life in a lovely book. Mayor Johnson’s simple point was that “some affordable housing is better than none”.

That’s the glass half full position. The glass is looking a little emptier now.

Categories: Analysis

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