I left off back in April with a KOV meeting, focused somewhat on the Strategy for the Vauxhall Nine Elms Battersea Opportunity Area, but as one commentator noted, I failed to cover an impromptu note from the floor detailing work performed by David Boardman (and others) from the Kennington Association Planning Forum. I know that planning matters can be dull, but the big story here is that the KA Planning Forum claim that the funding gap in the Vauxhall Nine Elms Battersea Opportunity Area (mostly on account of the Northern Line infrastructure) is not £58 million, as highlighted by the Development Infrastructure Funding Study (DIFS) (commissioned by the GLA and developers), but a whopping £588 million. This is a major regeneration news story that has not (as far as I know) been noticed by the mainstream press at all.
I was going to try and write it all out to explain where the money is missing, but it was easier to develop the graph produced by KAPF and add a few explanatory notes. As you'll see, the first graph shows an admitted £58 million funding gap, but the DIFS study didn't make it very clear that developers were refusing to fund £62 million of required police, health etc. spending and that £63 million funding was supposed to come from borrowing, despite the fact that Wandsworth Council don't like to borrow on account of it being costly to tax payers. That means that the original deficit was closer to £183 million. You can see it all detailed on this first graph. See the penultimate page of the revised chapter 12 VNEB OAPF for the figures used in Graph 1:
Once the document had been out for a while, KAPF analysed it and found significant weaknesses. They specifically sympathised with the company asked to write the DIF study (Roger Tym and Partners) on account of their being asked to "believe a number of implausible things". So here's a few reasons that KAPF think the developers are wildly optimistic on spend:
* When working on funding for any transport project, the Department of Transport ask that an optimism bias be added. This is to account for the fact that major engineering projects are unwieldy and expensive. In the VNEB OAPF, £800 million was allocated for the Northern Line Extension. But by the time the DIFS emerged, the optimism bias had been removed and the NLE had been reduced to £564 million (shaded light pink). KAPF chose to add £130 million (a 23% optimism bias) back into the costs (shaded bright orange).
* Affordable housing was reduced in the DIFS to 15%, despite the fact that Lambeth's Affordable Housing targets are 40%. If only 15% of the housing built was affordable, the developers would be able to raise a levy of £40k per dwelling. If 40% of housing built was affordable, a levy of only £25k per dwelling is possible. High levels of affordable housing would reduce the funding, leaving costs at the same level.
* By assuming lower levels of social housing, there has been an economizing of both healthcare and education costs. In order to estimate numbers of children for schools, Wandsworth assumed a 10% child yield (1 child in every 10 properties), but child yield in Lambeth is currently 20%. Wandsworth also removed 25% of children from their calculations on the assumption that they'd be educated privately. KAPF think that if the midpoint figure of their estimates is used by both councils, a secondary school is definitely required. That's another unanticipated £74 million (shaded bright yellow) on top of current education provision (shaded light green). If KAPF are correct in their estimation, they also think that a primary school will need to expand to being four form entry. If a new primary school is required, the costs go up further (this is not shown on the graph).
* The KAPF review of the infrastructure report goes into plenty more detail over other issues, but I want to provide a broad overview. By far and away the largest problem is the lack of green space in the VNEB. It is certainly deficient, and this was proved by the refusal of the Secretary of State to permit the appeal of the developers on the Bondway. In the Mayor's Planning Framework, the linear park (a long green strip running from Vauxhall to Battersea) was intended to be 1500m long and 50-100m wide, a total of 11.3 hectares. By the time the developers had finished with their Infrastructure study, they had reduced the total park space to 3.5 hectares! Assuming it was still to be 1500m long, it would only be approx. 23m in width.
The national standard for green space is 2.4 hectares of open space per 1000 people, Lambeth's open space projections assume that the entire Borough will eventually have 1.44 hectares of green space per 1000 people. If the VNEB were to be constructed with a park of only 3.5 hectares, the area would be unproceedable. To reintroduce the missing hectares, and bring the VNEB up to the level of Lambeth's most space deficient ward (Ferndale), would cost the developers, by KAPF's estimations, £200m (shaded bright pink).
So, on a basic reading by a local planning forum, you can see that the sums don't add up. A deficit of over £588m is not something that can be papered over. I know that there have been more developments on the VNEB (including the leader of Lambeth Council coming on board for the project) since I updated last month, so I'll blog about that in due course.