The O2, a central part of plans to regenerate the Greenwich Peninsula, opened on time in June 2007 and has become a highly successful entertainment venue which has boosted local employment. According to the National Audit Office, however, housing development on the rest of the Peninsula is taking longer than originally expected, and financial returns to the taxpayer are likely to be lower as a result.
The report found that the number of houses built, making up most of the project, is two years behind original forecasts. English Partnerships’ oversight of the regeneration can influence the quality of the project, but it cannot easily speed up delivery by house-builders. The delay increases the risk that English Partnerships might not meet its forecast of 4,250 housing units by 2016.
Delays to the housing programme have, however, freed up capacity and brought forward the development of schools and commercial space. This development will benefit the growing community on the Peninsula, as it will allow them to live, work and use recreational facilities on the Peninsula from the day they move in.
A consequence of these delays is that the financial returns to the taxpayer from the residential and commercial elements of the deal (excluding The O2) could be lower than expected. The available information suggests a reduction of £45 million to £60 million compared to the initial 2004 calculation, though returns will fluctuate over the 20 year lifetime of the project.
English Partnerships has not yet quantified the likely return from The O2. The Public Accounts Committee recommended in 2005 that Departments should attempt quantification in such cases. Arrangements to secure a fair and timely financial return for the taxpayer are still being agreed with the developer AEG.