View of former Middlesex Hospital Annex building with BT Tower in the background.
The former Middlesex Hospital Annex on Cleveland Street. Photo: Julia Gregory.

Camden Council and UCLH Charity faced a government planning inspector this month in another chapter of a long-running dispute over social housing on a former hospital site in Fitzrovia.

During a hearing at Camden’s Crowndale Centre on Wednesday 19 October UCLHC warned it might have to find a commercial partner to deliver new homes on the former hospital site.

It bought the Middlesex Hospital Annex site from the UCLH NHS Trust in 2017 and won planning permission in 2019 to build 53 homes — 36 at social rent, four at intermediate rent, and 13 to sell at market rate — as well as commercial and healthcare accommodation.

Thirty of the social rented homes are the legacy units from a historic s106 agreement to redevelop a number of hospital sites in south Camden.

But last year UCLHC asked Camden to greenlight a new scheme with 57 homes but with just 17 at social and intermediate rent and 40 at market value.

Camden Council refused, saying it “strongly opposed” the reduction in social housing. The charity then appealed to the planning inspectorate to try to reverse the decision.

At the start of a two-day hearing UCLHC told planning inspector Gareth Thomas that the disputed scheme with 40 affordable homes, rather than the 17 it proposes, is simply “not viable”.

Planning inspector Gareth Thomas. Photo: Julia Gregory.

The council and hospital charity dispute a “£1 clause” in a 2004 s106 agreement that would allow the local authority to buy the land for the nominal fee if affordable homes are not built there.

The charity’s lawyer Rebecca Clutten said there is no evidence that the council “has the resources to build 100 per cent affordable homes on the site” even it took over the land for £1 — which the Town Hall has threatened to do.

The charity is also challenging the council in the High Court over the historic clause.

“It is likely that if the high court action is successful it will see the 30 legacy units swept away,” said Clutten.

“There is not an alternative scheme waiting in the wings that can be brought forward.”

She told the planning inquiry that changes to the economy, including the increased cost of construction and the impact of Covid mean it is simply not viable to build those affordable homes.

Developers also faced challenges with the cost of excavation as the land included the burial place for up to 10,000 people, from the former Cleveland Street workhouse and an overflow burial ground for St Paul’s in Covent Garden.

Excavations revealed the remains of 1,017 people.

The charity said it would not make a profit on the site, but is trying to minimise the deficit.

“The charity is facing a significant financial loss,” said its viability expert Andy Smith.

The council’s lawyer Morag Ellis said it was an “unusual” case with a long-running history, including the disputed “£1 clause”.

Camden said it was concerned that the scheme did not have enough larger affordable homes, despite the demand on its waiting list. Families face waits of nine years for a four-bedroom council home and six years for a three-bedroom home.

Its lawyer Morag Ellis told the inquiry: “The risk is that those 30 families or individuals will not have a home on the site. There is a parlous condition of affordable housing in the borough.”

UCLHC’s lawyer Rebecca Clutten said: “I understand the strength of feeling around this but this scheme cannot deliver those numbers.”

UCLHC said the scheme “is the best use of the site” which has sat vacant for 15 years and it would be providing 30 per cent or 17 affordable homes, even though both sides agree it is not viable.

It said it is not a property developer and is considering finding a joint venture partner to help fund the development.

Professor Nick Bailey, who attended as a local resident and helped draw up the Fitzrovia Action Area Plan, said: “The affordable housing was the culmination of negotiations with the health authority since the 1990s and was based on the development of several different sites. It was also the health authority which chose to build the affordable homes on the Workhouse site. They signed the legal agreement to provide the homes in 2004 and therefore have a moral duty to build them now”.

Bailey argued that there was a great shortage of affordable homes and a need for family housing. He said the immediate area contained nurseries, a primary school and a community centre.

The council also said it was concerned about the proposed use of active cooling, rather than a less environmentally harmful method. The developers are planning a £326,000 carbon offset payment for using the system.

The rear of the Middlesex Hospital Annex site: Photo: Julia Gregory.

On Thursday 20 October planning inspector Gareth Thomas paid a visit to the site to see for himself.

The brick-built Georgian workhouse is a few doors down from the first London home of novelist and social observer Charles Dickens.

The writer lived in the street twice — a fact commemorated by a plaque on the building. Dickens’ novel Oliver Twist may have been based on this very workhouse.

The workhouse and two neighbouring buildings became part of the Middlesex Hospital before falling vacant.

Work is already underway on the site which will include six medical diagnostic machines and a new home for the breast cancer centre.

The plans also include penthouse flats on the upper storeys of the listed building.

A decision on the appeal is likely to be made within weeks and will be published on the planning appeal website.