Southwark Council approved a compulsory purchase order (CPO) for Elephant and Castle Shopping Centre at a virtual cabinet meeting on Tuesday (April 7).

The CPO will be made on behalf of offshore developer Delancey, which plans to demolish the shopping centre to make way for a new pedestrianised town centre, 979 homes, a new college building for the University of the Arts London, leisure and office space and a new station.

Recommendations to give £200,000 to traders who will be displaced by the billion-pound redevelopment, as well as a report overriding residents’ rights to stop the scheme over loss of light, were also approved.

The CPO will cover ‘the East Site’, including the shopping centre and its immediate surroundings on New Kent Road, Walworth Road and some of the arches under the adjacent railway viaduct and ‘the West Site’, comprising the LCC site and its immediate surroundings.

The shopping centre is due to shut on July 30 so the plans can go ahead.

Of the homes proposed, 116 will be for social rent, charged at around £100 a week for a one-bedroom flat, while 53 will be available for the London Living Rent at about £150 a week.

Another 161 will be available at up to 80 per cent of market prices.

The rest will be at market rent – a one-bedroom is expected to cost about £2,000 a month.

A crowdfunded campaign which challenged the decision to grant planning permission, specifically with regard to the number of homes available at social rent, lost its case at the high court in December 2019.

Introducing the report on extra funding, Councillor Johnson Situ, cabinet member for growth, development and planning, said revitalising the Elephant and Castle has been a “long-held ambition” for the council.

“This report highlights our commitment that we announced in January about the addition support for Elephant and Castle Shopping Centre traders which is £200,000.

“When I announced it in January it was really important then but what’s transpired since means that it’s even more important,” Cllr Situ said.

The £200,000 set aside for traders will be on top of S106 relocation funding of £634,700 to be secured from the developer.

Stephanie Cryan, cabinet member for jobs, business and innovation, said the council will be able to distribute the money to traders after the statutory five-day call-in period is over.

Cllr Cryan said: “We’ve all had a lot of emails and tweets this week around the situation with the traders in the centre and I just wanted to reconfirm our absolute commitment to helping support the traders through this period.”

“This CPO won’t diminish our commitment to them at all,” she added.

The CPO report acknowledged that the compulsory purchase of land “involves a serious invasion of the private property rights of citizens”.

But the council’s position is that the benefits of the scheme justify the order.

Cllr Situ denied during the cabinet meeting that the CPO would force out traders from the centre.

“It’s important to know that the decision to close the shopping centre is one made by the owner.

“It’s a decision that they’ve come to in light of their planning application and it’s irrespective of any decision the council cabinet will take.

“Most of the interests have been resolved through the owner, and credit to them in terms of making those negotiations.

“This CPO decision is very much set in a timeline and framework for the larger interests, such as Arch Co., such as TfL, and such as EDF.

“It’s really important to differentiate between the decisions that have already been made and the additional support we have committed to traders in this decision that we’re making today to ensure that there is at least a timeline and some certainty moving forward,” he said.

Cllr Richard Livingstone, cabinet member for environment, transport and the climate emergency, asked what conversations were being had to help Arch traders which could be displaced.

“Obviously if the CPO powers are used for other landowners in the area, which is Network Rail or Arch Co, it potentially has a knock-on impact on their tenants,” he said.

Cllr Situ said that conversations have “by no means come to a conclusion” but were “positive”.

“Our commitment to supporting the traders is not something that will end tomorrow.

“It needs to continue over the next few months and indeed post the shopping centre closing,” he said.

Following a suggestion from Cllr Livingstone, a change in wording was made to one of the recommendations which means only minor amendments to the area covered by the CPO could be made without going back to cabinet.

The recommendation to prevent residents affected by loss of light from challenging the development was also approved.

“In short this report asks cabinet to authorise under the Town and Country Planning Act which enables nearby residents to the development to have the right to financial compensation reflecting any losses in their value but will mean that they are unable to stop the development from happening,” Cllr Situ said.