As at about 6:30pm today, our top-level analysis of the Chancellor’s Budget statement could be characterised as “not as bad for London as it could have been”, or perhaps “ongoing benign neglect”.
On the one hand, Rishi Sunak only mentioned London twice (referring to “a London-style transport settlement…" for other regions and the City’s reputation for green finance) while mentioning levelling up at least seven times. On the other hand, the extensive suite of tax relief he announced for the wider cultural, hospitality and leisure sectors and additional support for R&D will help London perhaps more than other areas. Sunak even mentioned the British Museum!
Initial reactions from London commentators – more on these below – are rather as you would expect, which is to say pretty disappointed that the Government still seems to believe the capital can take care of itself, by itself, and can make do with the resources and powers already at its disposal. Like others, we will continue to drill down into the more detailed documents released alongside the Chancellor’s statement over the coming days and will provide a further update next week, as more information emerges. But we would remind our readers that London’s unemployment rate is nearly 6%, well above the national average of 4.5%.
Separately, in this week’s edition we compare and contrast the news from Bexley and Slough councils, provide further updates on planning, cladding, the Mound and statues as well as report on the still-emerging reaction to the widening of the ULEZ, among other stories.
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A BUDGET FOR... BEYOND THE M25?
With the Government busily spilling the beans since the weekend, this has arguably been the most drawn-out Budget and Spending Review statement in history. So what’s in it for London?
The capital seems set to benefit from an as-yet unclear share of nationwide spending boosts and tax reliefs, such as an average 3.8% annual increase in funding for central Government Departments, additional funding for councils, social care and the NHS, grants for the culture and heritage sectors – plus a hefty whack of tax relief for those two sectors plus retail and hospitality, all of which are critical to Central London’s economic health. Of course London will also, like everywhere else, have to shell out for what remains (as admitted by the Chancellor himself) a pretty heavy tax burden overall. As for specific mentions of the capital… as noted above, there were few mentions to London in the Chancellor’s speech and 3/4 of mentions in the main Budget and Spending Review document are to investments made (or civil servants moved) “outside” or “outside of” London, places being “behind” London, or places getting “London-style”... something or other.
Indeed, the London section of a regional breakdown document reveals that the capital received the second-lowest allocation from a first tranche of the Levelling Up Fund, at £65m in total for six projects from a total pot of £1.7bn (so that’s 3.8%) – which, as pointed out by Centre for London’s Nick Bowes, seems to correspond to the lowest per capita spend of all the regions. Pity then that the Levelling Up White Paper, initially expected to be published alongside the Budget, has been kicked into the long grass, as have other major decisions such as a final call on HS2’s eastern leg and a funding deal for Transport for London. No wonder that representatives of London, from the Mayor to business association London First, are rather disappointed, with London Councils’ somewhat muted statement reminding the Chancellor that London’s local authorities’ local tax revenues alone are still £400m down due to COVID...
A MOUND OF TROUBLE
The Marble Arch Mound attraction erected earlier this year to help bring visitors back to Oxford Street continues to be a source of trouble for Westminster City Council. A report by the Council's Chief Executive has found that there were ‘repeated warnings’ that the project was set to be over budget but that these were not communicated to Council leaders, who were instead given ‘overly optimistic financial updates’. The project, which is temporary and will close in January, was meant to cost £2m but actually cost three times as much. The report also said that the cost of the Mound was ‘devastating’ and ‘avoidable’. News has coincided with yet another senior resignation at the City Council – with Cllr Melvyn Caplan having resigned over the matter in August – this time of Oxford Street Programme Director Elad Eisenstein, called a ‘driving force’ behind the Mound, after only a year in the role.
LONDON PLANNING ROUNDUP
In the City of London, plans for the conversion of a former police station into a luxury hotel have been given the green light. Under proposals by modestly named Magnificent Hotel Investments Ltd, the grade II-listed building will be converted into a 216-room hotel, also including a restaurant, bar, gym, swimming pool, spa and meeting rooms.
CO-RE has been granted planning permission by the City Corporation to deliver a new 21-storey office building on Fleet Street. The proposals include the demolition of an existing office block on the site, alongside the refurbishment of the neighbouring Daily Express Building to provide 52,000 sq m of office space, as well as a gallery and rooftop bar.
Also in the City, Cannon Capital Developments’ plans for the conversion of Custom House into a new 200-room hotel recommended for refusal (on grounds relating to heritage, design issues and impact on protected views) – but a City Corporation Planning & Transportation Committee on the application will only reportedly be ‘indicative’ as the Planning Inspectorate will now determine the application, with an inquiry set to take place in January 2022.
Swan Housing Association has been given the go ahead for the third phase of its Blackwall Reach development. This will provide 340 homes to the scheme, which will deliver a total of 1,575 homes, half of which will be affordable. The development, which is being delivered in partnership with Tower Hamlets Council and the GLA, will also provide improvements to the public realm, warehouses, car parking, a new community hub, retail space and a new plaza for the DLR station.
Read on for a major planning decision in Ealing in the Our Week section below.
