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Southwark Council slams plans to reduce affordable housing contributions

03 February 2015
Southwark’s Labour council has hit out at government plans to allow developers to reduce affordable housing contributions.

Since December the government has exempted housing developers who turn empty buildings into private housing from paying for affordable housing - even if they could do so and still make a profit on the development. Housing developers could gain hundreds of millions of pounds extra in profits by reducing their contribution to building affordable housing, or in some cases even avoiding paying altogether.

In Southwark, this policy means that former industrial sites that are currently vacant ahead of being developed could deliver only a fraction of the potential affordable housing, rather than the 35% affordable housing provision usually required.

Southwark’s cabinet member for regeneration Cllr Mark Williams has criticised the government policy, which will increase developers’ profits at the expense of affordable housing desperately needed in the borough. The policy could potentially cost the people of our borough thousands of affordable homes.

Cllr Williams said: "If we have any hope of solving the housing crisis we need many more homes of every kind. This new policy will make that much more difficult. The government clearly hasn’t thought this through or given any consideration for how it will affect different parts of the country, and it is ordinary people who will suffer as a result. This is why we desperately need greater devolution over housing and investment so that each area of the country can do the right thing for their residents.

"People are in desperate need of affordable housing. In Southwark we are doing all we can to meet the  challenge and have built more affordable homes in the last three years than any other London borough. However, the government's latest changes will drastically reduce the number of affordable homes we can
build. First they cut the central government grant that supported new affordable homes and now they are making it easier for developers to limit the number they build. To tackle the housing crisis and build the huge number required, we need the public and private sectors to work together, but this government is apparently intent on making that impossible. We already take the financial viability of proposed schemes into account; this change only further loads the dice against affordable homes being built.

“We will be looking at what measures we can take to stop this appalling decision having such an impact in the borough.” 


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