Look to the Heygate Estate for what's wrong with London's housing

At Elephant & Castle you can see exactly how London's mixed communities are being forced to give way to regeneration.

For a year and a bit I lived in a flat off the Walworth Road, and every morning and evening I would walk the half a mile between Elephant & Castle tube station and home. On one side was the “mugger’s paradise” Heygate Estate, on the other, the Carbuncle Cup-winning Strata SE1. For many reasons, I always preferred the look of the former over the latter.

At the time I’d heard there were only seven people left living in flats there, and the mostly-derelict estate was probably mostly known to non-locals as a setting for films like World War Z and Attack The Block, and the TV shows Luther and Spooks. Steel panels went up, over time, to stop the curious from taking walks around the abandoned buildings, or enjoying the views from the roofs. The Heygate may have still been a home for some, but the world outside treated it as a dead space. Photographers, explorers, and free runners loved it.

For everything that’s wrong with London’s housing and built environment, look to the Heygate Estate, and to what will replace it. Completed in 1974, its 1,200 homes housed more than 3,000 people in spacious, well-lit rooms with all the modern conveniences. Two decades later, its broken lifts, broken lights, piss-soaked corridors and violent crime came to signify everything wrong with the post-war approach to social housing and urban design.

Of course, the reality of what the Heygate was is more complicated than a concrete monstrosity taken over by the allegedly degenerate. Listen to Chris Wood’s “Heygate Heaven”, for example - the voices of residents drift in and out over the the ambient sounds of the estate and surrounding areas. Many of the residents mourn its destruction, even while admitting its flaws:

Adrian Glasspool is the last person living within the Heygate, and the Guardian dealt with his imminent eviction this week:

Glasspool, a teacher, who remains inside his three-bedroom maisonette in Elephant and Castle amid a dispute about compensation, represents the last hurdle in a 15-year project which will see more than 1,200 primarily social-rented homes replaced with more than 2,300 flats and houses, the majority sold for prices currently reaching £380,000 for a one-bedroom flat.

Southwark council, masterminding the transformation with developers Lend Lease, says the scheme brings long-overdue regeneration to an area long blighted by poverty and post-war brutalist housing, and that money it generates will finance thousands of affordable homes.

None of these 284 homes, currently priced between £350,000 and £1.1m, will be offered at a discount. Instead, Lend Lease has given Southwark £3.5m to spend on social housing elsewhere and will contribute to a new leisure centre.

A report by council officers said Lend Lease baulked at providing social units as this would require a second lobby and lift shaft to separate the two types of resident, adding: "Not doing so would have significant implications on the values of the private residential properties.”

That last bit is particulalry horrible, as it reveals the base motivation for the project - maximising profits from the redevelopment, and doing so by keeping the riff-raff out. Developers across the city have been doing this, with gates within gates to make the division especially clear.

The simplest way to get across how terrible a deal this is for everyone involved in the Heygate's regeneration is to simply quote the figures involved:

What has happened here is that Southwark Council has lost money on evicting the Heygate Estate for the benefit of Lend Lease, with no prospect of getting anything in return for it. In the process, an established community has been scattered throughout the borough and beyond, while the Council obfuscated what was happening and fought to keep key details secret until it was too late to stop it.

There is a thriving microblogging community in Southwark, and it has documented every step. Sites and groups like 35 Percent, the Elephant & Castle Urban Forest, and Better Elephant have been covering the cleansing of Southwark to no avail. 35 Percent has actually managed to create (thanks to FOI) a map of the Heygate diaspora:

The Heygate Estate occupied a large site next to a major transport interchange in an inner London borough, and its residents had the temerity to remain poor while the land they lived on became more valuable. When people talk about the "social cleansing" of London, this is it. The classism and snobbery directed towards brutalism (but only when occupied by certain groups - see: the Barbican) compounded the Heygate Estate's fate. Read through the stories from former residents, archived on Heygate Was Home, for proof that it wasn't always considered a slum, or an eyesore, by the people who mattered.

We're losing London to the forces you can see at work at the Heygate. Regeneration schemes that push the existing community out to neo-banlieues and replacing them with white collar professionals and students living in inferior-quality buildings; councils pleased to turn a blind eye so they have higher rate payers within their boroughs; developers getting given land at a fraction of its true value on the promise of future profits that mysteriously never arrive; a revolving door between local authorities and regeneration consultancy and PR firms. The people affected by these phenomena are the last people to be given a say in, let alone be given control of, their lives. God forbid they should ever be given a way to choose how their city changes, too.

The Heygate Estate on the left, Strata SE1 on the right. (Photo: Getty)

Ian Steadman is a staff science and technology writer at the New Statesman. He is on Twitter as @iansteadman.

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation