A housing deal between Haringey Council and a private developer has been put on hold following a dispute within the Labour Group over affordable homes.

Backbench Labour councillors succeeded in forcing a re-think of plans to sell off land to Magic Homes after claiming the deal was at odds with a pledge to build council homes on council land.

The council’s top decision-makers have now been asked to come up with an alternative plan that involves the local authority keeping hold of the land and building its own homes on the site.

Haringey’s cabinet signed off the deal that would allow Magic Homes to build 88 flats on the site of the former Red House Care Home on West Green Road at a meeting on July 9.

Under the terms of the deal, Magic Homes would sell 46 homes back to the council that would then be offered at affordable social rent levels.

This would help Haringey Council edge closer to its ambitious target of providing 1,000 council homes by 2022.

But nine backbench Labour councillors claimed the deal was at odds with the borough plan and their own party’s manifesto commitments, and they called in the decision to the overview and scrutiny committee.

The backbenchers claimed the council could keep hold of the land and build more social homes at a lower cost, setting out their case at a meeting of the scrutiny committee on Monday (July 29).

Labour councillor for St Ann’s ward Cllr Mike Hakata told the committee: “This project is out of line with the Labour Group manifesto commitment to build council housing on our own land.

“The proposal is for public money to be paid to a private developer in order to buy back land at a premium that we sold to the developer at a discount.”

Cllr Ruth Gordon, Labour councillor for Tottenham Hale, added: “Magic Homes have found a magic money tree and planted it in our back yard.”

But cabinet members defended the deal, saying it would provide council homes more quickly for people in urgent need of housing.

Cabinet member for housing and estate renewal Cllr Emine Ibrahim admitted the council may have been able to provide the homes at a lower cost but could not have done so as quickly as Magic Homes.

Cllr Ibrahim added there was a risk the council could not have provided the homes at all.

Director of housing, regeneration and planning Dan Hawthorn said the council had to provide some homes for market sale as well as social housing under targets set by the Greater London Authority (GLA).

He explained that providing market homes helped to boost funding from the GLA that could then be put towards more affordable housing.

Mr Hawthorn said: “We need market homes in order to give us the subsidy we need.”

But several councillors questioned the soundness of the deal with the developer and warned the council could end up with no homes at all.

Labour councillor for Hornsey Cllr Dana Carlin said she thought the sale and buy-back deal with Magic Homes was “incredibly risky”.

She said: “Once we have sold the land it is no longer our land. If that contract for sale does not include very strict criteria about what is done on the land, we have no control.

“We are selling a piece of council land with no criteria attached – just a sale. Once it’s gone, it’s gone. Magic Homes can do whatever they want and there’s nothing we can do.”

The overview and scrutiny committee sent the decision back to cabinet for a re-think, with several recommendations attached.

One of these was to come up with an alternative option that shows what the council could provide on the land itself.


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