Number 8 Albert Embankment will always be a special place for me. Not because of its beauty or design, but because it opened my eyes for the first time to the madness of the London development and town planning industry.
The site occupies a prime position in central London, but has lain derelict for over a decade. The reason is greed – a refusal by the owners, the London Fire and Emergency Planning Authority, and their previous development partners to allow a redevelopment which would deliver benefits to the city.
It’s an issue which afflicts many sites in London, but this story has wider significance in an area like Lambeth. The 8 Albert Embankment story show us the disaster that can be inflicted on a local area when a council gets out of control, when officers refuse to follow the policy of elected councillors and start fighting shoulder to shoulder with the development industry against the interests of the wider community.
Lambeth is one of the boroughs undergoing intense redevelopment, being home to the South Bank and a significant chunk of the Vauxhall, Nine Elms and Battersea Opportunity Areas, a redevelopment project which is now increasingly being panned as a disaster. The 8 Albert Embankment scheme was perhaps one of the first signs that things were going badly wrong in Lambeth’s planning department, and the refusal to deal with it has meant that bad practice now become standard practice, with dire consequences for London.
The now grade II listed building at 8 Albert Embankment was opened in 1937 by King George and served as the Headquarters of the London Fire Brigade until 2006. By then the London Fire and Emergency Planning Authority (LFEPA) had outgrown the building and fire authority managers were feeling the heat of the pre-2008 London property boom. The Fire Authority moved down the road to Southwark and hoped to cash in on their riverside asset.
Of all the landowners in London we would hope that the public sector might provide some respite from the relentless pursuit of enrichment from the offshore pound. They should, after all, be acting with a long-term vision of what is best for the city.
Sadly, the story of 8 Albert Embankment shows us that public authorities can be just as susceptible to greed and behave just as badly as any private developer.
LFEPA teamed up with a niche developer of luxury homes, Native Land, who had been responsible for creating Neo Bankside, an exclusive luxury development behind Tate Modern. Neo had become one of the pioneer developments in London’s luxury housing market. Standing on the site of a former brewery, it contains precisely zero social or affordable housing. There was originally some intermediate housing originally planned but it was later removed. The reason was that the building, which has won awards for its architecture, is so expensive to keep upright that the service charges alone make it unaffordable for people on salaries under £60,000.
The 8 Albert Embankment site was in many ways more challenging for the developers than Neo. The existing building had a grade II listing and was in a much more sensitive position, placed square in the centre of the protected views of Big Ben. It was also protected industrial land and under Lambeth’s then planning policies, the only acceptable housing development on the site would be a development of 100% affordable housing.
Nevertheless, Native Land tried their luck. They proposed the partial demolition and refurbishment of the site, putting a glass penthouse on the top of the Grade II listed front building and two towers behind. The construction of the towers would mean a neighbouring council estate losing up to 80% of its daylight.
The majority of the development would be luxury housing, with some office space and a small amount of affordable housing. Lambeth Council, unsurprisingly thought that the public were being asked to give up quite a lot to feather the beds of the Fire Authority and their offshore development partners. Officers under the leadership of the then head of planning, Jim Smith, turned down the scheme on the basis of the damage it would cause to a Grade II listed building, damage to neighbouring homes and because of the change of use from employment to housing.
Nevertheless the Fire Authority continued to insist that they had a right to convert their taxpayer-funded property into luxury homes. They continued to pursue a luxury housing scheme and continued to be turned down. The building continued to remain empty. In the 10 years since LEFEPA left the site, it has been squatted several times.
All change at Lambeth
Then in 2010 all changed. Lambeth had a new head of planning, Sue Foster, who is the highest-paid council official in the country who is not a chief executive. Despite very little changing with the scheme, the application started to fly though the planning system. Lambeth council officers started to give the development their ‘strong support’ and sent the application to the planning committee with their recommendation for approval.
But when it came to committee, councillors rejected the scheme.
