IT'S ALL HAPPENING THIS WEEK
While everything is overshadowed by the delayed Brexit deal vote and a vote of no confidence of Theresa May this evening, much is also afoot in London.
The latest London Polling by Queen Mary University of London may show Sadiq miles ahead of his rivals for the 2020 Mayoral contest, but his administration is being rocked by the financial impact of Crossrail’s delay. This edition examines in some detail the project’s latest bailout, the new TfL Business Plan, as well as a host of related issues.
We also pore over a number of planning and development stories, present the longest list of people moves ever seen by this publication and consider the elusive Local Government Finance Settlement for 2019/20.
As always, we’d love to hear your feedback and do follow us on Twitter @LDNComms if you don’t already.
LONDON POLLING LATEST
The latest London Polling by YouGov for the Mile End Institute at Queen Mary University of London suggests that as things currently stand, Sadiq will comfortably secure a second term in the 2020 Mayoral elections. In a head-to-head contest 62% of respondents said they would vote for Sadiq, compared to 38% for Conservative Shaun Bailey. In a contest including all other candidates, 55% opted for Sadiq, 28% for Bailey, 7% for the Green party’s Sian Berry and 4% for the Liberal Democrats’ Siobhan Benita. The poll actually suggests that Sadiq could – in an historic first – be elected in the first round of voting. Indeed the figures imply Sadiq is more popular than his own party. While 55% said they would support him in a Mayoral race, 49% said they would vote Labour in a general election. Bailey’s 28%, on the other hand, is markedly lower than the 33% general election voting intention for the Conservatives. Sadiq’s approval rating has also increased since the last polling in September, despite concerns over his performance in tackling crime and managing various transport issues, though it remains, unsurprisingly perhaps, lower than it was at the beginning of his term - in this latest poll, 47% thought that he is doing well, compared to 36% who said he is performing badly. With well over a year to go until the Mayoral election, there is yet time for the situation to change, but it is currently looking like a one-horse race.
IT WAS SUPPOSED TO BE OVER BY CHRISTMAS
The Financial Times again had the scoop on Crossrail, reporting over the weekend that an additional bailout for the project is imminent and that its opening may be further delayed. According to the article, this is due to enduring difficulties in delivering new signalling systems, trains and stations. The same piece stated that Tony Meggs, Chief Executive of the Infrastructure and Projects Authority, was poised to be nominated as Crossrail Ltd’s new Chair, while former Labour MP (and Minister for London) Nick Raynsford has been tipped as its Deputy Chair. In the days since, all of the above has been confirmed. According to the Department for Transport’s (DfT) relevant announcement, the project’s additional funding needs are assessed at anywhere between £1.3bn and £1.7bn. To cover this, the government will provide a loan of up to £1.3bn (which replaces the £350m interim financing package announced in October) topped up by a £100m cash contribution from the Mayor. If any additional funds are needed, the DfT has also committed to provide up to £750m more in loans. All the above means that Crossrail’s overall funding envelope now stands at £17.6 billion.
PICKING UP THE BILL
There is no doubt whatsoever that this latest development will have a significant knock-on effect on GLA and TfL budgets. Sadiq plans to repay the government’s loans through a combination of the existing London’s Business Rate Supplement (BRS) as well as the new Mayoral Community Infrastructure Levy (MCIL2) – which comes into effect next year, but was originally intended to pay for… Crossrail 2. Speculation as to what other services and projects will suffer as a result has given way to confirmation that TfL is taking a substantial hit in the updated TfL Business Plan for 2018/19 to 2023/24, which was published only yesterday. One telling headline from this document is the admission by TfL that ‘we have moved back our forecast for breaking even by one year to 2022/23’ due to Crossrail’s delay but also, ominously, ‘lower demand forecast for our services’. As pointed out by the Guardian and Financial Times, the Business Plan confirms other capital projects will indeed suffer, with the modernisation of Piccadilly line signalling and the upgrading of Camden Town and Holborn stations notable examples of projects to be deferred. The absence of any clarity in the Business Plan on Crossrail 2’s funding package and future in general is also concerning. The Business Plan will be considered and in all likelihood approved by TfL’s Finance Committee tomorrow.
THE BLAME GAME
Meanwhile, the Mayor has also released dozens of documents relating to Crossrail, following a legally-binding summons by the London Assembly’s Transport Committee. In a relevant announcement, Sadiq asserts that the documents ‘are a serious indictment of Crossrail Ltd’s failed governance’ and insists that he was only told the project will definitely be delayed on 29 August. He does however concede that he was warned on 26 July that the initial December 2018 opening date was at ‘high risk’. Sadiq and former Crossrail Ltd Chair Sir Terry Morgan are both expected to appear at an extraordinary session of the London Assembly Transport Committee on 21 December to lay out their positions in detail.
SO WHAT ABOUT FUNDING THE OTHER CROSSRAIL?
