David Conn: Residents vow to battle on over Arsenal's new home

Local residents' groups and businesses battling against Arsenal's planned new stadium will renew their opposition after a crushing report by the Government's planning inspector concluded the massive £410m development would be socially divisive, blight Islington's already poorest people by siting a huge new rubbish processing plant next to their homes, could damage local employment prospects, lose vital green spaces and cause major inconvenience to residents.

The inspector, Rupert Grantham, concluded, after a five-week public inquiry at Islington Town Hall, that a controversial and key aspect of the scheme, proposed Compulsory Purchase Orders, which would allow the council to force local businesses off their sites so that the land would be cleared for the stadium project, should not be allowed because there was no "compelling public interest" case for them. Nevertheless, the office of the Deputy Prime Minister, John Prescott, last week overruled his inspector's judgements, saying Prescott was "minded to approve" the CPOs. The club said it was "delighted" with his decision and is confident the stadium will go ahead as planned.

The Islington Stadium Communities Alliance, which represents community groups, businesses, trade unions and residents opposing the project, confirmed it will be writing to Prescott protesting his decision within the required 28 days.

"We cannot understand how the Government can approve these unprecedented CPOs, in direct contradiction of its own report, the first independent scrutiny we've had, which agreed with us overwhelmingly that this scheme is appalling for the area," Alison Carmichael of ISCA said.

The CPOs would give the council a legal right to force businesses on Queensland Road, in the Ashburton Grove industrial estate, many of which have occupied their factories or warehouses for decades, to accept lower, industrial prices for their sites, and leave. The council will then pass the land to Arsenal, who will make huge profits by selling it to developers, with planning permission, for lucrative Islington housing. If, as expected, Prescott confirms his approval for the CPOs, probably in February, the opponents then have six weeks to appeal. The report's unambiguous disapproval of the CPOs and the scheme in general - which the inspector said brought "disappointingly low" benefits to the area - makes an appeal more likely, and it could take a year to be heard.

Whether this pushes further back the already delayed project is unclear, however. Keith Edelman, Arsenal's managing director, told me it will not, and the club is understood to be confident that a consortium of banks, led by the Royal Bank of Scotland, is close to agreeing the £260m loans the club needs to build the stadium.

Edelman said the banks are not nervous about the CPOs, because Arsenal do not in fact need these properties for access to the stadium, and the profits from selling them are paying for the wider scheme, not the stadium itself. "The residential and commercial developments we are planning for Queensland Road," he said, "have not been put into our financial model."

This does, however, contradict the government's own letter, which says clearly: "Arsenal FC would use money generated from the subsequent sale of land ... to help fund the construction of the stadium."

As Arsenal's planning permission relates to the whole scheme, it is also unclear whether the club could plough ahead with the stadium while this other part of the development remains in doubt. Edelman was adamant it could. The Inspector was unsure, but overall his report was damning - more of the local Islington Council than the football club, which only wants a new 60,000-seater stadium to enable it to make enough money to compete with Manchester United and the newly roubled Chelsea. The council, when giving planning permission, claimed to have wrested from Arsenal major benefits including a new, improved waste station, affordable housing, new health centres and nurseries, parkland and public transport improvements in this down-at-heel area either side of the Holloway Road.

But the Inspector said the council had been "opportunistic" - grabbing the chance of a quid pro quo from Arsenal - rather than producing its own plans after proper consultation with the local community. He rejected the idea that this is regeneration at all, saying it is "simply a redevelopment scheme" which favours Arsenal's "private interests".

He acknowledged that the stadium would be "world class ... appropriate to London's role as a world city", and added that the stadium's "positive impact" would be one of the project's main benefits to the area. However, he enunciated a list of downsides. Ashburton Grove is currently dominated by a huge concrete Lubyanka of a waste station, a monumental, smelly eyesore, which he described, somewhat generously, as "primitive". That will be demolished and become the site of the stadium itself. Arsenal are paying for a new £60m plant, being built across Holloway Road on Lough Road, a modern, cleaner facility, which will recycle more waste. But whereas the current one is surrounded by factories and warehouses and some distance from homes, the new one is right next to the Ringcross Estate, council housing for the borough's poorest residents. They can now expect to host 1,000 lorries a day, forming long queues of garbage for dumping.

"I can understand," the Inspector said, "how the residents of the Ringcross Estate feel stigmatised and further marginalised by the introduction of a large waste-handling facility into their neighbourhood."

Furthermore, he found, the new affordable housing, a key benefit claimed by the council and the club, is being built there too, opposite and next to the waste centre. "A major disadvantage of the AFC scheme is that low income households would be concentrated ... thereby reinforcing social divides."

Other specific conclusions were that the extra jobs produced will be outnumbered by the increase in people living in the area and so could reduce local people's employment prospects, and that green space, in a borough which has the least in London, would be cut. The Inspector said some local shops would benefit, however, and that welcome improvements would be made to Holloway Road tube station. "The level of regenerative benefit that is likely to accrue overall," he concluded, "is disappointingly low."

At a time when football is seen by many to be commercially overblown but morally curdled, the report has some sobering reflections for the game and its fans, not just Arsenal fans, most of whom want a bigger stadium, although they worry about the immense cost to the club. The Inspector's report shone some light on the financing, saying Arsenal plan to pay the £260m back over 25 years from match ticket sales and the commercial naming of the stadium. The club itself is understood to be putting in £145m, which includes £30m from Granada for 4.99 per cent of the club's shares.

Football's glamour and the sense of belonging intrinsic to being a fan makes it easy to assume that football stadia are good for communities, but the report cites research that a major new stadium does not inevitably lead to regeneration, that Arsenal's local shopping area loses, rather than makes, money on match days, except for pubs and fast food joints, and that this crowded part of London will be put under heavy pressure from 60,000 people pouring in - 95 per cent of Arsenal season ticket-holders live outside Islington - 40 times a year.

The club has said it will give priority for new season tickets to Islington residents, but the Inspector dismissed that policy as having "little to do with the public interest but of interest to existing supporters wealthy enough to afford them". Current match-day prices at Arsenal are £31 to £46 in the East and West Stands, £26 to £48 in the North Bank and £31 in the Clock End.

Of the claims made for the development's regeneration, the inspector's verdict was: "The AFC redevelopment scheme would offer little to benefit the more deprived areas of Islington."

The letter from Prescott's office does not greatly illuminate why they are "minded" to overrule this judgment, but simply concludes the opposite, that the project is indeed a "comprehensive regeneration scheme" and therefore the CPOs can be justified in the public interest.

Angela Clare, a resident living in Adams Place, by the Ringcross Estate, told me she and her neighbours were watching the new waste station going up with horror: "It's in our faces and it's a massive blight." She believed that the politicians had ignored the local community in favour of the "sexy vote" of a new stadium for Arsenal. "Football's like the new religion," she said, "but it's not as if this is all being done even for the good of the supporters. It's all about getting more of them in, so that Arsenal can make more money."