Taxpayers might be required to rescue Sadiq Khan’s London housing fund after it repeatedly failed to meet repayment deadlines for a £300 million loan, with auditors raising concerns over its management.  

The fund, operated by Greater London Authority Land and Property Limited (GLAP), was created in 2012 under Boris Johnson’s mayoralty and inherited the debt following the merger of public development bodies.  

GLAP, one of the UK’s largest public sector landowners, is tasked with developing housing to address the nation’s housing crisis. As a commercial subsidiary of the Greater London Authority (GLA), the fund owed repayment to the GLA by 2018 but has consistently missed deadlines over the past six years, only making an initial payment this year.  

Documents obtained by London Centric and shared with the Financial Times highlight these financial struggles, raising questions about the fund’s future stability.

The fund owns 635 hectares (1569 acres) of land across the city, mostly in the London Docklands redevelopment area and on the Greenwich Peninsula near the O2 – areas that have been tipped for heavy development.

Internal audit documents reportedly raised concerns last year over poor management and decision-making at the fund. Internal auditors were “not provided with evidence” about why repayments were repeatedly missed.

“No supporting documentation to formally agree the non-repayment of the loan was provided,” the report said. “Minutes of meetings are …  not taken showing any decisions made.

“There is a risk that decisions made on the loan have not been formally agreed, documented and processes are not in place for the management of risks.”

The fund is run by some of the London authority’s top officers, including Khan’s chief of staff, David Bellamy. The deputy mayor of London for housing, Tom Copley, also sits on the steering group that makes executive decisions about the fund.

Auditors raised questions over whether Khan, who has been mayor since 2016, will eventually use financial “support” from his taxpayer-funded budget to help settle its debts, the FT reported.

A spokesperson for Khan said: “The mayor is working closely with GLA Land and Property Limited to help build a fairer London for everyone, delivering up to 68,000 new homes while helping to create thousands of jobs.

“The repayment schedule for this loan was revised due to the prolonged national economic downturn that severely impacted property and construction industries across the UK. The first repayments were made in March 2024.”

GLAP told the Financial Times it had paid £33m towards its outstanding debts in March, and that its most recent auditor report from this year showed some improvements by management, including minute taking.