If a relevant reference above made you think ‘where are we with MCIL2 anyway?’, you’re in the right place. The Charging Schedule for the new Levy has been making its way through the laborious process of an Examination in Public since late 2017 and the independent examiner, Keith Holland, has only recently published his Report. Holland concluded that the Mayor’s draft proposals are appropriate and acceptable – but also recommended the exclusion of the Elephant and Castle Opportunity Area from the Proposed Central London Charging Area for office, retail and hotel use, on the basis that it would threaten the viability of development in the area. Assuming the Mayor does not attempt to contest the Examiner’s recommendation, MCIL2 should be levied from 1 April 2019 and will supersede the MCIL1 currently levied in central London and certain other areas. As noted above, it now remains to be seen how the rerouting of MCIL2 revenues for Crossrail will affect ongoing joint work and negotiations between Government and the Mayor over the funding package for Crossrail 2.
OXFORD STREET: THE SEQUEL
We do know at least one area where the Mayor will be saving funds. Last Thursday, City AM reported that Sadiq has written to Westminster Council Leader Nickie Aiken to announce that he will be withholding £80m in funding earmarked for Oxford Street’s transformation. The allocation was initially set aside for the pedestrianisation plans drawn up jointly by TfL and the Council and subsequently abandoned by the local authority after the May local elections. In his letter to Aiken, Sadiq reportedly asserted that the alternative £150m scheme drawn up by Westminster is ‘unambitious’ and that its decision to ‘derail’ the original plans has ‘shattered any confidence I have in a positive working relationship with the council’ on the future of the street. On a relevant note, OnLondon has highlighted the publication of a study by Arup, intended to identify ‘future growth scenarios for Oxford Street and the West End’. The study was commissioned jointly by the Mayor and Westminster Council back in August, at a time when there were presumably still hopes that City Hall and Town Hall could yet bridge their differences. While a rapprochement now seems doubtful, the report remains a valuable resource for anyone with a stake in the future of the West End’s property and retail.
- Following a public hearing, Deputy Mayor for Housing Jules Pipe has granted permission for the construction of a new a 17-storey tower in Abbey Wood. The scheme was called in by the Mayor in August after Greenwich Council rejected the proposals on grounds including excessive height, as well as insufficient affordable and family-sized housing. Pipe’s decision is understood to be based on some relatively slight amendments to the plans, but most notably a commitment to delivering 35% affordable housing on site.
- Meanwhile, City Hall has also granted permission for the controversial redevelopment of the Elephant & Castle shopping centre and the London College of Communications. Delancey’s project overcame an extensive campaign by local campaigners, objections by Historic England, and initial rejection by Southwark Council. The revised proposals, which have been accepted by the council, will now deliver 978 homes (35% affordable, of which 12% will be for social rent), new retail and leisure space as well as a new university campus - all in several buildings up to 35 storeys tall.
- Finally, according to a report submitted to the last meeting of the Homes for Londoners Board, Whittington NHS Trust is set to sign a memorandum of understanding (MoU) with the GLA which will ‘formalise a working relationship’ between the two. The Trust is undertaking a ‘masterplanning project’ for the transformation of its estate and the draft MoU, to be signed in December 2019, foresees GLA staff providing expert advice to identify and realise opportunities for housing development. In return, the Trust will commit to paying for any relevant staff costs, as well as supporting the Mayor’s 50% affordable housing target. The report hails the MoU as ‘a new way of working’ with ‘the potential to be offered to other public-sector landowners when reviewing service provision and identifying potential opportunities for housing’.
In the world of London local and regional government:
- At a busy Full Council session this Monday, which also saw members approve a new Budget for 2019/20 and a new Local Plan, Newham Mayor Rokhsana Fiaz announced a Cabinet reshuffle, which sees all existing members remaining in place (though some with amended portfolios), and the appointment of four new full lead members and three new assistant Cabinet members. Councillors also approved the extension of Katherine Kerswell’s term as interim Chief Executive until August 2019.
- Sean Harriss has been appointed Chief Executive of Harrow Council. Harriss was previously Chief Executive at Lambeth Council and Bolton Council.
- Former Lewisham Chief Executive Ian Thomas has been appointed as Kingston’s Chief Executive.
- UKIP London Assembly member Peter Whittle is the latest figure to quit the party, saying that it ‘is ceasing to exist’. He continues to sit on the Assembly as an Independent.
- At NHS England, a new Executive Group including seven new regional directors has been appointed. Sir David Sloman, the Group Chief Executive of the Royal Free London NHS Foundation Trust, has been appointed London Regional Director.
- Stansted Airport has appointed Gerry Whyte as Delivery Director for its transformation programme. Whyte was formerly Preconstruction Director at Laing O’Rourke.
- Trevor Goodman, former Executive Director at Estates Gazette, has been appointed Director at MIPIM UK.
- It is also worth noting that, as announced earlier in 2018, Savills Group Chief Executive Jeremy Helsby will be standing down at the end of the year after almost 40 years at the firm. He is set to be replaced by Mark Ridley, current CEO of Savills UK and Europe, in the New Year.
