Inflation increase means less room for the Bank to cut rates; due to the soaring costs of oil and food the Consumer Price Index (CPI) has risen by 0.5 per cent over June to 3.8 per cent. Analysts had been expecting a rise to 3.6 per cent. The Retail Price Index (RPI) rose from 4.4 per cent to 4.8 per cent. The figures come on top of other disturbing news including the cost of products leaving UK factories has risen by 10 per cent in the first half of the year. Michael Saunders, economist at Citibank, said: “The widespread and powerful inflation pressures evident in the producer price data are likely to be reflected in a large and extended overshoot of the CPI inflation target in the next two to three years”. The Royal Institute for Chartered Surveyors (RICS) says in its latest house price survey that transactions in the housing market in June were the lowest since it started the surveys 30 years ago However, the survey has shown that the fall in house prices over June were at a slower rate than in the previous two months. James Knightley, an economist at ING, said: “The Bank of England can’t cut rates until it is convinced that inflation is moving downwards”. Further information- Statistics and Royal Institute for Chartered Surveyors BBC News Online 15.07.08, Evening Standard 15.07.08
Guardian says interest rate cut is more likely than a rate rise; Ashley Seager, the Guardian’s economics correspondent, has claimed that recession is already here and that the downturn in the economy is gathering pace so rapidly that a rate cut next month, while unlikely, is far more likely than the rate rise some in the City still expect. He claims that when the economic history books are written, they will almost certainly say that the late-2000s recession began in the spring of 2008. The house building industry has faced difficulties; house prices are falling at the fastest pace ever recorded; the government is not writing much new construction business, so growth will slow there; and unemployment, usually a lagging indicator, has been increasing for the past three months. Economic growth has furthermore halved in the first quarter of the year and, given the meltdown of the past three months, the first estimate of second-quarter growth, out later this month, is likely to show a much lower number, possibly even a negative one. Guardian 14.07.08
NIESR predict £7.5bn black hole in public finances; the Independent has quoted research by the National Institute of Economic and Social Research (NIESR) that the Chancellor is facing a £7.5bn black hole in his Budget for next year as a result of the economic downturn. This would result in his increasing taxes, cut spending or borrow more. Borrowing such sums risks stoking inflation and a further rise in interest rates. The NIESR is basing its prediction on the slowdown cutting at least £8bn from tax revenues while the housing slump will halve the stamp duty receipts to £3bn. The only respite is the £4.5bn windfall in receipts in duties as a result of the soaring price of oil. Independent 08.07.08
Chancellor sets up new City groups; Alistair Darling has announced the creation of five new working groups aimed at ensuring that London maintains its place as one of the world’s leading financial centres. Together with Sir Win Bischoff, Citigroup’s chairman, he will chair the financial services global competitiveness group, which will report to the High Level Group of City Competitiveness set up in 2006. The group will also include Dame Clara Furze, chief executive of the London Stock Exchange; Lord Levene, chairman of Lloyd’s; Richard Lambert of the CBI; and Stuart Fraser, chairman of the City’s policy and resources committee. The 17 other members will include chief executives of leading banks, insurance organisations and professional services firms. Two of the other groups will be the Professional Services Industry Group to be chaired by Sir Michael Snyder and the economic secretary Kitty Ussher, and a working party on the efficiency of the UK’s capital raising process, to be chaired by Hector Sants, the chief executive of the Financial Services Authority. Click here for further information Financial Times 14.07.08, Independent 14.07.08
John Major says Britain may already be in recession; John Major, the former Conservative Prime Minister, who inherited interest rates of 14 per cent and 9.5 per cent inflation, has admitted that whilst he feels “human sympathy” for Gordon Brown, he believes that Britain may already be in recession, with inflation “between eight and 10 per cent”- more than twice the official figure. He did not accept that the current problems were all due to imported global forces and pointed to the fact that Labour had not put aside money during the good years. He went on: “They certainly can’t cut taxes because they have such a big fiscal deficit. They can’t increase public spending because they have already spent the money we would normally use. It’s quite extraordinary that over 10 years, in which the world has had the most benign economic circumstances for a very long time, we have run up such a huge fiscal deficit”. The Guardian says that his most damning contribution was his support for claims that neither of the two measures of inflation, the consumer price index (CPI) and the retail price index (RPI) now reflect real inflation as it affects ordinary people on average incomes, because the CPI excludes key items such as housing. Major claimed “I would say inflation is probably double the RPI figure, so we’re between eight and 10 per cent”. Guardian 14.07.08