The past few days have offered multiple reminders that the cladding crisis is far from over – and that it affects far more than fire safety. Sky News’ Analysis of the Government’s latest Building Safety Programme data suggests that, at the current pace, it will be three and a half more years until all Grenfell-style cladding is remediated. London Fire Brigade data has meanwhile shown that Tower Hamlets is the London borough with the greatest number of unsafe tall buildings, with Hackney, Greenwich and Southwark also identified as boroughs acutely affected by the building safety crisis. Housebuilder Bellway has said that the repercussions of the cladding crisis could last for 20 years and a separate survey of housing associations by the National Housing Federation indicates that the cost of making existing buildings safe is substantially reducing the sector’s ability to deliver new affordable housing, with plans to deliver 12,900 new affordable homes over the next five years already scrapped. Meanwhile, homeowners are still being faced with huge bills for the remediation of cladding, with some key workers in London being asked to pay £85,000 and one homeowner even reportedly being asked to pay £103,000. Today's Budget has committed 'unprecedented grant funding of over £5bn to remove unsafe cladding from the highest-risk buildings, supported by revenues raised from the new Residential Property Developer Tax', but it remains unclear whether this represents entirely new funding.
Separately, Levelling Up Secretary Michael Gove – who has been tasked with sorting out the cladding issue – is reportedly ‘open’ to the idea of keeping Grenfell Tower standing as a memorial to those who died in the fire, despite previous reports that Government-appointed engineers recommended that it be demolished for safety reasons.
The big day has come and gone, with London’s Ultra Low Emission Zone (ULEZ) now pushed out to – though stopping just short of – the North and South circular roads. As per City Hall, it is now ‘the largest zone of its kind in Europe’, covering one quarter of London and more than a third of the city’s population. The expansion’s critics – including GLA Conservatives and even Ministers – argue that it is ill-timed, will counterproductively hinder economic recovery and will disproportionately impact small businesses and low-income Londoners. For their part, the Mayor and TfL will hope that an extensive public information campaign and a £61m scrappage programme will soften the blow. Initial reactions on the day were of course mixed, but it will take weeks, months even, before we know the real effects of the initiative. Air quality seems likely to benefit and London may well shrug off the cost and carry on, like it did with the congestion charge. Then again, considering the strength of reactions to low traffic neighbourhoods in some areas and rising living costs everywhere, might London see more resistance building to the ULEZ expansion? We shall see.
COP IN SIGHT
As thousands of delegates prepare to descend on Glasgow from Sunday, the build-up to the COP26 summit has taken a pessimistic turn. The conference has four goals: to get the attendees to commit to emissions reductions targets which will contribute to reaching net zero by 2050; adapt to the current impacts of climate change; have developed countries commit to raising funds ‘in climate finance to support developing countries’; and commit to working together to tackle climate change. But the Prime Minister has said this week that chances of success at the conference are ‘touch and go’. Separately, the summit’s corporate sponsors have also complained that the event is being ‘mismanaged’, pointing to issues with decision-making, communication and an alleged breakdown in relations between the conference’s organisers and the sponsors, which include Sky, the National Grid, NatWest and Sainsbury’s. One person is, however, expected to come out of the conference with an extra feather in his cap: Mayor of London Sadiq Khan will become the new Chair of the C40 group of cities, replacing the Mayor of Los Angeles. Meanwhile Glasgow appears to be struggling, both with providing enough accommodation for attendees and facing the threat of a rail strike.
The wider built environment sector has in the meantime continued to churn out proposals, commitments and... dire warnings. The National Trust has brought together the biggest landowners in England for a one-day summit ahead of COP26, to ‘explore what more landowners and land managers can do at ‘ground level’ to work alongside nature to mitigate the impact of the changing climate’. The UK Green Building Council (UKGBC) has published guidance for local authorities on how to increase the sustainability of non-domestic buildings. And the Construction Leadership Council has warned that it is unlikely that the Government’s targets to decarbonise construction will be met due to shortages of labour and funding.
LOCAL GOVERNMENT FINANCE
If the big figures touted by the Chancellor today seem a tad too abstract, here’s some local government realness for you. The Government has now announced its intention to place Slough Council – just beyond the Greater London boundary – under Government supervision after two reports found there to be a number of financial and governance issues at the local authority. The Council had issued a Section 114 notice in July and the reports, according to a Written Ministerial Statement by Minister for Levelling Up Communities Kemi Badenoch, ‘paint a deeply concerning picture of mismanagement, of a breakdown in scrutiny and accountability, and of a dysfunctional culture’ at the Council, which is now requiring over £100m in additional financial support for 2021/22, far higher than the £15.2m originally estimated. In more positive news, the London Borough of Bexley has announced that it has withdrawn its own request for emergency financial support (or capitalisation direction) to Government. The borough had agreed to make the request in November 2020, after it emerged that it was facing an overspend of almost £14m by 2024-25. The request was granted in February 2021, permitting the Council to borrow money from the Government, but now Bexley has said that it has withdrawn its request due to its ‘sound financial planning’, with Council Leader Teresa O’Neill saying that the borough will continue to make the case for ‘fair funding’ for local authorities to Government.
