LDN Weekly – Issue 242 – 2 November 2022 - Capital of Contrasts
CAPITAL OF CONTRASTS
The spectre of a winter of discontent loomed large in the Mayor of London’s speech at the London Conference yesterday, in sharp contrast to a more positive, upbeat speech by the Minister for London Paul Scully.
| No images? Click here  CAPITAL OF CONTRASTSThe spectre of a winter of discontent loomed large in the Mayor of London’s speech at the London Conference yesterday, in sharp contrast to a more positive, upbeat speech by the Minister for London Paul Scully. It was perhaps a shame that they didn’t (as far as we could tell) stick around to listen to what each other had to say. A key test of how the relationship between London government and Whitehall moves forward will be the local government settlement for 2023/24 which we can expect shortly before Christmas recess. London Councils, as reported below, estimates a shortfall of some £700m across the 33 local authorities. Following years of reductions in funding, the figures indicate that even priority areas such as social care could see cuts. The Minister assured the London Conference's audience that he and DLUHC are in regular contact on this matter and presumably they will be poring over today’s Census data release, to better understand London’s communities and what they need (more on that in next week’s LDN). All of which takes place under the shadow of national and international developments. Will planning reform progress and if so how? Is the Government waffling on its net zero commitments? Will Labour’s ascendance in the polls encourage Sunak to play the populist card? And what on earth does hybrid working really mean for the future of commercial property? On a more positive note, we report below on quite the list of planning news and some positive transport initiatives including – hooray! – the full opening of the Elizabeth Line on Sunday 6 November. We hope you enjoy this edition and if you don't already, do follow us on Twitter and Instagram and feel free to visit our website for more information on LCA’s team, services, and clients. Oh and a technical note: If you like hearing from us, make sure to add ldn@londoncommunications.co.uk to your contacts or ‘safe sender’ list – this will help ensure our news bulletin lands in your inbox.  M&S MANIAThe proposed redevelopment of M&S’s Marble Arch store, on Oxford Street, is under the microscope at a public planning inquiry. The proposals, for the demolition of the existing building and its replacement with a 10-storey building hosting retail, office and leisure space, were approved by Westminster City Council in November 2021 and subsequently waved through by the Mayor in April (though Sadiq Khan did think twice about it). Levelling Up Secretary Michael Gove then issued a holding order before calling in the plans in June. M&S is facing off against a campaign spearheaded by SAVE Britain’s Heritage. Since the beginning of the public inquiry last week, M&S has made the case for the scheme’s design and environmental credentials, while warning that it will leave the flagship site if the plans are blocked. The retail giant has also secured the support of backers including Selfridges and IKEA. On the other hand, SAVE Britain’s Heritage, backed by a petition signed by 5,000 people and its own high-profile supporters, has claimed that the plans would emit almost 40,000 tonnes of embodied carbon, equivalent to driving a car 99m miles, calling for the existing building to be retrofitted instead. The two-week inquiry began on 25 October and the inspector’s report is expected to be published in January, after which the Secretary of State will be able to make a final decision on the plans. This, in turn, has the potential to set a landmark precedent for other major redevelopment schemes. LONDON PLANNING ROUNDUPBut M&S is not the only planning story in town…
GLA HOUSING LATESTThere’s much to report when it comes to housing in London, and it’s not a pretty picture overall. First off, there’s the latest, 70-odd page annual Housing in London Report. This thread by the GLA’s Jim Gleeson provides some especially insightful highlights from this meaty report, which forms the evidence base for the Mayor's housing policies. Meanwhile, the Mayor has warned that a ‘homelessness crisis’ is a real possibility this winter, unless central Government takes action. He cites reports on rough sleeping and the rental sector for the third quarter of 2022, which found an alarming increase (21%, year-on-year) in the number of people seen sleeping rough in the capital between April and September, while rents in London were up by an estimated 17.8%. Separately, the Mayor has, via Deputy Mayor for Housing Tom Copley, warned organisations in receipt of Affordable Housing Fund money that a failure to meet decent standards in their existing stock could lead to punitive measures, up to and including the withdrawal of ‘all funding.’ ...SPEAKING OF FUNDINGLondon’s boroughs have once again raised the alarm about acute funding shortfalls – and the impact on key services. Umbrella organisation London Councils has crunched the numbers, estimating that its members will need to make £700m of savings next year ‘unless the government boosts funding for local services.’ They warn that forcing councils to find ‘savings on this scale will inevitably mean reductions to London’s local services’ including possible ‘cutbacks to social care, bin collections, and homelessness services.’ The boroughs already face a gap of up to £400m in this year’s budgets, caused by soaring energy prices and other costs, plus rising demand for services. They are already having to operate with a level of overall resources 22% lower in real terms compared to 2010, despite the city’s population actually growing by almost 10% in that time. London Councils’ concerns echo those of local authorities across England – with warnings by the national Local Government Association covered in our last edition and the County Councils Network also sounding off on Friday. Their timing is no coincidence, as we await the 2022 Autumn Statement on 17 November, whilst we remain in the dark as to when exactly we can expect a Spending Review and Fair Funding Review. FUTURE TRANSPORTAfter writing about Transport for London’s financial woes for over two years now, this week has brought us unusually positive news for the capital’s transport system.