Middle class turns to moonlighting; according to an analysis by Capital Economics 1.15m people now have second jobs, an increase of five per cent since the onset of the credit crunch and the highest number for five years. Whilst many of the extra 56,000 people taking on work are exploiting their job skills to earn extra cash, others are turning to hobbies and talents to boost their incomes. “We saw a sharp rise in the number of people with second jobs in previous recessions and that’s starting to happen again”, said Vicky Redwood, the UK economist for Capital Economics. “The true number is probably much higher, as many second jobs are simply never declared and never appear in the official figures”. Employees are making use of websites such as People-per-hour and Setyourrate.com that allow users to advertise freelance services anonymously. Police forces are reporting an increase in officers registering second jobs whilst Avon, the cosmetics company, says it has attracted 17,000 new recruits in the past year. Click here for further information Sunday Times 13.07.08
Outsourcing to private sector now worth £80bn; a government-sponsored study by DeAnne Julius reveals that outsourcing of public services to the private and voluntary sectors has almost doubled to close to £80bn in the last decade and makes up a far larger part of the economy than previously thought. This covers a third of public services- everything from National Health Service treatments to bin emptying, IT, back-office functions and RAF pilot training. The market is worth £79bn, employs almost as many people as the NHS and accounts for six per cent of gross domestic product, making it a larger industrial sector than pharmaceuticals, automotive or electricity, gas and water. It also has considerable potential for further growth both at home and abroad. Click here for further information Financial Times 10.07.08
Councils put Neets at the top of their target list; the Times reports that under the revamped target regime being set between the Department for Communities and Local Government the top of the list is reducing the number of Neets- 16 to 18-year-olds not in education, employment or training. Out of the 150 councils, 115 chose Neets as their main priority. The latest data on Neets issued by the Department for Children, Schools and Families can be interpreted in different ways. The Daily Telegraph says that more teenagers are dropping out of school or college without a job than when Labour came to power, whilst the Guardian hails the fact that the percentage of Neets is now going down. As it happens both are correct. The proportion of Neets fell from 10.4 per cent in 2006 to 9.4 per cent in 2007. This represents an estimated 189,000 teenagers out of work, college or training compared to around 206,000 a year earlier. However, in 1997 the figure was even lower, with 8.9 per cent of 16-18-year-olds in the Neets category. The New Statesman looks at some of the schools where they are successfully tackling the issue. It points to more support for families at risk of social exclusion, equipping children with greater social and emotional support; and breaking schools down into smaller units of no more than 500 pupils. Times 08.07.08, New Statesman 14.07.08
‘Adults are poor role models’; according to a leading charity children are not acquiring basic moral values because today’s generations of adults are such poor role models. Research by the Children’s Society suggests that two-thirds of adults believe that the moral values of young people have declined considerably since the time when they were young. The charity, which questioned 1,176 people, said that consumerism, the rise of the celebrity culture and weakening family values were undermining traditional moral values among young people. But is also blamed adults for failing to engage with children and being too eager to criticise their behaviour rather than intervening and helping them navigate the challenges of modern life. Click here for further information Times 30.06.08
Plans for community enterprise fund announced; plans for the long-awaited fund to support community enterprise have finally been outlined in the empowerment white paper issued by Communities secretary Hazel Blears. It contains details of a £70m Community Builders Fund, including £59m from the Department for Communities and Local Government (DCLG) and £11m from the Office for the Third Sector. Following rumours of a Whitehall dispute as to how the fund should be run, the white paper says that the DCLG will be inviting expressions of interest from national funding bodies as soon as possible. Click here for further information Regeneration 11.07.08
Private sector executive forced to quit Ofsted; a senior executive from GlaxoSmithKline (GSK) has been forced by the schools inspectorate to resign as a top adviser only one month after being appointed in a move likely to damage efforts to bring private expertise to the public sector. Paul Blackburn, senior vice-president and financial controller at GSK was asked to leave his part-time post as a member of Ofsted’s board of non-executives despite being highly praised on his appointment by Ed Balls, the secretary of state for children, schools and families. The decision follows criticism from campaigners highlighted in the Mail on Sunday stressing GSK’s commercial interests and potential conflicts in medicine testing and use in children. Some of the claims were disputed by GSK. The Financial Times says that the decision to ask Mr Blackburn, who was selected for his financial expertise and had no direct link to any of the claims made publicly about GSK, to resign asks questions about how far other senior private sector figures can work with government. The FT has a leader condemning the treatment of Blackburn pointing out that it was triggered by a single article’s criticisms of GSK and that none of them linked to him personally. Daily Telegraph 14.07.08
