The government’s Autumn Statement, reflected a ‘soft Anti-London policy’ with reforms that help the rest of the country but don’t help the capital according to LSE’s Tony Travers. “There was plenty that was not helpful to London” he said.
A case in point was the further business rate reform, which will not help inner and central London larger businesses at all – Westminster’s rateable value is more than twice the size of Wales. The noise about helping retailers compete with online was an issue effectively ‘parked’ by government, while London will not get any of the extra money made available for roads and potholes. There was no mention of pushing forward Crossrail 2 or the Bakerloo Line Extension, and all the ‘mood music’ at the moment was that London will lose more resources as part of the on-going Fair Funding Review, said Travers. One scenario might be that government reduces resources for London and then allow council taxes at inner London boroughs to be raised. The dependency on development and associated Section 106 and CIL will be even greater than before, Travers predicted.
There is a ‘bit of a watershed’ at the moment in terms of retail, said Deirdra Armsby, director of place shaping at City of Westminster, with some of the trends challenging the physical and economic function of high streets. And it was fair to say that some of the statement’s measures including business rate reform were ‘somewhat modest’ in assisting with the issues, she said; high streets need to reinvent themselves, underpinned by flexibility on use classes and the notion that people still have a human desire to have meeting places they can be proud of.
Indeed, said Cushman & Wakefield chair Digby Flower, the UK has the second highest level of internet sales adoption behind Norway with 17.4% of all retail sales done online. That is expected to reach 25-30% in five years; much higher than the rest of Europe. That means we have a 25% oversupply of retail, 30% in five years. The measures in the autumn budget were a recognition that things have moved on but nothing in the business rates or digital sales tax that will make any difference, Flower believed.
Housing as an issue, though, had fallen down the agenda below potholes and public toilets, said Fiona Fletcher Smith, director, development and sales at L&Q. Although the lifting of the borrowing cap was great news for local authorities, the extension of Help to Buy was useful but only for two years, so the ‘sword is still hanging’. The big miss, she added, was anything on the outcome of the Letwin review and on the acceleration of delivery, although the official line is that government will need three months to consider such radical views. The devil will be in the detail, said Pat Hayes Managing Director, Be First, and while the lifting of the cap will be not unhelpful and will aid regeneration schemes, any mention of CPOs are ideologically so far away and too hot an issue for conservatives outside London said Hayes.
The idea of local development corporations was also mentioned in the autumn statement, but one that William McKee, Chair, Old Oak & Park Royal Development Corporation said he found hard to get excited about. Putting such vehicles into local contexts will only run into ‘passions’. The most successful ones were where there was public financial backing, with the New Towns having had the legal right to buy agricultural land, London Docklands gifted land in a tax efficient environment, and the Olympic Delivery Authority providing the cash to hit an immoveable deadline. The less successful versions, said McKee, were those where the government started to ‘turn the tap off’, such as with the Thames Gateway.
Brighter news from the GLA perspective said Darren Richards, manager of OAPFs and Growth Strategies at GLA came in the form of the Housing Infrastructure Fund (HIF) money to improve the DLR, which could unlock some 18,000 new homes. But it was ‘pretty bare’ other than that, including the point that on the road fund, London was paying into something that wasn’t even going to the capital’s roads. Peter Eversden, Chair, London Forum of Civic and Amenity Societies, meanwhile, pointed to the slackening off of routes for funding for local authorities, including over parking fees, making their resources potentially dwindle further.
Some parts of the city, suggested Central director Pat Brown, are welcoming growth, but the way they are doing so impinges on the sense of place where the regeneration schemes are planned – the Old Kent Road being one of them. So the challenge is how to take an existing place with you, said Blakeway, and London has a ‘fantastic opportunity to renew our ambition’ even after Brexit, rather than be in ‘reactive mode’.
The central London model will not necessarily apply to the outer boroughs, however, suggested Stewart Murray, Strategic Director of Economic Growth, LB Waltham Forest. It was using its tag as London borough of culture to reinforce an investment strategy. But we mustn’t forget the reason people choose to live in suburbs, said John Lewis, Executive Director Thamesmead, Peabody. Part of the answer lay in sharing discussions, bringing people along, putting down a clear masterplan, and then ‘you’re up and running.’ There’s a really positive opportunity – you don’t always have to put a cap out all the time and say we need public money’.
