Greenwich Council is sitting on £55 million of money from developers

Greenwich Council is sitting on a £55 million pile of cash from developers – the fourth highest total in London.

Research by the National Housebuilders’ Federation (NHF) found that Greenwich was in the top 20 councils nationally that had millions of pounds in unspent money from developers.

On average, each council in England and Wales is sitting on £19 million from developments – but Greenwich’s sum is almost three times that figure.

The figure relates to Section 106 agreements, which are negotiated between councils and developers so the projects can reduce the impact of a development in a certain area. 

Section 106 payments can be spent in a wide range of areas, including affordable housing, transport, highways, education, health and social care, recreation and open space.

Only three councils in the capital were holding onto more money –  Tower Hamlets was found to be sitting on £166.8 million, with the City of London following on £94.8 million and Newham on £72 million.

Of Greenwich’s total, £10.9 million was for affordable housing. The council said that this money was already committed to specific projects, including homes in Greenwich Millennium Village.

Nationally, the NHF said that it estimated over £6 billion of Section 106 money was sat in council coffers across England and Wales – more than half of it had been there for more than five years. 

It also said councils were sitting in a further £2 billion in community infrastructure levy, which in Greenwich was used to pay part of the bill for Woolwich’s Elizabeth Line station. Last year the council said it had £7 million of this to spend.

In 2020, it was revealed that the refurbishment of Woolwich’s big screen had been partly funded by Section 106 cash that had sat in council coffers for at least 15 years.

Earlier this month The Greenwich Wire also revealed that a plan to turn Plumstead’s old power station into a film studio, which was to have been part-funded by Section 106 money from the nearby Lombard Square development, had collapsed. 

Councils must publish a report each year detailing how much money they receive, what they spent and where that cash came from. 

The most recent figures were published a year ago, revealing that £533,000 of money from the Greenwich Square development went to the rebuilding of Kidbrooke Park School, while the council’s GLLaB employment service collected £1.1 million from Berkeley Homes developments in Woolwich and Kidbrooke. 

Some £237,000 from the Charlton Sainsbury’s development – completed in 2015 – went to Heritage Action Zone renovation work in Woolwich town centre.

The NHF said councils needed to explain why money had not been spent, and that it should be made harder for councils that were hanging onto developer cash to refuse developments on the grounds of a lack of local infrastructure. 

Neil Jefferson, the federation’s chief executive, said: “Investment in new housing delivery brings unrivalled economic and social benefits to communities but too many of these advantages are going unseen by local people. With the government desperate to find money to invest in infrastructure to drive growth, it is nonsensical to have billions sat in council bank accounts.

“Furthermore, a lack of infrastructure provision is often cited as a reason to oppose development, yet this pipeline of billions of pounds of unspent infrastructure funding is too often underappreciated in debates about the impact of new development.

“Whilst appreciating the pressures and constraints on councils, we simply have to find a better way to ensure this money is spent promptly to benefit local communities, support local services and drive growth.”

Greenwich Council told The Greenwich Wire: ““We’re committed to making sure new development delivers positive change for new and existing communities. Section 106 contributions are not only central to this, but vital in helping us create thriving neighbourhoods.

“The vast majority of our funding is already being put to good use to deliver much-needed homes for our borough. We have committed £8.05 million to Greenwich Builds Phase 2 – our flagship affordable housing programme delivering 1,750 for local people on our waiting list. This funding will, in part, go towards 99 homes at Greenwich Millenium Village – a positive step in helping us ensure people have access to a safe and secure home that meets their needs. 

“Separately we’re working on a number of other developments, with the aim of bringing them for formal approval over the next 12 months, which we expect will use the outstanding £2.85 million of our Section 106 allocation.”

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