Robin Hood Gardens: development in doubt?

The future of the redevelopment at “Blackwall Reach” was thrown into doubt this week as news came of a fraud probe at developers Swan Housing.

Residents of Robin Hood Gardens, which forms the main part of the redevelopment site, have long expressed concerns about the development, with lack of information for residents being the main problem. Nonetheless, decanting of the blocks is well underway and the project has gone too far to stop now. If there is any doubt about whether Swan can continue with the development, residents will want to know about it – and about what can be done to rescue the situation.

Swan came under public scrutiny earlier this year when it was reported that it had set up a new structure to finance its affordable homes building programme. The Swan Social Enterprise Group was created to manage two profit-making companies – Vivo (care services provider) and Hera (property management) – as well as Swan New Homes, which had run Swan’s developments beforehand. The idea was apparently that profit from these companies would be added to government grant to fund new developments, allowing Swan to think big – but also increasing the risk of developments running into trouble. “Our affordable homes programme bid would probably not have been as ambitious without this structure,” John Synnuck, Chief Executive of Swan Housing Group (SHG), told Inside Housing at the time – before admitting to the industry journal that if the companies could not make the projected profits, cross subsidy of the affordable homes programme could be affected. Inside Housing had previously reported that SHG had been awarded the eleventh largest grant under the Government’s affordable homes programme – although, with 10,000 homes – it is not even on the list of the 60 largest housing associations.

Housing insiders were also concerned that the new companies would not be regulated by the social housing regulator. Other social landlords are understood to be considering adopting similar models, but with the economy, and therefore house prices and availability of mortgages, still very uncertain and housing benefit being cut back, the model is clearly very risky.

The last thing residents of Robin Hood Gardens need is to be left in the dark. Tower Hamlets Council must assure itself that this development is still viable and let residents know the true position.

Statement on Swan Housing’s website
“Since January 2012, Swan Housing Group, in co-operation with the Social Housing Regulator, has been carrying out an investigation into allegations around the practice of a small number of Swan Housing Group staff prematurely drawing down grant from the Homes and Communities Agency. There is no evidence whatsoever that this practice has been for personal gain of anyone within Swan or that public funds have been misused.
“An Interim Report has been prepared by solicitors Devonshires, containing preliminary findings and allegations that a small number of Swan Housing Group staff had deliberately subverted the operating system for premature grant draw down.
“Today (Tuesday, 3rd July 2012), following the comments in the Interim Report, three members of staff have been suspended pending a full internal investigation in accordance with normal H.R. procedure. Additionally, a consultant’s contract has been terminated.
“Swan Housing Group is committed to the highest standards of probity and conduct in all of its dealings and expects the same of all of its staff and consultants.”