The national Local Government Association (LGA) has cautiously welcomed parts of today’s Spending Review but argued that it will only “help meet some – but not all - of the extra cost and demand pressures they face just to provide services at today’s levels.”
CULTURE WARS LATEST
With all eyes on the Chancellor and COP26, you may have missed the latest skirmishes in the ‘culture war’ over London’s built environment. The Mayor has charged ahead with efforts ‘to ensure our public realm presents a more complete picture of everyone who has made London the incredible city it is today’, by unveiling a £1m grant programme, a new partnership with Bridging Histories to create an educational ‘interactive platform’ and the results of an ‘audit of public sculpture and monuments across the capital’ – all as part of the work of his Commission for Diversity in the Public Realm. The announcement has triggered a range of reactions, from The Guardian’s focus on the audit’s finding that ‘London has more statues of animals than of named women’, to the Daily Express’ angle, emphasising fears that the Mayor’s grant money will enable changes to historic street names. Even as the Mayor has sallied forth, it seems that the City of London Corporation has… called a truce. Earlier this month, its Court of Common Council opted to ‘retain and contextualise’ statues with links to slavery rather than remove them, as it had originally planned (attracting, at the time, the ire of a certain - now-sacked - minister).
PITY LONDON PRIDE
It continues to be a very turbulent year for London’s annual Pride parade, with campaigners now calling on the Mayor to intervene. We have reported previously on complaints by staff that led to high profile resignations and to the ongoing uncertainty about the pandemic, which have led to the annual march being postponed, again. Now, leading LGBTQ+ rights campaigners have ‘called on Sadiq Khan to reform Pride in London’ ahead of its 50th anniversary next year. But what power, you may wonder (as did we), does the Mayor have over the event? As reported by the Evening Standard, the annual event is overseen by an independent board of voluntary directors, but is at least part-funded by the Mayor of London ‘and has a contract with his office’ meaning that he does have levers he could use. Fourteen leading campaigners, including Peter Tatchell, have signed an open letter to Sadiq Khan with ‘nine demands’ including an independent investigation into racism and bullying accusations that have led to staff and volunteers resigning. The letter also notably complains that ‘corporate and commercial interests’ have gained ‘undue influence’ over the event, ‘exploiting’ it as an ‘advertising and branding opportunity’. So, will Khan intervene? A spokesperson cited by the Standard was ambivalent.
OUTER LONDON BOOST
The debate about inner v outer London when it comes to offices has seen some interesting recent decisions which we have covered in LDN, such as Unilever’s plans to build a campus in Kingston and GSK’s announcement earlier this month to leave their 20 year home at Brentford with some staff moving to Weybridge and the rest, well their new home is yet to be confirmed. Last week Ealing town centre saw a significant boost to their office market when Barr Gazetas’ proposals for British Land to refurbish and extend International House received unanimous approval from the Council’s planning committee. The c £100m investment will see the current c 100,000 sq ft of floor space upgraded to 21st century standards, with an additional c 65,000 sq ft delivering in total c 165,000 sq ft, enough to provide for c 1,500 jobs. A pavilion roof will be added to the current four floors of offices, the internal courtyard gardens will be upgraded, cycle parking and changing facilities will be delivered and most significantly the investment will see this 1980’s building reduce its CO2 emissions by some 75%. Whilst a significant boost for the town centre, the Council believes that it needs more offices to support the retail and cultural offer, especially when the Elizabeth Line finally opens.
LCA and our clients have been fighting the good green fight in the leadup to COP26, which represents a key opportunity for industry as well as for governments worldwide to take a stand – and make a difference. We were particularly pleased to help architects Stride Treglown in securing media exposure for The Sinking House, a striking installation in Bath’s Pulteney Weir, including an interview with BBC Points West and other local media coverage. The installation is inspired by Greta Thunberg’s proclamation that our ‘house is on fire’ and the terrible scenes from the floods in Europe – but also conveys a message of hope. Separately, LCA is also pleased to have chipped in to back Ashden's Lets Go Zero (LGZ) campaign, donating to a charity cycle ride that sees a motley crew of planners, housebuilders, architects and others currently pedaling over 700 km to Glasgow. LGZ is a national campaign uniting teachers, pupils, parents and their schools as they all work together to be zero carbon by 2030. You can also contribute here.
AS I WAS SAYING...
LCA’s Paddy Hennessy made his first appearance for eight years as a pundit on Nick Ferrari’s Breakfast Show on LBC on Friday. After welcoming him back, Nick quizzed Paddy on why the government was going to war with GPs over the massive decline in face-to-face appointments in surgeries. Paddy said a clash between ministers and doctors was nothing new – being a feature of many administrations going back (at least) as far as the post-World War II Labour government. This sort of fight doesn’t tend to end well for ministers. Oh and in case you missed it, here is Paddy’s overall take on politics this autumn, recently published by PR Week.
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