LDN Weekly – Issue 132 – 1 July 2020

FDR OR... FD-BLAH?

We don’t normally start LDN with an obituary, but this week we make an exception.

Late last week Tony Pidgley, founder of The Berkeley Group, died following a stroke.  He was 72.  It is hard to think of a single business, or single person for that matter, to have made as big an impact on London’s residential market as Berkeley and Tony.  Over the last 30 years the company, including subsidiaries like St George and St William, has regenerated large swathes of Greater London and the home counties. Not to everyone’s taste, mind, but he believed passionately in delivering great quality homes.  

Much has been written in recent days about him – his early morning Board meetings, his surprise visits to developments to check up on things and his uncanny ability to call the market.  All were true and whilst he was in many ways somewhat traditional in some of his views, he was way ahead of many of his contemporaries in the industry when it came to continually pushing the boundaries for development.  

Working for St George in the 2000s my dealings with him were at best distant.  But in the 2010s I got to know the man a little better and had the pleasure of interviewing him a few times, most notably at MIPIM one year. I recall asking him if anything kept him awake at night.  His reply - ‘the cost and supply of glass.  It all comes from one supplier – in China.’  

In his later years he played a significant role in the capital as President of the LCCI and gave the organisation a strong voice as, whenever he spoke at an event, the room was always packed.  

We will be making a donation in his memory to the Berkeley Foundation, which has supported over 100 charities and good causes to the tune of £20m since 2013

- Robert Gordon Clark, Executive Chairman  

SPIN, SPIN, SPIN

Yesterday, the Prime Minister visited Dudley to unveil the Government’s ‘build, build, build’ programme to deliver ‘jobs, skills and infrastructure’ and spark recovery in the wake of the COVID-19 lockdown. Equally eager to demonstrate that the Government is delivering on its election promises, the PM also spoke of a ‘mission to unite and level up’ the country. We noticed that, while he did mention London, this was mostly as a rhetorical counterpoint to areas that have been ‘left behind’ (rather than a city of nine million souls). The PM was eager to frame his speech as the opening chapter of a British ‘New Deal’, but most commentators appear to have been less than impressed. The Guardian has argued that none of the funding he announced is actually new, with the BBC’s fact-checkers inclined to agree. Indeed, the total £5bn figure has been called ‘peanuts’ by The Times, and the comparison with Franklin D. Roosevelt’s 1930s New Deal has been dubbed ‘absurd’ by the New Statesman. As for Inside Housing’s take: Boris’ vision was more ‘blah, blah, blah’ than ‘build, build, build.’ Indeed, as highlighted by London Councils, Shelter and others, the PM’s announcement did not appear to include more funding for new affordable homes and if anything seemed to herald a reduction of the relevant budget (something the Government has since denied).

Money aside, the speech did incorporate a quite a lot on policy, including a series of proposed reforms to the planning system (see also Planning Resource’s summary). The controversial central focus of these reforms is to enable, mostly through an extension of Permitted Development Rights, the redevelopment or change-of-use of unused or underutilised buildings. It was also confirmed that a Planning Policy Paper will be published in July, though one wonders whether this signals a scaling down from a previously promised White Paper. A number of organisations have lined up to question whether this is really the right focus for planning reform, particularly in light of the wider sustainability and infrastructure growth agendas, from the Federation of Master Builders, to the UK Green Building Council, London First, and RIBA, among others.

MIND THE (BUDGET) GAP

Meanwhile, closer to home, last Friday the Mayor published Budget Guidance providing a breakdown of almost £500m in savings that will be required across the GLA Group over the next two years - if, as he says, ‘Ministers fail to act.’ The release of this guidance is not in itself unusual, as it is part of the normal annual budget-drafting process. But it does provide a stark assessment of the financial hit taken by the GLA due to the pandemic. It is also clearly an exercise in both expectations management and track-covering (remember Khan has an election to win next year). This builds on last week’s announcement that the GLA Group faces an estimated £493m budget shortfall and of linked plans to (potentially) move City Hall to Newham to save £55m over five years. Based on its ‘reasonable worst-case’ estimate, the GLA expects to suffer a 7% loss in council tax revenues and 11% in business rates income by March 2022, and the table below shows the allocation of cuts the GLA Group’s various bodies would consequently have to sustain in that period (again, assuming the Government does not extend further financial support). The Mayor’s draft consolidated budget is to be published in December 2020 and should be adopted (following scrutiny by the London Assembly) early next year. 

