A £64m funding gap for the infrastructure improvements of the Elephant & Castle regeneration has been identified by Southwark Council. The figure is given in its submission to the Government inspector examining Southwark’s plans for raising funds from developers through the new Community Infrastructure Levy.
The hoped-for improvements include a new northern line ticket hall, better access to the mainline station, a remodelled northern roundabout, new leisure centre, GP surgeries and refurbished Town Hall with library and museum.
Evidently the money raised from developments at the Elephant so far has not been enough to provide all the benefits that everybody was expecting from the regeneration and so far committed public funding is not enough to fill the gap. This gap comprises a £40m shortfall for the northern line tube station upgrade, £12m needed for the mainline train station upgrade and about £9m needed for the northern roundabout improvements. The reason for the shortfalls is that developers are not paying enough. The CIL predecessor at the Elephant was the Elephant & Castle Strategic Transport Tariff, which required developers to pay £175 per m2 of any new residential floorspace towards public transport infrastructure. The problem is that developers regularly submitted viability assessments showing that they couldn’t afford to pay the full tariff. For example, Lend Lease was able to re-negotiate the tariff for its Heygate redevelopment down to a level of £104 per m2, providing a total transport contribution of £13m when it should have paid £22m:
In making up the shortfall, Southwark hopes to gain £18.5m in CIL contributions from future developments at the Elephant over the next 15 years, but this is obviously not enough and it could mean raiding CIL yields from elsewhere in the borough or CIL destined for health facilities, open space or public realm benefits.
The model of private development cross-subsidising public benefits is plainly not working. While public assets (eg. the disposal of public land or spending from public funds) is fuelling the regeneration, developers aren’t paying enough towards the improvements. As we have shown they systematically use viability assessments to wriggle out of planning contributions and all we are ending up with is social-housing free towers sprouting up across the Elephant (the latest proposed being the Ministry of Sound’s ‘the blades’).