LDN Weekly – Issue 157 – 20 January 2021
BUDGET SEASON
The latest poll suggests that incumbent Labour Mayor Sadiq Khan retains a substantial lead over Conservative candidate Shaun Bailey. No huge surprise there, but an interesting question is begged.
| No images? Click here  BUDGET SEASONThe latest poll suggests that incumbent Labour Mayor Sadiq Khan retains a substantial lead over Conservative candidate Shaun Bailey. No huge surprise there, but an interesting question is begged. What sort of campaign would we be getting, almost three months out from the Mayoral election, if this race was close? A hotly contested Mayoral election might include some outlandish ideas for generating income for City Hall and some blue sky thinking to reinvigorate a post-Covid, post-Brexit London. Maybe that is still to come… Perhaps more importantly, a Tory candidate that felt like a real contender would give the Government a reason to attend to the capital. Reports today suggest we lag behind on vaccinations because London’s particular needs were not apparent when the doses were dished out. Is this what the other city regions have felt like all along?! Meanwhile, the stories in LDN today, mostly focused around the financial situation facing local authorities, City Hall and Whitehall, as well as some intriguing planning decisions and other announcements from the Communities Secretary, provide a lot of potential political fodder. All of which, in a parallel universe, could make for a lively and even constructive run in to polling day. If we don’t get that in real life, we’ll try to provide a taste of it here at least.  TFL FINANCIAL SUSTAINABILITY PLANTransport for London’s Financial Sustainability Plan was submitted to the Department for Transport last week. A requirement of the second TfL bailout agreement between the Government and TfL in October 2020, it sets out how TfL can achieve financial sustainability by 2023/24. This includes suggested cost-cutting measures, as well as proposals for generating income. However, the Plan also contends that Government support will be needed in 2022/23 and ‘potentially beyond’, to the tune of £3.1bn for 2021/22 alone and an average of £1.3bn per year from 2023/24 to 2029/30, ‘for new capital investment’. With the Mayor having already confirmed that fares would increase by 2.6% from 1 March, much of the media attention has focused on the plan’s suggestions to boost revenue, including a possible introduction of a Greater London Boundary Charge for vehicles entering London. The London Conservatives and some newspapers have reacted by focusing on this proposed charge as an act of ‘highway robbery’ by the Mayor. On the other end of the spectrum, the RMT trade union has called the plan as a whole ‘a massive missed opportunity and a capitulation to Tory austerity.’ We were particularly interested to see the plan setting out a compelling case for the establishment of a ring-fenced property entity to take on the development of TfL’s estate, with its own governance arrangements and business plan. Separately, there are growing concerns that Eurostar could soon 'collapse.' Business leaders and MPs are calling on the Chancellor to bail out the service, which has seen a 95% reduction in passengers due to Covid restrictions. OF BUDGETS AND TAXESIf you’re wondering why everyone is so obsessed with public finance these days, it’s because national, regional and local authorities are all simultaneously bashing out budgets for 2021/22. After almost a year of throwing money at Covid-19 (and losing revenues to the same), it’s no surprise that tax hikes are the talk of the town in advance of the Chancellor’s Budget statement on 3 March. From our perspective, Ministers floating two possible new levies on developers to help pay for cladding remediation is particularly significant. We’ve also noticed, with interest, campaigns by the Fairer Share charity, the Labour Party and backbench Tory MPs, variously urging the Chancellor to either scrap, drastically reform or freeze Stamp Duty and Council Tax. The CBI is also banging the drum for a long-overdue rehaul of the Business Rates system. A Business Rates relief extension meanwhile features prominently in Sadiq Khan’s Budget wish-list, published not long after he accused the Government of ‘sidelining’ financial services in the Brexit negotiations ‘in order to further promote an anti-London agenda.’ Beyond Whitehall, the Greater London Authority and London’s boroughs are working to finalise their budgets before April. The Mayor has already announced he will be raising his portion of Council Tax by 9.5%, something he is touting as a success, on account of being ‘less than half’ of the 21% increase his ‘opponents predicted and expected.’ The London Assembly’s Budget & Performance Committee has meanwhile published critical responses to the draft 2021/22 consultation budgets for the GLA Group, the LLDC, the OPDC, the LFB and MOPAC. As for London’s Town Halls, according our latest count, about a third have so far indicated their intentions for changes to Council Tax rates, all suggesting they will be raising them by the full 4.99% (or thereabouts) allowed by December’s provisional local government finance settlement. More on this in the weeks ahead. LONDON'S POPULATIONRecently-published research seems to suggest that the capital is… leaking people. Is it really? First came a spate of articles citing PwC’s latest UK Economic Outlook, which predicted that ‘London’s population is expected to decline for the first time in the 21st century.’ PwC mainly attributes this to early signs that fewer Brits want to live in the capital (and fewer Europeans want to live in Britain). However, as highlighted by OnLondon, this prediction seems to rest on rather thin evidence. But then came analysis by the Economic Statistics Centre of Excellence (ESCoE), suggesting that in the year up to the third quarter of 2020, up to 1.3m people born abroad left the UK. Of these, they said, 700,000 may have left London alone, making for a staggering 8% drop in the capital’s population. But as per the Financial Times, these estimates are actually based on an analysis of flaws in official labour and migration statistics. As we said in our 9 December edition, it is perfectly conceivable that the early 2020’s could see London’s population growth stall or even go negative. But let’s not get ahead of ourselves: the most authoritative measure of London’s population is the Census, of which we get but one every decade. Thankfully, England and Wales' next nationwide headcount is due to take place this March. JENRICK BACKS DOWN?Communities Secretary Robert Jenrick has made two key decisions in relation to major schemes in London. First, he has confirmed that he will not call in Avanton’s planning application for 453 homes in Richmond. The Council had refused the application in 2019, but it was then called-in by the Mayor who granted permission for it in October 2020. The application was then referred to Jenrick, who has now said that it will not be called in. The scheme will see the demolition of existing buildings on the site and the construction of four buildings, the highest 11 storeys, which will provide 173 affordable homes, as well as retail, commercial and office space. Construction should start this summer. Separately, Jenrick has responded to an extraordinary letter from CEO of developer Inland Homes Stephen Wicks, covered in last week’s edition of LDN, by confirming that their scheme at the Master Brewer site in Hillingdon will not be called in after all. Jenrick had issued a holding order on the application after it was approved by the Mayor, following the local Council’s refusal in 2019. Wicks responded to the news by calling for developers to ‘fight the insane bureaucracy that is the UK planning system’. MAY ELECTIONS LATESTFor the moment, the local and regional elections scheduled for 6 May are still on. So what’s the latest? The Telegraph reported only today that “Boris Johnson has resolved that English town hall elections scheduled for 6 May should go ahead as planned.” There has also been a new poll from Redfield and Wilton Strategies (RWS) on the London Mayoral elections, showing Sadiq Khan steadily ahead with 49% of first preference votes (-1 from their last poll in October), with the Conservatives’ Shaun Bailey at 28% (n/c), followed by the Lib Dems’ Luisa Porritt at 10% (n/c), the Greens’ Sian Berry at 9% (-1) and UKIP’s new candidate Peter Gammons at 2%. But as per the detailed results of the poll, there are still a lot of ‘undecideds’ (a full 20%) and less than 50% of respondents say they are certain to vote. In any event, Shaun Bailey’s gaffes seem to be outweighing his spirited attempts to discredit Sadiq Khan’s administration. Indeed, some commentators are now arguing that Bailey may turn out to be ‘the greatest gift Khan could ever wish for.’ Meanwhile, an intervention by Local Government Minister Luke Hall means that Croydon may have to again change its plans for a governance referendum for residents to decide whether they wish to shift to a directly elected Mayor system. This was first set for May, then changed to October and now looks likely to be held on 6 May. Oh, and if you haven’t already, remember to register to vote. You can also apply for a postal vote. PEOPLE NEWS
 MHCLG LATESTRobert Jenrick and his team have not just been busy with planning decisions of late. Since our last edition, we have seen their Ministry churn out a stream of announcements, some meatier than others:
EVENTSThough we are all suffering from ‘Zoom fatigue’ and the events calendar is looking a bit thinner than usual this time of year, we are pleased to see several major annual fixtures flying the flag, despite everything:
It’s also worth noting that the NLA continues to host a range of interesting events. The next, on 28 January, is a webinar on ‘Evolving Retail Environments’. RESEARCH ROUNDUPWe’ve picked up a number of ‘must-read’ research reports and publications worth bringing to your attention:
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