“Driving south from Newcastle to Wiltshire yesterday I skirted Birmingham as I listened to the news that the City Council had issued a section 114 notice of the 1988 Local Government Finance Act (which basically means all new spending, with the exception of protecting vulnerable people and statutory services, must stop immediately).
For most of LCA’s near 25 years’ existence, section 114s have rarely been mentioned. In fact, up until recently, the only one issued in London was in Hackney way back in 2000.
However, in the last few years no less than seven Section 114s have been issued in authorities at, now, all levels of local government in England, with four in less than the last 12 months:
Northamptonshire County - February and then July 2018
Slough Borough – July 2021
Northumberland County – May 2022
Croydon Borough – November 2022
Thurrock (Unitary – district and council) – December 2022
Woking Borough – June 2023
Birmingham City – September 2023.
Each one had its own causes such as Birmingham’s long struggle with back dated equal pay, Woking, Slough and Croydon (intriguingly each one near or in London) all over stretching themselves in the property market and Thurrock investing in solar energy. There has also been criticism of over-ambitious politicians and - in some cases - officers.
What could though become reality sometime soon is the possibility – probability even – of a very well run, well managed, prudent local authority issuing a section 114. Basically, a local authority which the government cannot simply accuse of mismanagement.
Why? Well, after 13 years of austerity and continual cuts to services, there is little left to cut and the ability to increase council tax beyond its current cap is dependent on a local referendum. In the current cost of living crisis it would take a very brave local authority leader to attempt one. Furthermore, the funding formulae by which grant is made to local authorities has not been updated for a decade which London Councils notes hits London hard.
Meanwhile the costs of running services, especially in social care, continue to rise significantly and expectations of residents remain – rightly so – high. Throw in the impact now of RAAC (this isn’t all about school buildings), the ongoing effect of the Grenfell tragedy, greater numbers of homeless people on our streets and it is perfectly possible to see this happening. Also, the population is growing in most areas, with the number of older people rising fast in many places.
The chances of this occurring in inner London are perhaps lower, as many of these boroughs have funding from section 106 and CIL (albeit ring fenced it helps with cash flow) and car parking income. Outer London boroughs, who have seen outward shifts in population in recent years, may be more at risk, but probably the next one or two will be outside the capital.
In addition, many councils are late in publishing their annual accounts, some by several years. This is not a good sign. So it’s yet another thing to address on the growing list of the current government and will be a point for the new shadow Levelling Up Secretary to ponder too.”
Robert Gordon Clark, Senior Advisor and Partner
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Parts of our school system are, quite literally, collapsing. Students and teachers have been forced to relocate or learn from home, as the Department for Education (DfE) has published warnings for a number of schools to close over safety concerns. Today, the Government finally published its list of affected schools, showing that 156 have RAAC in their buildings (including 12 in London) and 104 have had to partially or fully shut. The schools in question were built between the mid-1950s and mid-1980s using reinforced autoclaved aerated concrete (RAAC), a lighter material primarily used in roof, wall and floor panels. Its low cost and high resistance to fire risk made it a cornerstone of public sector construction in the post-war period. As we’ve come to learn, this concrete has a shelf life of 40-50 years, resulting in the current crisis. The Guardian estimates that the cost of repairs to the schools estate could rise above £150m. Editor of Building magazine, Chloe McCulloch, said the crisis should prompt a ‘reboot’ of the ‘entire school rebuilding programme’, while former President of RIBA, Jack Pringle, called on the Government to create a ‘new PFI [Private Finance Initiative], a smarter PFI, to put private wealth to work.’