There is, however, a strong sentiment in London at the moment, said Kate Davies, CEO of Notting Hill Genesis. The issue around Brexit was a kind of ‘big Nimbyism’ and about not wanting growth, outsiders, or their country to change, and that was showing up as a decline in sales. The whole success of London had been about attracting people in and making it buzz, but that had turned, and many people now simply feel that London is just too difficult to grow in, Davis suggested.
Perhaps a new narrative was required, said Pat Hayes, about the state being much more involved, pointing to Milton Keynes as a good example of where this kind of attitude had worked. London will not suffer as much as other regions, Hayes added, but in Barking, the key problem was viability, and the underlying challenge of valuations clearly squeezed by the banks. High streets, meanwhile, had suffered also because of their ‘bland and corporate’ nature. People in France don’t shop online because they have a more interesting retail offer, he proposed.
There are two pertinent indices to watch at the moment in London, however, which offer a more positive and optimistic picture, proffered Marc Vlessing, CEO of Pocket Living. The first was the Pocket Index – which was at a buoyant level given the speed at which the firm is gaining planning consents and selling homes; the developer is also buying its largest amount of land ever in one local authority – Waltham Forest – too. ‘That index is strong, vibrant and healthy’, he said. The other is the Pidgley Index, he said, which is the rate at which Berkeley’s Tony Pidgley is booking hotel rooms in Hong Kong to sell homes in the UK. He has booked out ‘most of the hotel rooms next April in HK because he is expecting a ‘Brexit bounce’, and even if there is not, there is a lot of pent-up demand – Digby Flower confirming that around 15-30 were being sold every trip, with two or three trips every four weeks. ‘We’re burning our team out’, he said.
Less buoyant is the state of TfL’s finances, said Co-Chairman, Urban Design London Daniel Moylan, which is now the biggest burden and risk the mayor has. On top of the fares freeze, the bottom line at TfL is also being adversely affected by the Hopper Fare’s ‘dangerous’ popularity and the fact that it now has to reset the money it expected to come from vehicle excise duty to zero. But Crossrail ‘is absolutely devastating TfL’s finances’, he said, with delays to the line compounding losses and the announcement of a £350m loan from the DfT clearly showing ‘that Crossrail Ltd has run out of cash’.
The last topic dealt with by the Sounding Board was to do with the recently announced Building Better, Building Beautiful Commission, to be chaired by Sir Roger Scruton. Despite the ripples this appointment has caused, he will be staying, said Andy von Bradsky, as ‘an authority on aesthetics’ and there will be more news soon on who the commissioners might be, who will be appointed by the secretary of state; there is a ‘willingness’ to have a balance to challenge assumptions over traditional buildings, he said. The title of the commission, incidentally, was a concoction and combination of two different titles, Building Beautiful being the side the secretary of state favoured. But it was a bit of a ‘slip up’ not to have recognised agencies such as RIBA as one of its advisors, and something that has caused RIBA president Ben Derbyshire a degree of anger, Derbyshire admitted, ‘What worries me is this use of the word style from the lips of the chairman’, he said, ‘I hope it’s not a triumph of style over substance.’ Derbyshire said this ‘slip up, cock up or lacuna’ from the same department that is ‘addressing the question how we create better more beautiful sustainable environments to deliver the wellbeing of citizens of this nation’, was ‘appalling’.
NLA chairman Peter Murray said the NLA will respond in time, but that ‘it feels like a repeat of what happened in 1984 and will be equally unproductive’. Murray said he hoped Create Streets Nicholas Boys-Smith had the ear of government and’, said Murray, now has talked to a lot of people and has a much better understanding of the issues involved and understands the complexities of delivering housing. ‘But the chair really dismays me’, said Murray. ‘He’s not advanced his ideas one iota in the last 50 years.’
London needs to stay positive and ambitious in its drive towards growth to stave off perceptions it has ‘growth fatigue’ – and consequently continue to reap financial support and favourable policies from central Government. Richard Blakeway, Chair, BexleyCo Ltd, suggested that London needs to demonstrate that ‘we are still hungry for growth, rather than show growth fatigue’. It was important to respond to the challenges growth throws up, but also, he suggested, to show the ambition that the city wants to do more, especially when other UK cities are getting their act together in the race for funds. Fletcher-Smith agreed. ‘We have to keep being ambitious’, she said. ‘We really have to push this.’
By David Taylor, Editor, NLQ