Private Developers to Lead all New Council House Building Schemes in “Admission of Failure” of Southwark Labour's Housing Programme

The council’s cabinet on Monday approved a change of tack from the “direct delivery” model of development – the council building homes itself on land it either already owns or acquires – to a “Development agreement” model, most famously used for the Aylesbury Estate redevelopment. 

This comes as financial pressures on the council’s housing account saw building rates collapse by 96% last year, and several schemes paused.  

The council’s primary method to build homes was to directly build them, and contract out the construction work. In 2022 the council created a construction arm to assist with the delivery of these homes called “Southwark Construction”. A handful of schemes have been through the “development agreement” model. 

A development agreement involves the council handing over land to a developer on a “long lease” in exchange for building a minimum number of affordable housing units (along with market rate housing), which the council then leases back. Future schemes to build council homes will now only be done under this model. 

But the Liberal Democrats say that this demonstrates that the Southwark Construction experiment has failed, and that the lessons of history show that there is a huge risk in being beholden to developer’s viability claims. Both the Aylesbury and Heygate redevelopments were under development agreements, both seeing protracted timescales and a reduction in the provision of social housing. 

Under a development agreement, the minimum level of affordable housing is dictated by London and Southwark planning policy, and what developers say is financially viable. The planning policies say that 50% of housing on public land must be affordable – but this includes shared ownership and 80% market rate properties, meaning that it will not be majority genuinely affordable housing. 

Commenting, Liberal Democrat Group Leader Cllr Victor Chamberlain said:  

“It’s disappointing that the council has had to abandon building its own council homes on its own land. It is the clearest signal yet that the Labour Council's approach to housing has failed. They have not delivered the homes we need, and now they’re throwing in the towel. There are huge question marks over this developer-led approach, particularly about guaranteeing we get genuinely affordable homes local people can actually afford. Liberal Democrats will vigorously ensure that mistakes of the past are not repeated, and not let genuinely affordable homes get squeezed out for the sake of developer profit.”