THE LOCAL GOVERNMENT FINANCE SETTLEMENT THAT NEVER WAS
Last week, Communities Secretary James Brokenshire deferred the announcement of the provisional 2019-20 Local Government Finance Settlement to an unspecified future date, due to Parliament’s focus on the Prime Minister’s Brexit deal. With the ‘meaningful vote’ itself now also deferred and the Prime Minister’s very position at stake, it remains unclear when the settlement will be published – though it could still be issued within this week, with the Local Government Chronicle reporting it could be published as soon as tomorrow. The provisional settlement will confirm central government’s funding allocations for all English local authorities in the coming financial year. It is therefore a crucial milestone for London’s boroughs, which by 2020 will have seen their core government funding for services fall by an estimated 63% since 2010. London Councils, the organisation which represents the 32 boroughs and the City of London, has launched a campaign to drum up support for its asks of government, alongside a report which lays out in detail the financial challenges councils face. But the biggest battle is still ahead, as an ongoing Fair Funding Review will determine how £19bn of government funding will be allocated to councils from 2020.
TfL THE HOUSEBUILDER
TfL has announced that Argent Related, Grainger and Greystar have been shortlisted as potential build-to-rent investment partners for 10 sites across London. Sadiq is keen to see TfL play a major part in his housebuilding drive and the transport authority (which is also eager to see its land producing much-needed revenue) is planning to build over 10,000 homes on its land. A large proportion of this target – no less than one third - is intended to be met by this build to rent programme, which was first announced back in September. TfL is aiming to have secured a partner by next March, at which time the programme will begin the process of developing at least 3,000 homes, of which at about 40% will be affordable, with a tentative aim of beginning construction in 2020/21, subject to planning approvals. The 10 locations span a number of boroughs, from Greenwich in the east to Hounslow in the west, with individual sites expected to deliver anywhere between 1,500 homes (at the Limmo Peninsula in Newham) to 100 (at Arnos Grove Tube Station on Enfield). It is understood that TfL and the partner will form a joint venture, in which the transport authority will retain a 49% stake, ceding 51% to the selected investor.
IN OTHER NEWS FROM CITY HALL
Believe it or not, our stories above cover only a fraction of what is happening at City Hall these days. The Mayor donned his ‘ambassador for London’ hat to call for Article 50 to be withdrawn to avoid a no-deal Brexit. Also, following a motion by Green Party AM Caroline Russell and similar initiatives elsewhere, Sadiq has declared a ‘climate emergency’. The Mayor further lent his backing to local initiatives, from a programme for disadvantaged pupils in Kensington, to London’s first-ever facility for young victims of sexual abuse in Camden.
Meanwhile, the Assembly is busy scrutinising Sadiq’s 2019/20 Budget this week, focusing on allocations for GLA staffing, fire and policing services, as well as the Old Oak Park and London Legacy Development Corporations. After approving his Economic Development Strategy two weeks ago, Assembly Members are now poised to vote on Sadiq’s draft Culture Strategy tomorrow.
- The Rail, Maritime and Transport Workers (RMT) union has confirmed that South Western Railway guards and drivers will be striking on 22 December, affecting services which operate out of London Waterloo.
- Meanwhile, Tower of London, Hampton Court Palace and Kensington Palace staff are set to strike on December 21 over changes to their pension schemes. The decision was made to strike after 90% of members of the Public and Commercial Services (PCS) union agreed to do so in a ballot.
TOTTENHAM HALE SECURES PLANNING PERMISSION
This Monday, LCA client Argent Related secured planning permission for a new district centre in Tottenham Hale from Haringey Council. The scheme will deliver over 1,000 new homes across five sites, including a much needed health centre, four new public spaces, new pedestrian and cycle links and up to 20 new retail spaces. The scheme’s residential component features 239 affordable homes including 131 council-owned, social rented homes on council land – meeting 13% of Haringey’s target of 1,000 new council owned homes on a single site. This complex project was three years in the making and LCA is delighted to have supported Argent Related’s very thorough consultation and engagement programme, as well as helping our client navigate a shifting political landscape and challenging planning process.
FUTURE OF LONDON OVERCOMING BARRIERS
This week LCA attended an event launching Overcoming London’s Barriers, a report by Future of London (FoL) in partnership with Arup, Countryside and Pollard Thomas Edwards. The study considers how community wellbeing as well as development projects can be adversely impacted by physical barriers like motorways, rail lines and waterways, but also by notional barriers such as the boundaries of boroughs, housing estates and opportunity areas. It usefully highlights a number of case studies, which showcase imaginative approaches to overcoming such barriers - from the Beam Park regeneration project which spans Barking and Dagenham and Havering to the various ways in which railway arches across London have been ‘reframed’ to make them more inviting as walking routes, or to enable their use as small business space and social infrastructure.
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