Emails and text messages we obtained from senior council officers showed that in the days after the decision officers were clearly embarrassed by their recommendation being overturned by the committee.
In one email, the Head of Development Control, Andy Gutherson, defends himself to the developers saying that officers ‘robustly defended the scheme at committee’. He was right, officers had openly argued with councillors who were asking difficult questions and started to refuse to provide advice to the committee when it looked like they would refuse the scheme.
After a planning committee refuses a scheme it is up to officers to draft the official refusal notice. This is a key document and is the legal basis for refusing planning permission. If a developer appeals the decision of the council, they are appealing the official decision notice. The content of that notice is crucial to making sure the council has a defendable case if their decision is appealed.
It should be obvious that it would be entirely inappropriate for council officers to share any drafts of the decision notice with the developers before it is approved, but that is exactly what DP9 acting for the developers asked for, and Mr Gutherson was willing to oblige. One email from DP9 to Mr Gutherson thanks him for providing the draft refusal notice to the developer before it became public. Perhaps it was then purely a coincidence that the most legally sound reason for turning down the development was left off the decision when it was finally issued.
The murky world of Daylight
The developer appealed. The scheme went to a planning inspector to make a final decision.
What happened next was extraordinary. When a developer appeals a planning decision it is appealing the decision of elected councillors to refuse permission to build. It is the job of the officers to defend that decision regardless of their personal feelings about the decision. In the end, it is the elected councillors that must have the final say if we are to live in a democracy.
Lambeth engaged the services of a barrister to help them defend their case in the upcoming inquiry.
One of the key issues of dispute was the impact the scheme would have on daylight. The daylight consultants for the developer, Gordon Ingram Associates, had produced a set of figures and said that although the towers would block out up to 80% of daylight to neighbouring homes, these losses were within the standard required by planning rules and so would have a negligible impact.
The council hired another consultant to check the figures, GL Hearn, who found that GIA were simply wrong on the facts. Unsurprisingly, losses of up to 80% of daylight don’t go unnoticed by residents.
However, after submitting a the first draft of their report, GL Hearn then added a conclusion to their second draft which said that although these losses breached the standards, as this was an urban area this was acceptable.
When it came to the appeal, the council were told by their barrister that unless they got a second opinion they would lose and that the inspector would award costs against them. His view was that if the council had two expert reports saying that the daylight impact was acceptable, then it would be impossible for them to justify turning down the scheme on that basis.
Internal emails from Lambeth council showed that after discussing the barrister’s advice, senior council officers Andy Gutherson and Sue Foster agreed not to hire a second opinion.
To be clear, senior council officers took the decision to pursue a course of action that their barrister advised would see them lose the case. They did this against the wishes of the elected councillors, and in doing so, potentially exposed the council to hundreds of thousands of pounds in costs.
Why would they do something seemingly so insane? It was clear that they wanted to teach the planning committee a lesson for not doing what they were told.
At that point, some council officers were becoming so fed up with the behaviour of their superiors that the legal advice received by the council was leaked to our campaign. We asked a local councillor, Peter Truesdale, to put in a question to the council asking what were they going to do in response to the advice of their barrister. The reply came back what could only be described as a straight lie. According to Richard Saunders, another council officer involved in the scheme, the barrister had never advised a second opinion on daylight matters.
In the end, when that advice was made public council officers were shamed into reversing their decision. The council then hired the BRE to provide a second opinion and the appeal by the developer was refused (i.e. Lambeth won) on the basis of that evidence. Had the barrister’s advice not been leaked, it is almost certain that the council would have not sought an expert to defend their case and they would have lost.
The values of surveyors
Viability is an issue which commonly covered on this blog as it is an issue which appears to impact every major development in London. This one was no different.
