Tower Hamlets Watch

Council sells 8 pieces of land to RSL for £8 pound | September 11, 2009


Housing Association lays out £8 for council land and recieves investment of nearly £8 million….not a bad deal really!…

Recently the council had 8 pieces of land valued in E1 including the Sidney Street Library (see minutes of Cabinet Meeting 1st July 2009 Article 6.4, and also the councils report – ‘Local Homes Initiative -CAB 010/090‘). This valuation came back at over £2.7 million pounds. They did this because they are apparently in desparate need of socially rented homes for the massive overcrowding problem we again aparently have in this borough.
They would only sell this land to developers or Housing Associations who would promise to provide 35 family sized homes and the allocation of tenants in these properties over to the council. These tenants would be taken off the council waiting list but would not become council tenants and would in fact become Housing Association Tenants.
So the only benefit to the council apart from the £2.7 million added to the councils Housing Revenue Account, would be the right to house 35 families in these homes, but again, they would lose all income related to rents because these would obviously become Housing Association Tenants.

Tower Hamlets Community Homes has now been given £5,078,571 in the form of a non-repayable grant from the Homes & Communities Agency to build these homes. This would mean that the 35 homes would cost around £145,000 each to build, way above all other estimates to build social rented home, almost 3 times as much. The council in their wisdom dont think that this money is enough to provide these 35 homes, so added to the already large donation by selling the £2.7 million pounds of land for a sum total of £8 pounds. This increases the average total to build each home to £222,388, almost a quarter of a million for each home. Thats almost £8 million to house 35 families, and never ever earn any rents from these families.

Seeing that in Tower Hamlets over 60% of residents recieve some form of Housing Benefit, the odds probably show that not only will we never have the benefit of recieving rents, we will also be paying the rents through the housing benefit system. Last year (2008/2009) an FOI request revealed that the council recieved £53.9 million from council tenant rents that went straight into the ring-fenced Housing Revenue Account, this money is freely available to be again spent back into the system, possibly 60% could be from housing benefits, but this comes from central government, and not from council accounts. The FOI request goes on further to reveal that we lose revenue in the form of housing benefit to the private sector to the tune of £121 million and to the Housing Associations another £91.4 million.  Thats almost 4 times as much money being payed in rents to the private sector in this borough, compared to what this council recieves in rents. Yet not one councillor has petitioned central goverment asking why they dont have any real scheme to build more council homes.

The Homes and Communites Agency in the first 4 months of its existence this year has given away £2.8 billion in non-repayable grants to developers and housing associations, and has only allocated £400 million for council homes. This £400 million comes with strings attached. Councils have to bid for a slice of this £400 million, and whatever amount they ask for the council has to match that figure from their own Housing Revenue Account or through the private sector.

Tower Hamlets Community Housing has not 1, not 2, not 3 but 4 of our illustrious labour councillors as directors on their boards;

Sirajul Islam,

Helal Uddin Abbas, 

Waiseul Islam  

and finally Shafiqul Haque .

You would imagine that one of these expressed concern that nearly £8 million was being given away, for essentially private homes to be built. Maybe screaming something like “Why dont you give the council the money to build council homes instead”. No, they then let their fellow colleagues vote to let the land be sold for £8 pounds. Did they protest at the £5.7 million no strings attached windfall from the HCA, no because as directors of Tower Hamlets Community Housing they would most probably have been party to all discussion with the Homes & Communities Agency, even instrumental in the decision making process.

To sum it all up nearly £8 million pounds of taxpayers money has been given away to provide 35 homes at a cost of nearly a quarter of a million each, these homes will not be owned by the taxpayer, the council will never recieve rents for these properties and theres a 60% chance that taxpayers money will pay these rents forever. And 4 labour councillors who had the power to block this outrageous deal and make a case for the money to be spent on council homes didn’t utter a murmer of discontent.”


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1 Comment »

  1. […] Homes Initiative’ last year I also reported about the £8 million pound scandal in my post ‘Council sells 8 pieces of land to RSL for £8 pound’ regarding giving away our land at a £1 a pop to greedy RSL […]

    Pingback by Local Homes Initiative Deemed A Failure « Tower Hamlets Watch — June 1, 2010 @ 12:59 pm


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