NUTRIENT NEUTRALITY NEUTRALISED
Last week the Government announced the heavily trailed scrapping of nutrient neutrality rules. In a press release, the Government said that the ‘defective EU laws’ would be removed, enabling the construction of over 100,000 new homes between now and 2030. The rules, which have been in place since 2019 following a European Court of Justice ruling, mean that 74 local authorities across England are only allowed to grant planning permission for new developments if the applicants are able to prove that their schemes would be ‘nutrient neutral’, meaning that they would not add to nutrient pollution in nearby water. This requirement will now be scrapped through amendments to the Levelling Up and Regeneration Bill (LURB) and the Government has also simultaneously announced the expansion of Natural England’s Nutrient Mitigation Scheme which will ‘offset the very small amount of additional nutrient discharge’ from new homes. The announcement has certainly divided opinion, with backlash from environmental organisations such as the RSPB making headlines, while housebuilders have welcomed the news and Labour have indicated that they will support the changes.
WEST END REVIVAL
The West End is back in action. Since the pandemic, the capital’s leisure and retail destination has been hit by reports of decline, major departures and a stagnant tourist economy. However, the latest news suggests that things are improving significantly, as shown by recent acquisitions by Great Portland Estates. The latest data about investment into the West End has shown availability for over £4.1bn in real estate across 87 individual schemes, with over £1bn already under offer. Meanwhile, as highlighted by Chief Executive of the New West End Company Dee Corsi, Oxford Street’s fortunes appear to be on the up, with existing leaseholders extending their footprints and new tenants arriving onto the street. And what’s a bustling city without visitors? According to their latest data on the London hotels market, Knight Frank has said that occupancy rates reached 82% in June 2023, growing on average daily rates by 23% on the same period in 2019 – a notable recovery since the pandemic. For visitors, residents and property professionals, it’s a ‘new dawn’ indeed.
LONDON PLANNING ROUNDUP
- Marks & Spencer has launched a legal challenge of Michael Gove’s decision to refuse planning permission for the redevelopment of its Oxford Street store. M&S has said that it has been ‘forced’ into taking legal action, saying that the Secretary of State had ‘wrongly interpreted and applied planning policy’ when making his decision.
- Storage company Big Yellow has won its planning appeal to deliver a new 132,000 sq ft storage site in Wapping. The proposals include the demolition of a temporary 31,000 sq ft store and the delivery of a part five and part eight-storey building, including 114 flats (44 affordable). The company’s plans were rejected by Tower Hamlets Council in 2022 despite officers recommending its approval.
- Barings Real Estate has received planning permission from the City of London Corporation to add two additional floors to its seven-storey office block at 25 Moorgate. Barings said the refurbishment and extension would deliver 79,500 sq ft of office-led space once completed.
- British Land has submitted revised plans for a 36 and 33-storey scheme in Canada Water containing 410 homes and 39,700 sq m of office and commercial space. The new plans include internal layout changes to accommodate a second staircase after its previous designs were halted by changes to building regulations.
- Regal London has submitted plans to Brent Council to deliver a 630-bed purpose-built student accommodation scheme at Wembley Greenway. The proposals include two buildings of 20 and 22 storeys with 10% allocated as accessible.
- Nuveen Real Estate has submitted plans to the City of London Corporation for a ‘radical repositioning’ of its nine-storey office block at 40 Holborn Viaduct, adding three extra floors and stripping the façade of concrete. The redeveloped block would also add two basement levels and increase floorspace from 20,579 sq m to 24,108 sq m.
- Investment fund Crosstree Real Estate has raised the largest property fund for UK investments so far this year, posting a £490m fund for equity and debt investments.
- Mayor of Hackney Philip Glanville has temporarily stepped down from his role following his suspension from the Labour Party. Cllr Anntoinette Bramble, Deputy Mayor of the Borough, is set to take on the leadership of the Council in the interim.
- Alistair Strathern, Waltham Forest’s Cabinet Member for 15 minute neighbourhoods and councillor for Higham Hill, has resigned to focus on contesting the Mid Bedfordshire parliamentary by-election for Labour.
- Former North Oxfordshire councillor Sam Holland has been selected as the Conservatives’ parliamentary candidate for Dagenham and Rainham and Ealing councillor Gregory Stafford has been selected to stand as the Tory’s candidate in Farnham and Bordon.
