Lend Lease and Quintain’s £4bn scheme ‘at least two years behind schedule’, says National Audit Office
Delays to Lend Lease and Quintain’s £4bn Greenwich Peninsula project could cost the taxpayer as much as £60m, according to the government’s spending watchdog.
A National Audit Office report into the scheme, developed with English Partnerships, found that the housing element of the scheme is two years behind schedule.
Under the terms of the Thames Gateway agreement signed by the government and the developers, the regeneration of Greenwich Peninsula is expected to yield £550m in returns to the government through the development of 4,250 housing units, and various commercial and community projects by 2016. A total of 10,000 homes are to be built before 2024.
But while commercial projects such as the Ravensbourne College school designed by Foreign Office Architects and a business district designed by Terry Farrell + Partners are going ahead, the pace of housing development has been delayed two years.
As a result of falling land prices during that time, the returns to the taxpayer through English Partnerships’ share of the deal are likely to be between £45m and £60m lower than anticipated.
The value of the projected financial return could change upwards or downwards again. However, English Partnerships still expects to receive £550m over the lifetime of the scheme
The first land was originally due to be sold for development in June 2005, but did not end up being sold until July 2007 thanks in part to protracted discussions with Wimpey in 2005/6 which ended in the housebuilder pulling out of the London market. As the first housing units are now not expected to be built until 2010, the project has only seven years to build the 4,250 houses.
The NAO found that even if the developers build at a constant rate throughout that time, they will have to bring 600 units per year to the market to ensure the target is met. Lend Lease and Quintain say this is possible, but the report casts doubts on their ability to carry it out.
It said: “The [developers] are seeking to manage the demands of planning processes, but their ability to deliver construction on site to an accelerated timetable is unproven, and the planned increase in development is constrained by the market’s ability to absorb additional supply of housing.”
A joint statement from English Partnerships and the developers said: “This is a 20-year, complex regeneration programme and projections will always fluctuate over the long term. The value of the projected financial return could change upwards or downwards again. However, English Partnerships still expects to receive £550m over the lifetime of the scheme.”