LONDON PLANNING LATEST

Last week we covered the approval of the Museum of London’s plans for a new cultural destination in the City of London and the second defeat of plans for the redevelopment of Holborn Studies in Hackney. However, the past couple of weeks have seen quite a few other major applications make headlines across London. Last Wednesday, Brent’s planning committee approved a mixed-use scheme for the redevelopment of Capitol Industrial Park into 500 new homes (28% affordable). South of the river,  another mixed-use scheme, which incorporates 402 flats (35% affordable) was approved by Wandsworth’s planning committee. We were also especially pleased to hear that the Communities Secretary and the Planning Inspectorate have approved U+I and Brockton’s Newcombe House scheme in Kensington and Chelsea, a project long supported by LCA. However, other schemes have not fared so well: plans for a redevelopment of a former waste processing facility site in Merton, which included 850 homes (35% affordable), were refused by councillors against officers’ recommendation for approval; and up in Enfield, councillors rejected plans for 216 homes (35% affordable) across five blocks at Southgate Office Village, also against officers’ recommendation.

LONDON HOUSING MARKET WOBBLES 

Over the past few days, anyone involved in London’s private housing market is likely to have winced more than once at the headlines. Only today, Nationwide’s Housing Price Index reported house prices across the UK this June were down by 0.1% compared with June 2019 – the first ‘negative annual growth’ since 2012 – and by 1.4% compared to the month before. However, the Index also found that London prices actually rose by 2.1% over the course of the second quarter as a whole and that ‘average prices in the capital are now just 3% below the all-time highs recorded in Q1 2017.’ Property market analysts polled by Reuters earlier this month were also fairly optimistic, expecting prices will fall by 5% this year but recover strongly with a 2% rise next year and 4.3% rise in 2022. Then again, the fluctuations of house prices mean very different things to different people. A poll by Legal & General published  over the weekend suggests that Londoners are twice as likely to be planning to move compared to other Britons, in large part due to the high cost of housing in the capital. And only yesterday, housebuilder Redrow revealed it’s reading of the tea leaves, on the basis of which it has decided to refocus its investment outside London (which currently accounts for 15% of its turnover). 

GREEN AGENDA BACK ON TRACK? 

In yesterday’s speech, the Prime Minister pledged that the Government would ‘build greener’, as part of their wider environmental and air quality commitments, including the target to reach net zero emissions by 2050. While his pledges have been extensively questioned, it is clear that over the past week or so the ‘green agenda’ has leapt back to the fore: 

• The Government has announced an £80m investment to cut carbon emissions from homes and businesses. 
   
• The Committee on Climate Change has published their latest progress report to Parliament, recommending five investment priorities for the Government. 
   
• The Green Alliance has published a report entitled Blueprint for a resilient economy. It presents five ‘essential building blocks that will help to bring long term prosperity, health and security to the people of the UK’. 
   
• Greenpeace has also published a report which argues that a £100bn green economic recovery package could create 1.8 million new jobs in the energy, transport and housing sectors as well as revive the economy. 
   
• The Institution of Civil Engineers has published its report into the contribution of the UK’s infrastructure systems in contributing to the Government's net zero target. 
   
• We were also interested to see that, as part of the London Festival of Architecture, the London Collective has launched the Park Power project to ask the public for their opinions about London’s parks as well as what changes they would like to see in order to create ‘a vision … for the ways they could be future-proofed and become even more valuable’. If you have a spare few minutes, do fill in the survey about your own local parks and open spaces.
   
• Only this Monday, we attended a Centre for London webinar on London's Green recovery, where Sadiq Khan made the case for putting sustainability at the centre of the national economic recovery agenda. More on this below.

And we could not help but notice that the green movement chalked up a large number of successes in the second round of France’s municipal elections at the weekend. While the Socialists’ Anne Hidalgo held on in Paris, it seems that the endorsement of green parties could well have ‘won her re-election’. Sadiq is highly likely to be paying close attention, ahead of May 2021.

