Flagship Scheme Under Threat

Guardian article on New Deal in Shoreditch
A flagship regeneration project is being put at risk by debt-ridden Hackney council’s decision to sell off land following government pressure to balance its books.
The council plans to sell off assets worth £50m this financial year with more sales expected, including nurseries and playgrounds. Several sites up for sale or under threat of sale are in the Shoreditch area, which has some of the highest land values in the borough. The sales are jeopardising plans of Shoreditch Our Way, a £57.4m regeneration project launched by chancellor Gordon Brown and deputy prime minister John Prescott as part of the government’s £2bn new deal for communities programme.

The scheme’s treasurer, Clayeon McKenzie, said: “We need communal land to develop the area. Our regeneration scheme is going to be dead in the water if they flog off any more land. All that we’ll be left with is the homes that we live in.”

The community-led project is particularly alarmed at the council’s decision to put a popular adventure playground on its disposal list. It has also been under pressure in the past to demolish council homes to make way for private development, which would force tenants out of the area.

The borough, which has debts of £50m, has already been warned against selling off council assets by the district auditor. The matter is now also being raised by local Labour MP Brian Sedgemore, who said he was “very concerned” about proposed land sales.

Speaking at a visit to Shoreditch yesterday, the regeneration minister, Lord Falconer, ducked the issue of sales. He said: “That is something that needs to be worked through by the new deal partnership and the council. One cannot avoid the financial pressures. One needs to find a solution that delivers a long term community programme for Shoreditch.”

In private discussions with Shoreditch Our Way, Lord Falconer is understood to have offered to forward some of the £22m earmarked for the project to improve housing in the area, so that it could buy off land from the council. The suggestion alarmed Mr McKenzie. He said: “That would be robbing Peter to pay Paul. That money is for improving the housing not bailing out Hackney council, it’s absurd.”

Last summer Lord Falconer withheld the housing cash because he rejected the community’s plans for improving the homes, claiming they were “unsustainable” and did not have the backing of Hackney council. At the time, both Hackney and the government were concerned that the resident-led project refused to consider demolishing some of the 7,000 council homes in the area.

Yesterday Lord Falconer said: “At that time we could not agree on what [the plans] should consist of. Since then there has been a productive relationship between Hackney council and the new deal partnership. “I don’t want to comment on the detail of whether there is too much council housing. I think the issue is what is a sustainable future for the housing problem?”

Lord Falconer reaffirmed that the government was “serious” about new deal projects being community led, but he added that the community needed to be “realistic”. Representatives from Shoreditch Our Way were keen yesterday to stress that they were now working with the council on new plans to improve the homes in the area. No one from the council attended Lord Falconer’s visit to underline that message. A Hackney spokeswoman said that staff were “very thin on the ground”.