Council agrees to give up £72 million in profits to Clarion
CGI of the planned High Path redevelopment. Picture: Clarion
Merton Council will hand over £72 million of profits to a housing association has been branded a “scandal” by opposition councillors.
Last week it was decided that the council will give up the right to five per cent of the profits of privately sold homes in the redevelopment of the High Path Estate in South Wimbledon as well as the Ravensbury and Eastfields estates elsewhere in the borough. Around 2,800 housing units would be build, 1,700 of which would be at High Path.
The profit share will now go to Clarion, the housing association, to fill a funding gap in the £1.3 billion project will take place over the next 15 years.
The total cost of this decision was revealed at a full council meeting on Wednesday night (15 September) but documents relating to it were kept secret.
The council claims giving up this five per cent is crucial to the project moving ahead.
The decision was called-in to be reconsidered with the Merton Liberal Democrats urging the council to not rush.
Conservative councillor Ed Gretton said, “[The council leader] is gifting Clarion £72 million and what a shame it is that the council forgot to put in place a proper contract in place in 2014.
“We cannot support this council’s incompetence and we oppose Cllr Allison’s grotesque gift to Clarion.”
He claimed that the council did not put in place full contracts with the housing association when the regeneration was first approved in 2014.
Fellow Conservative councillor Stephen Crowe said, “Tonight we are considering an exempt paper in a public meeting, we can see the paper but the public can’t.
“The report is exempt from public scrutiny not because of the commercial sensitivity of the contract with Clarion rather to hide Labour’s past mistakes.
“The cabinet has chosen to suspend the five per cent claw back of tens of millions of pounds, it is a scandal.”
While Liberal Democracy councillor Simon McGrath said that a decision so large should ” not be taken in a rush”.
He also called for all the documents related to the decision to be made public.
Council leader Councillor Mark Allison said that giving up rights to the profits of private homes sold means the project can move forward.
He said, “One of the biggest concerns we have is the very urgent need for housing.
“People who have lived through the pandemic we’ve just lived through have spent a lot of time in terrible housing and we should not delay any longer the opportunity of providing good housing for our most disadvantaged residents.
“We’ve been told we should not be in a rush, you tell that to somebody that’s living in an overcrowded house, somebody who has mould on the walls and a screaming baby, a elderly person who can’t get downstairs because the lift is broken.
“If we do not support this programme people will not be housed.”
The council leader said that Clarion faced a significant funding gap in the project which he blamed on increased construction costs related to Brexit and the impact of the pandemic.
The plans were backed with 28 votes for, 23 against and four abstentions.
Tara O'Connor, Local Democracy Reporter
September 16, 2021