Rear view of Middlesex Hospital Annex site. The Grade II listed former workhouse.
The Middlesex Hospital Annex site, as viewed from Charlotte Street in December 2021, showing the rear of the former workhouse. Only 17 affordable homes will be built as part of the redevelopment of the site. Photo: Fitzrovia News.

The recent appeal decision on the Middlesex Hospital Annex, formerly the Strand Union Workhouse, at 44 Cleveland Street finally put an end to any hopes that Fitzrovia would gain an extra 40 affordable homes for families on the housing waiting list. What would the young Charles Dickens have thought as he began another nighttime ramble from his rooms in 22 Cleveland Street?

The appeal was made by the owners, University College London Hospitals Charity, because they wanted to change some of the aspects of development approved in previous years. On 19 October leading counsel and a full range of witnesses met the inspector, Gareth Thomas, to review the evidence.

The story begins in the 1990s with the construction of the new University College Hospital (UCH) on the Euston Road and the subsequent disposal of several other buildings and sites in Fitzrovia. Although the names have changed over the years the current owner of the UCH is the University College London Hospitals NHS Foundation Trust (UCLH Trust). This is linked to the UCLH Charity, which was formed in 2000 by the amalgamation of three previous medical charities.

Over the past 25 years the UCLH Trust has applied for planning permission for the new hospital and several other buildings in its ownership. In each case it undertook to provide affordable housing in accordance with Camden’s local plan. The number of homes and other benefits to be provided gradually totted up until in 2004 a legal agreement was signed. This determined that affordable housing committed on other parts of the hospital estate should be constructed on the Middlesex Hospital Annex site. A clause was added to the effect that, if this site had not been developed by 2010, the Council could acquire it for just £1. Thus everyone expected the site to be developed for 40 affordable homes and 13 for market sale no later than 2010. The figure of 40 was made up of 30 associated with the development of other hospital trust sites and 10 calculated from the workhouse site itself.

The UCLH Trust at first thought they could clear the site and work possibly with a housing association to develop the required amount of housing. They gradually realized that they were committed to providing housing which they had readily agreed to, but at a massive loss. A further complication occurred in 2011 when the original 18th century workhouse building was listed, requiring a complete rethink of the redevelopment.

About the same time the Department of Health, on behalf of the UCLH Trust, whether aware of the mounting costs or not, transferred the site to the UCLH Charity. This organization, whose main function is to raise money to support patient services in the hospital, then became liable for a massive bill. It is not known whether the charity was persuaded to buy the site under duress or took it on willingly. At the appeal the Charity argued that it was not bound by the 2004 legal agreement because it was signed by the hospital trust and it had not been involved in the prior negotiations.

In 2021 the Charity tried to limit the escalating costs involved by applying to Camden to reduce the commitment to provide only 13 homes for social rent and four for intermediate rent. The balance of 40 would all be sold off at market rates. This was refused and, with other requests to alter the 2021 plans, formed the subject of the appeal in October.

The renovation of the listed workhouse building and surrounding site began in 2019, although unexpected complications occurred when a large graveyard was discovered at the rear of the site. This required a detailed archaeological excavation and caused both delay and additional costs. At the appeal hearing it was agreed by all parties that there would be a negative value attached to the site of up to £35m. This implied that if the agreed plans were implemented there would be a massive loss to either the Charity or the Council if it applied the purchase at £1 clause of the 2004 agreement.

The inspector issued his decision on 1 December. He allowed the appeal thus approving the 2021 planning application outlined above. Fitzrovia was to get only 17 affordable homes on the site as opposed to the 40 previously agreed. Other benefits were retained including a new passageway between Cleveland Street and Charlotte Street.

There were two factors which appear to have influenced the inspector’s decision. The first was the existence of the legal agreement signed back in 2004 which made provision for the “legacy” affordable homes. This the inspector completely disregarded as a material consideration and also added that in any case in his opinion the Council would not be able to afford the development itself so the £1 clause could be disregarded.

The inspector could have argued that the legal agreement was an essential element of the prior negotiations relating to the site and therefore a commitment that should be honoured. Instead, he took the narrow view which was to consider only the application before him which was an appeal against four conditions on the 2021 planning permission. The most important of these was the reduction of a significant proportion of affordable housing. Moreover, the Council had not met the government requirement to identify a five-year supply of housing sites in Camden and this made it more likely that he would approve additional housing of all tenures in the borough.

Perhaps more important, the appeal relied on arguments about “viability”. This is a planning mantra which presumes that development should always enable the developer to make a profit, since the argument goes that development would not happen without a positive outcome on the balance sheet. It has already been noted that both parties in this appeal accepted that with current plans the outcome would be negative, but in this case the appellants were generously offering 17 affordable homes. This was portrayed as a concession which the inspector appears to have accepted as a reasonable compromise.

He also argued that the site had been vacant for at least 15 years and the Council had made no attempt to acquire the site for £1 and carry out the development itself so the legal agreement could be disregarded. In response, Camden could rightly respond that it did not activate the clause because over the last decade there have been regular negotiations, applications and consultations over previous schemes which may have been implemented.

So where do things stand now? The local community will get a restored listed building and the new Bedford Passage through the development to Charlotte Street. This will add to the character and appearance of the surrounding conservation area. On the other hand, a long-standing commitment to provide an extra “legacy” of 30 affordable homes, negotiated on a variety of nearby sites over 25 years, has been torn up and only 17 of the original 40 will be provided.

The ghost of Charles Dickens might well be saying “bah! humbug!” as he walks up Cleveland Street passed the workhouse contemplating the fate of the poor and homeless of the parish, a persistent theme of many of his novels.