No plan B: should Croydon pin its hopes on Westfield?


By - Tuesday 25th November, 2014

The wonder of Westfield? Peter Latham isn’t so sure


A tale of two Croydons: riot damage remains on London Road, a mile from ‘iconic’ Saffron Tower where a two-bed apartment costs £500,000.
Photo by Paul Dennis, used with permission.

What kind of economy do we need in Croydon? The Croydon Trades Union Council’s (CTUC) commentary and recommendations on Croydon Council’s Growth Plan, issued in August 2014, have been ignored by the new Labour council which, like its Conservative neo-liberal predecessors, puts a great deal of faith in the potential benefits from the Westfield/Hammerson redevelopment of the Whitgift and Centrale shopping centres.

However, as economics commentator Anthony Hilton reminds us, the property development industry is fragile. In the Evening Standard on 14th January 2014, he wrote that: “…commercial property cycles come round every bit as often as the wider business cycle but are about three times as vicious… Today, even after some recovery [from the crash of 2008], top-quality property remains 37% below its peak; the secondary stuff is about half the price it was… Commercial property is horribly cyclical [and] because it is almost always built with borrowed money, its problems are big enough to destabilise the whole economy”.

As the CTUC’s report notes, the Whitgift Centre thrived when there were a large number of workers in local offices. With the departure of Nestlé and others, and job cuts by other employers, the customer base for the centre has been badly eroded. The previous redevelopment of Centrale, completed in 2004, shows how unsustainable developers’ schemes can be. Whitgift’s previous partnership also proved unsustainable.

If this doesn’t go ahead, or fails to complete on time – what’s plan B?

In 2005, using £225m from the Anglo Irish Bank, investors bought 75% of the leasehold of the Whitgift Centre from the Foundation, which retained 25%. The investment was controlled by Howard Holdings plc (HH) which went into administration in 2010. HH’s administrator will have benefited because Hammerson was buying its 25% share of the Whitgift Centre. That money may well have been met from Westfield’s purchase of 50% of Centrale from Hammerson. CTUC also expresses three other major concerns about the emphasis placed on the development:

  • the lack of a plan B if the scheme either does not go ahead, or is not completed on time
  • that the low pay nature of most of the 5,000 jobs to be created – in retail, leisure and cleaning – coupled with the rising cost of rented housing, will leave little disposal income for this workforce to spend in the centre
  • what it considers to be the difficulties of public transport into Croydon, and that the walking distance from East Croydon station to the new Westfield will make it less appealing to visit
Council leaders and local MPs have uncritically endorsed the neo-liberal consensus

There is certainly an absence of public debate about what would happen to Croydon if Westfield and Hammerson failed to deliver on their £1 billion new shopping centre. Labour Leader Tony Newman, Croydon North Labour MP Steve Reed and Croydon Central MP Gavin Barwell uncritically endorsed the neo-liberal consensus when the council unveiled its blueprint for devolved powers to deliver more than £5 billion private sector regeneration by 2031. If the Tory-led coalition lets them keep stamp duty on any new homes in the city centre and a greater share of business rates, this could raise an extra £130 million by 2031, according to the Croydon Advertiser’s report on 17th October 2014.

At the full meeting of Croydon Council on 9th October 2014, I pointed out that “MIPIM represents the failed dogma of property speculation that led to the economic crash of 2008 and it promotes housing and land use that is privatised and profit-driven for the benefit of the richest 1%. Why then”, I asked Deputy Leader Alison Butler, “is the council not supporting the call by the charity War on Want, housing activists and trade unions to say no to MIPIM? Is it because only the cabinet makes policy? Or is it because most of the councillors are neo-liberals?”

What low income people need is council housing

The central driver for the local economy is seen as the Westfield/Hammerson retail development in the town centre, supported by the building of thousands of new homes and the provision of modern office blocks. Both politicians and officers refuse to recognise the need for a plan B in the event of a delay or no delivery on the Westfield/Hammerson redevelopment.

For delay is possible given the pending judicial review of the initial planning decision, a public inquiry into the compulsory purchase orders, and their implications for the yet-to-be-submitted detailed planning application. Moreover, Labour’s new national scheme for housing, unveiled on 13th October 2014, is the latest in a line of initiatives designed to give the impression of activity but with little real impact.

What low-income people need is a huge expansion in government-funded council housing, similar to that instituted after the Second World War. Hence – unless the alternative political and economic strategies advocated by the trade unions and the broad left are adopted – the demise of local government will be realised with pre-1948 levels of privatised provision by 2020.

Peter Latham

Peter Latham

Dr. Peter Latham, pictured here with Councillor Andrew Pelling, is a former researcher on direct labour at the London School of Economics and full-time official in the University and College Union. From 1999 to 2006 he was Treasurer and then Secretary of the Labour Campaign for Open Local Government. His previous publications include The Captive Local State: Local Democracy under Siege (2001), New Labour’s US-Style Executive Mayors: The Private Contractors’ Panacea (2003), The State and Local Government: Towards a new basis for ‘local democracy’ and the defeat of big business control (2011) and The Imminent Demise of Local Government? (2014). He is also a member of the Communist Party of Britain, the Labour Land Campaign and Croydon Trades Union Council’s Executive Committee.

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  • CroydonCalling

    No need for a proper Plan B.

    If Westfield balk at the last minute, Croydon Town Centre will still have

    1. Better public transport links
    2. Better road links
    3. Centrale, which i expect will come alive once Whitgift closes.

    The article states since offices have left the area, the Whitgift has further declined. Might as well sort the problem out now then wait for even more decline, currently the town centre is a mess. I live walking distance and i actually shop elsewhere. The only store I’ve spent money on in Central Croydon is at House of Fraser.

    This whole development is not about the 5000 jobs, that’s just a side benefit and its probably better for the low paid unskilled to earn money respectfully, topped up by Tax credits then sit at home and rot away.

    The investment will strengthen the entire area, it already has and they have not even laid a single brick , or should that be knocked a wall down.

    With the inner city exodus, the last thing Croydon needs is more low cost housing, what it needs is more top quality housing, the more housing the better i agree but does Croydon really need more blocks of council flats.

    I agree that it would be better if the shopping centre was closer to the station but the tram should help, or even series of travelators, it wouldn’t even be that hard to encase a lot of the walk with glass and help to add the shopping experience.

    If Westfield do chicken out, turn the entire space into open parkland. Not exactly end of the world.

  • Steve Appleton

    I agree that the main parties (including the millionaire-funded UKIP) all sing from the same pro-elite hymn sheet, and that these kind of property development plans offer barely the faintest of hopes for a better future for working people.

    The only democratic socialist party standing in the election next year, with policies calling for things that include top-quality council housing (which you rightly mention), for rent controls and for a £10 an hour minimum wage, is TUSC (the Trade Unionist & Socialist Coalition).

    Next May they are offering the biggest left-of-Labour electoral challenge for generations, with a target of 100 Parliamentary candidates. That includes a candidate for Croydon North – Glen Hart. (I’m his agent). If your readers would like more information they might have a look at Croydon TUSC’s Facebook page – http://www.facebook.com/SuttonandCroydonTUSC

    Or they can email –