Allocation of housing cash in Southwark could entrench social divide, warn critics

By Robert Firth, Local Democracy Reporter

Fears have been raised that Southwark is sleepwalking towards social segregation after it was revealed new council homes funded by developer cash are concentrated in the poorest areas.

Analysis of council figures by Southwark Liberal Democrats shows that more than two thirds (68 per cent) of planned council homes earmarked for Section 106 cash are in Southwark’s three poorest wards: the Old Kent Road, Peckham and Faraday in Walworth.

Section 106 money is cash handed to the council by developers to fund affordable housing elsewhere in the borough when it can’t be included within the development itself.

The median household income in the three wards was between £33,000 and £35,000 in 2022, compared to £44,000 in the wider borough.

In contrast, just two per cent of new council homes being funded by Section 106 cash are in London Bridge and West Bermondsey, where the median household income is above the borough average, standing at £49,000 per year.

This is despite 70 per cent of the council’s Section 106 money coming from developments in London Bridge and West Bermondsey.

Councillor Victor Chamberlain, leader of Southwark Liberal Democrats, said: “We desperately need more affordable housing in the north of Southwark if we’re to maintain the social cohesion and diversity that makes our borough so great.”

Cllr Chamberlain, member for Borough and Bankside, also raised concerns that the disproportionate allocation of Section 106 cash meant residents in areas with high levels of development weren’t seeing the benefits of it locally.

The Labour-led council rejected Cllr Chamberlain’s concerns saying it was ‘confident’ its current approach to building ‘maximised delivery’ and wasn’t at risk of creating segregated communities.

The council said it had secured ‘substantial’ numbers of social homes through private developments in wards including Borough and Bankside and North Bermondsey, where the median household income is above Southwark’s average.

A council spokesman said: “Southwark is one of the most mixed boroughs in terms of housing tenure with the highest proportion of affordable homes of any council in the country.

“Our council homes building programme is ambitious and we have been building new homes in every part of the borough. However it also relies on finance and land availability. The s106 planning payments are an important source of funding and site availability dictates location.”

Last month, the council agreed to release over £35 million in Section 106 money for affordable housing in Southwark. The cash will go towards supporting the construction of over 1,600 council homes across the borough.

Pictured top: Old Kent Road (Picture: Facundo Arrizabalaga)