The developer’s surveyors, Knight Frank, had produced a hideous financial forecast for the development. According to this leading firm of surveyors the development would not generate any land payment for the landowner, because the revenue of the scheme was not enough to cover the costs of building it. Even if the Fire Authority were to gift the land to the developer the financial viability assessment showed that the economics of the scheme were so bad that the developer would be required to cut their profit requirement just to make the scheme break even and that this would cause difficulty in attracting finance. This assessment was the basis of the developers request to the council to reduce the requirement to build affordable housing to just 7% against a policy of 40%.
Anyone might question why they were bothering with the development at all, given the dreadful financial forecasts from a highly respected firm of surveyors. However, we managed to find that in secret, the Fire Authority had agreed a £40m up front payment for the land if the scheme were granted planning permission.
Given that the Knight Frank’s own financial viability report claimed that the development would be a financial disaster, even if they got the land for free, agreeing to pay £40m upfront for the land was a bold move from Native Land.
Obviously the only reasonable conclusion that can be drawn from the developer’s promise to make a significant payment for the land was that the economics of the scheme were in fact far better than being claimed.
It should not have taken much to work out what was going on. The financial viability report submitted to the council showed that the total value of the scheme was £170m and the developer’s own website claimed that the development was worth £230m
What is more, though the Freedom of Information Act we found that the developer had written to Sue Foster at Lambeth Council to tell her that the valuations submitted to the council in the viability assessment did not represent the ‘true’ viability position of the scheme. Despite all of this this, Lambeth’s surveyors, BNP Paribas agreed with the untrue valuations and the community was forced to fight for affordable housing alone.
Unfortunately, at the appeal, our arguments on this issue were rejected on the basis that we were not professional surveyors and so not qualified to give an opinion. BNP Paribas’ defence of Lambeth’s refusal to grant permission based on a lack of affordable housing relied on rearranging the scheme within the values agreed. This was rejected by the inspector when they were found to have made arithmetical errors.
Later we were to find out more. The difference in scheme value between that submitted to the council, and that given on the developer’s website, was not simply an optimistic punt by the developer. At the same time Knight Frank were submitting their valuation to the council, they were creating a second valuation, which was kept confidential from the council. This second valuation put prices at the scheme 30% higher than the figure in the viability assessment. At the higher values the land payment to the Fire Authority could be achieved, but had the land payment and the real valuation been known there would have been no argument to reduce the requirement to build affordable housing.
The game goes on
In the end we won, the planning inspector turned down the scheme and we then managed to persuade the Fire Authority to drop their developer. But the behaviour of council officers I felt had to be dealt with to prevent further disasters. I produced a report detailing all of the failings of the council officers, together with evidence showing that councillors had been deliberately misled by officers over legal advice the council had received. I sent the report to councillors on the planning committee and a copy of the report can be found here. No action was taken.
The senior officials involved on the Lambeth side of the development apart from Andy Gutherson remain in post. BNP Paribas continue to advise the council and Sue Foster continues as head of housing and regeneration. Since the mess that was 8 Albert Embankment Lambeth have been taken to court for unlawfully deciding to demolish an entire council estate without properly consulting the residents, Sue Foster is currently facing contempt of court charges after failing to turn up to court to justify why Lambeth hadn’t complied with a court order to sort out an infestation in a council home. It appears that the council is not the only democratic institution she has little time for.
Lambeth continually fails to secure adequate affordable housing on it’s developments and a huge opportunity to provide housing in the Vauxhall Nine Elms and Battersea Regeneration area has been thrown away, instead the area is about to be filled with high rise, high cost, luxury apartments with few residents. The council continues to lend its full support to the disaster of the Garden Bridge. It is sometimes said that leadership about who you decide to surround yourself with, the responsibility for the continuing disasters in Lambeth’s development must now lay at the door of the cabinet and the leader.
The London Fire and Emergency Planning Authority have now appointed a new developer U+I to take the scheme forward. If LFEPA want to avoid another disaster and prevent their scheme being delayed by several more years, they will have to ensure that their new development partners are better behaved.