The Local Government Ombudsman (LGO) has found fault with Southwark Council after investigating whether the authority was making sure that developers were providing the social housing levels indicated in section 106 planning gain agreements.
A letter from the LGO to the council states: "The complainant … says the council is failing to ensure delivery of the social rent or affordable housing the planning committee intended developers to provide. That causes an injustice to those who would otherwise be able to bid for these homes."
The LGO found that that "when imposing conditions for providing social housing through section 106 agreements, the council failed to implement a structured procedure for supervising compliance".
In response to the investigation, the authority "has now begun a borough-wide audit into compliance".
The letter states: "Until now, the council did not have a proper procedure for checking compliance with section 106 agreements. It relied on developers honouring the duty under the agreements.
"That failure means the council does not know if developers provided all the social housing units intended under the agreements. It may act as encouragement for unscrupulous developers to agree to something they do not intend to provide knowing nothing would happen. So the council’s introduction of compliance checks is welcomed.
"The council accepts that fault."
It goes on to say that the council "has already reviewed compliance in many developments" and is "rolling this out into a borough wide annual audit to ensure compliance".
This "will take until well into 2017 to complete", it adds.
Local pressure group the 35% Campaign says it was the complainant and claims that, over several years, Southwark approved 43 developments where social rented housing was not delivered as promised.
In response, according to the LGO, the council said it has surveyed the 43 developments and sent the complainant its findings.
Mark Williams, the council's cabinet member for regeneration and new homes, said "Southwark has one of the best records in the country for delivering new affordable homes. We also have the biggest council house building programme in the country.
"We recently met with some local housing activists who raised concerns that some of the affordable homes secured by us from developers through the planning process may not have been delivered. We agreed to carry out a full audit of all homes built in our borough to make sure that these affordable homes have been delivered and this is underway.
"We welcome the ombudsman’s report which recognises the steps we have taken to tighten up our processes. More affordable homes are desperately needed by our residents, which is why we take any such breaches extremely seriously and will take legal action."
Councils can choose whether to enforce section 106 agreements, the LGO letter says. Authorities "may seek a court injunction if the developer or subsequent owner fails to comply with its duty" but this is a "discretionary power".
The LGO letter can be found here.
NOTE: This story was updated at 5.15pm on Monday December 12 to add a comment from Southwark Council.