LIFTING LOCKDOWN PAINS

Yesterday marked 100 days since the UK’s lockdown began, 51 days since the Prime Minister signalled a shift from ‘stay home’ towards the relatively more relaxed ‘stay alert’ slogan, 21 days since some students returned to schools and 14 days since ‘non-essential’ shops were allowed to open. The Government is now focused on implementing the next step, with pubs, bars, museums, restaurants and certain other public venues allowed to open under certain conditions from this Saturday. Proprietors, staff and officials have been working flat out to enable the reopening of the wider hospitality, cultural and entertainment sectors: the Business and Planning Bill now making its way through Parliament is partly intended to facilitate ‘al fresco’ food and drink service, while the Culture Secretary recently presented a ‘roadmap’ specifically for helping the performing arts return to normal. But is it all enough? Police forces in London and across the country have warned that opening pubs and bars on a Saturday could be a recipe for trouble. Meanwhile, organisations representing performers and venues alike have questioned the helpfulness of the Government’s plans for the return of live theatre and music, arguing that the sector primarily needs further financial support.

...AND THE PROSPECT OF LOCAL LOCKDOWN(S)

Yesterday also marked another, more worrying , milestone: the Government announced its first ‘local lockdown,’ to tackle an apparent resurgence of the pandemic in Leicester, which will see its ‘non-essential’ shops close once again and pubs remain shuttered this weekend. The East Midlands city’s Mayor has complained that the process of securing information and guidance from the Government in the leadup to the decision was ‘intensely frustrating’ (though he has also taken flak for breaking lockdown rules himself). The Mayor of London has meanwhile called on the Government to provide more clarity on the information, powers and resources made available to local and regional authorities managing local COVID-19 outbreaks. Khan’s request is a sensible one, considering signs that other parts of the country, including some London boroughs, are seeing an apparent rise in new cases of the virus. 

WHITHER LONDON'S 'GREEN' RECOVERY?

On Monday, we attended Centre for London's event on the capital’s ‘green recovery’, which you can also watch here. The live-streamed webinar kicked off with a speech by (and brief Q&A with) Sadiq Khan, followed by a panel discussion featuring Centre for London's  Director Ben Rogers, Deputy Mayor for the Environment and Energy Shirley Rodrigues, London First’s Corporate Affairs Director Muniya Barua and C40 Cities Climate Leadership Group Executive Director Mark Watts. The event was extremely timely and we were excited to hear more about Sadiq Khan's plans for the future. The panel discussion was informative and wide-ranging, not to mention encouraging – as it suggested that key stakeholders from across sectors are broadly in agreement on what should be the capital’s key priorities. We were, however, underwhelmed that the Mayor seemed to be in ‘energy-saving mode’. His appearance only lasted about 15 minutes and barely scratched the surface of the issues at hand. That is not to say that Khan and his team do not have a coherent and ambitious policy agenda for a possible second term; but we came away from the event feeling that, actually, they had told us fairly little about it. 
 

ALL OUT AT KX

As the UK gears up for the hospitality sector to reopen this weekend, we have been supporting our client, King’s Cross, in reopening their site. On Saturday (4 July), more than 80% of the eateries and bars in King’s Cross and Coal Drops Yard will be reopening their doors, alongside many stores. To celebrate the reawakening of London, King’s Cross has also partnered with street artist Andy Leek - best known for his uplifting ‘Notes to Strangers’ project - for a three-month residency, as well as unveiling Pools 2020 at Granary Square, the latest artwork from award-winning German artist Stephan Zirwes.
 

LDN CONTRIBUTORS 

Robert Gordon Clark, Executive Chairman and Partner

Jenna Goldberg, Director

Stefanos Koryzis, Research Manager

Emily Clinton, Research Executive

Mel Webber, Junior Designer  

LCA prides itself on its intelligence-led approach to PR and communications and our dedicated research team monitors London politics, news and issues as it happens. If you would like to know more about LCA or anything in this edition of LDN – London in short please get in touch. 

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LDN is put together by a dedicated team at London Communications Agency. The content for each edition is developed from news drawn from the last week from every London local paper as well as the regional and national press, from intelligence gathered by monitoring local, regional and national government activity and from the insight and expert knowledge of the entire LCA team.

If you would like to know more about anything covered in this or any other edition of LDN or if you would like to know more about LCA please contact Duncan Hepburn on 020 7612 8480 or dh@londoncommunications.co.uk.

We strive for balance and accuracy at all times; however, if you feel we have made a mistake, omission or have misrepresented a story or issue please alert the team by contacting Duncan using the details above.