Last but by no means least, Sunday will see the launch of ‘through running’ on the Elizabeth Line which means, finally, that passengers can ride a single train from Reading and Heathrow through to Abbey Wood and from Shenfield through to Paddington. PEOPLE NEWS
 RESET TO FACTORY SETTINGSMichael Gove has returned to the Department for Levelling Up, Housing and Communities (DLUHC) to ‘finish the job’ he started. Since replacing Simon Clarke, Gove has signalled a roll-back of policies tabled in his four-month absence, announcing a ‘review’ of Liz Truss’ flagship investment zones proposals and reconfirming the Government's manifesto commitment to building 300,000 new homes a year. It remains to be seen whether Gove entirely reverts to Boris Johnson’s policy platform, but his return possibly heralds smoother progress for the Levelling Up & Regeneration Bill through Parliament. The industry has largely welcomed Gove’s return, with his reappointment seen as confirmation of a return to ‘policy stability’. Nonetheless, Gove has no room for complacency, as he faces a clearly restless market. Indicatively, Legal and General’s Chief Executive Sir Nigel Wilson recently revealed the company is increasingly favouring direct engagement with ‘stable’ regional Mayors to avoid the chaos of central Government. Separately, Gove's ambitious building safety agenda will likely mean more direct conflict with industry. Elsewhere at DLUHC, junior ministers Lee Rowley MP, Dehenna Davison MP and Baroness Scott of Bybrook have remained in place, while Paul Scully MP and Andrew Stephenson have been reshuffled to other departments. Lucy Frazer MP and Felicity Buchan MP have joined the Department. Their exact responsibilities are yet to be confirmed. NOPE27?Last week’s reports that new Prime Minister Rishi Sunak would not be attending this year’s COP conference in Egypt raised concerns about his commitment to tackling climate change. Following criticism from many, including the PM’s own COP26 President Alok Sharma, it was then reported that the Prime Minister’s decision is ‘under review’ and that he could still attend COP27 if enough progress is made on preparations for the fiscal statement scheduled for 17 November. Just this morning, the Prime Minister finally confirmed that he will be in attendance, saying ‘significant progress’ having been made on the Autumn Statement. While the Government dithers and delays, the built environment sector has been doing some interesting work on meeting net zero targets. JLL has published a report, Routes to Net Zero Carbon Buildings, which has outlined how retrofitting office and industrial buildings can help meet the UK’s net zero targets. Similarly, the Global Retrofit Index, carried out by 3Keel for insultation firm Kingspan, has found that UK’s slow progress on retrofitting its building stock is putting net zero targets at risk. Of course, Kingspan has been in the news for other reasons of late too, but that’s another story entirely. GOV'T-IN-WAITING?Rishi Sunak may have steadied his party’s erratic course, but peering through the mists, the Conservatives must see they are still heading towards an electoral iceberg. That’s not to say a Labour win is inevitable and it’s unlikely we’ll see a General Election sooner than 2024. Indeed, as of end-October, Rishi Sunak seems to have narrowed Labour’s polling lead from almost 30 points to about 25 (and as little as 16 in some surveys). Polls by Opinium and Redfield & Wilton Strategies also show Sunak edging ahead of Keir Starmer as the more trusted leader, especially on the economy. Yet, even a 15-20% Labour lead in vote share at the ballot box would scupper the Tories’ majority, while the Opinium and RWS polls both suggest that voters trust Labour over the Conservatives overall, with a separate Ipsos Mori poll finding 69% feel the country is ‘going in the wrong direction.’ So how does Labour stay on course to win the next election? It needs to firm up its manifesto and it’s moving in this direction, with Keir Starmer taking a stand on media matters this week. It needs to build bridges with business – cue ‘prawn cocktail offensive 2.0’. It needs to keep up the pressure on government ‘scandals’ – of which there is no shortage. It also needs to maintain party discipline, train up its political top team and recruit electable parliamentary candidates. The job is far from done, but clearly underway. WFH WORRIES LATESTThe road to recovery for London’s office market has been a challenging one and the latest figures suggest turbulent times are here to stay. Findings from Gerald Eve show that take-up of office space in the third quarter was down by 18% compared with the previous quarter, and more worryingly, 10% below the five-year quarterly average. The researchers said occupier ‘sluggishness’ is expected ‘to persist for the rest of the year’. Nonetheless, there are some positive signs for the sector. Cushman and Wakefield found demand for ‘new’ space in the third quarter reached its highest level since March 2014, suggesting that companies are looking to invest in more sustainable workspaces that accommodate hybrid working models. Growing demand for new office space is promising, but supply must keep pace. The latest data from Savills shows 43% of central London office developments due for delivery between now and 2026 have been delayed and 20% of projects due for completion by 2026 have been delayed by more than 12 months. If one thing is certain, it’s that hybrid working will continue to influence the capital’s office market. If you found this piece interesting, then Central London Forward’s upcoming "Out of office? How London is living with hybrid working" event on 21 November - chaired by LDN’s editor and LCA Partner Jenna Goldberg - is certainly not one to miss! 
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