Number of cash payments in the place of affordable housing increases across London

According to a report from London First, in 2014 more than £250 million in payments were made by developers instead of building affordable homes within the proposed development. This figure is significantly more than previous years. In 2011, payments of £20m were paid by developers across London.

According to a report in the Financial Times Kensington and Chelsea Council received £26m in 2015 and Westminster Council will receive approximately £24m for a development on the Strand.

In the London plan, "affordable housing should normally be provided on-site" and only "in exceptional cases where it can be demonstrated robustly" can affordable housing be provided off-site.

"A cash in lieu contribution should only be accepted where this would have demonstrable benefits in furthering the affordable housing and other policies in this Plan and should be ring-fenced and, if appropriate, pooled to secure additional affordable housing either on identified sites elsewhere or as part of an agreed programme for provision of affordable housing," the Plan said.

Currently there are no specific monitoring requirements regarding the expenditure of these payments. London First recommends that councils should have set criteria when such payments can be made and any payments received should be declared to the Greater London Authority (GLA) as part of a monitoring process. It also recommends that the payments should be used within a set period of time and if they remain un-used then they should automatically pass to the GLA to contribute towards a wider affordable housing scheme.

GLA committee member Darren Johnson said "Tightening up the oversight and use of this money would be very welcome. But it won’t address the fundamental flaws with off-site provision, including the tendency for councils to stick the affordable housing in the cheaper neighbourhoods so we don’t get mixed communities."