- The Government has announced three new appointments to the Planning Inspectorate Board. Adrian Penfold, Emir Feisal and Oliver Munn have joined as Non-Executive Members.
- Former head of development at British Land Nigel Webb has joined the Board of Barratt Developments as Non-Executive Director.
- Richard Bruce has started his new role as Chief Executive of Carter Jonas this week.
SHADOW CABINET RESHUFFLE
With the return of MPs to Westminster on Monday also came the long-awaited Shadow Cabinet reshuffle. Ahead of next year’s expected General Election, Sir Keir Starmer made key appointments to his top team, with some of the most senior positions remaining unchanged. Deputy Leader of the Party Angela Rayner was handed the title of Shadow Deputy Prime Minister as well as Shadow Levelling Up Secretary, taking over from Lisa Nandy who was given the International Development role. As for London MPs, Lewisham West and Penge MP (and sister of the Shadow Chancellor) Ellie Reeves was appointed as the Party’s Deputy National Campaign Coordinator, while Croydon’s Steve Reed was moved from Justice to Environment. The reshuffle has largely been dubbed as ‘Blairite’ by commentators, who have pointed to the return of Liz Kendall and Hilary Benn to the Shadow Cabinet, as well as promotions for Pat McFadden and Peter Kyle. While the new appointments will only now have a relatively short timeframe in which to prepare for Party Conference, as explained by the Institute for Government, this is thought to be the team that leads the Labour Party into the next General Election, with pre-election talks with the civil service expected to start by January, if not later this year.
LABOUR'S NEW TOWNS
Aside from assembling its team for the next election, Labour has been building new policy, too. The Times recently reported that Starmer, along with Shadow Housing and Planning Minister Matthew Pennycook, are drawing up plans for a new tranche of towns, the reintroduction of housing targets and to allow for building on the Green Belt. A Labour Party source said that they are ‘focused on reform’ as a way to spur growth. Anyone familiar with the history of New Towns will accept that this is not a fresh approach, but it has been praised as a housing policy. Even party commentators to the left of Starmer have backed the idea. Starmer’s intentions to back the ‘builders not blockers’ in rolling out New Towns signals an approach to planning reform which resembles the successes of past Labour governments, mixed with the urgent need for housing. And with Angela Rayner at the helm of the Levelling Up brief, there’s no doubt the Labour Party are building up to the big day.
- The Times’ (£) piece on the resilience and thriving of London’s art market.
- The Financial Times (£) on rent control policies in Berlin and their impact on the private rented sector.
- The BBC reporting on the lack of toilets, or ‘loo desert,’ on the London Underground.
- Evening Standard columnist Anne McElvoy on the Labour Shadow Cabinet reshuffle.
- Author Mim Skinner on the rise in commercial co-living schemes and their communal origins.
- The Church of England’s climate action and the installation of a ground source heat pump at St Paul’s Cathedral’s Chapter House.
FIVE MINUTES WITH...
The LCA team recently secured two interviews in New London Weekly for clients Avison Young and Lee Valley Regional Park Authority (LVRPA).
Head of Innovation and Insight at AY UK, Natasha Patel spoke with Editor, David Taylor in ‘Five minutes with’ and talked about the firm’s innovative tool AVANT, which is a proprietary research and intelligence platform to capture detail on the marketplace. The technology creates transparency around assets, locations, cities and places, so they can better advise clients, and offer solutions around any questions they may have. Patel discusses the positive impact the tool has had on the business, and how AI can make the agents' role more efficient, creating the value-add proposition in their advice.
Meanwhile CEO of LVRPA, Shaun Dawson, spoke with David about the recent opening of the £30m twin-pad Lee Valley Ice Centre and the work the organisation and Waltham Forest Council have started to do to attract as diverse a mix of skaters to the centre as possible, as well as the learning gleaned from designing and then managing three legacy venues from the 2012 Olympic and Paralympic Games.
Read the full interviews here: Five Minutes With… Natasha Patel and Five Minutes With… Shaun Dawson
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