Leading Conservative calls for RDAs to be reformed; a division has emerged amongst leading Conservatives about what do about the English regional development agencies (RDAs). The long-held view of total opposition was expressed by Eric Pickles, the shadow Communities secretary, when he gave notice that the agencies would be scrapped from “day one” of a Tory government. Now, Alan Duncan, the shadow business secretary, whilst saying that the RDAs were “wasteful, politicised and increasingly distant from business” has called for them to be reformed rather than abolished. Duncan said that under a Tory government the RDAs would “be a very different beast”. He would take away the regional planning powers and close the overseas bureaux. Business support powers would also be stripped away and pulled into a single, one-stop website as outlined in the recent report on business support compiled by Doug Richard. The British Chambers of Commerce said they would welcome reform to make the RDAs more engaged with business, with their sole function economic development. The North East Chamber of Commerce has endorsed the performance of One North-East whilst other business organisations have been unsure on the Tories plans. The Federation of Small Businesses wants the RDAs to continue to support small firms and the EEF has expressed reservations about scrapping the agencies. Click here for further information Regeneration 11.07.08
Regional housing plans will fail to meet demand; Professor Stephen Nickell, chairman of the National Housing and Planning Advice Unit, has warned that the supply of new homes envisaged in the emerging regional housing plans will fail to reduce the demand for social housing. He argues that despite the current downturn, house prices will continue to rise in the longer term, forcing many people to turn to social housing. He warns that the proposed levels of house building would be insufficient to avoid future price rises, leaving many potential buyers locked out of owner occupation. Click here for further information Regeneration 04.07.08
Seven areas eye city-region deals; Regeneration & Renewal claims that seven of the 13 city-regions working on cross boundary funding deals have told them that they are due to get approval from the government when the first wave of deals are signed off by Hazel Blears on 14th July. The multi-area agreements enable groups of councils in a metropolitan area to pool funding streams into one pot to spend on city-regional priorities. The deals for Middlesbrough metropolitan area and Greater Manchester, which have been the front-runners in the negotiations are to be approved. Regeneration & Renewal say that they understand they will be joined by the metropolitan areas round Newcastle, Leeds, Southampton-Portsmouth, Sheffield and Bournemouth. Those areas that have missed out on the deadline, including Liverpool city-region and Greater Bristol, will have to wait until the autumn. Regeneration 11.07.08
House of Commons should create regional select committees; a report produced by the House of Commons’ Modernisation Committee calls for the creation of regional select committees for all regions outside London. The MPs say the new bodies could also monitor other regional bodies such as the learning and skills councils. Click here for further information Regeneration 11.07.08
Small businesses grow gloomy as credit squeeze tightens; July’s Bowmark Entrepreneurs Index says that directors of small and medium companies have become much more negative about their prospects in the past six months, and they largely blame the government. The survey covers directors of 163 companies with fewer than 500 staff and annual sales of between £10m to £100m. It says that the rapidly darkening mood of the small business leaders is due the grim economic climate of rising inflation, slowing consumer spending and tightening debt markets, as well as anger at recent tax rises. The “optimism index” measuring how confident small business leaders were at the prospects for their company over the next 12 months was 66.7 per cent, a drop from 76.3 per cent at the start of the year. Bowmark’s findings come hot on the heels of the latest survey from the British Chambers of Commerce, which suggested that Britain was on the brink of a recession. Moreover, Luke Johnson writing in the FT claims that UK bankers are using “bullying tactics” by hammering small companies with tighter lending requirements as the credit squeeze begins to bit. He was supported by Peter Jones from Dragon’s Den and Sinclair Beecham, co-founder of Prêt A Manger, who said that the bank’s behaviour was “all too predictable”. Further information- Bowmark and British Chambers Financial Times 04.07.08, 14.07.08
Social enterprises are ‘twice as likely to fail’; according to a report by the Global Entrepreneurship Monitor social enterprise companies are twice as likely to fail as conventional not-for-profit companies. The report, Social Enterprise in the UK, says that two million people of working age (5.8 per cent) are engaged in early stage entrepreneurial activity. Of these, 235,000 are trying to start a social venture. Men in the 18-24 age group are more likely to start a social enterprise than women (5.6 per cent compared to 3.1 per cent), and the proportion of people from black and ethnic minority communities engaged in social enterprise is higher than for white people (8.9 per cent compared to 3.8 per cent). Recreation, education and support and care services dominate the social enterprise start-ups sector. The report says that there is a gap in understanding the changing nature of social entrepreneurship, and of how social enterprises grow and are financed. Click here for further information Guardian 09.07.08
Universities reach record number of licences; the number of licences granted by universities and colleges to exploit the value of their inventions rose by more than 20 per cent to 3,286 in 2006-07- a record high. At £288m the value of consultancy work by the higher education sector also reached a record. Adrian Day said: “The idea of the ivory tower does not apply anymore”. University academics “want to be more engaged. They want to create wealth”. Click here for further information Financial Times 10.07.08
‘Small businesses on verge of tax rebellion’; the Professional Contractors Group (PCG), which has 16,500 members and was set up to lobby against tax changes affecting freelancers, has warned that small businesses are so angry about the tax system that their willingness to comply with their legal obligations is in jeopardy. Calling for an overhaul of the tax system the PCG says that it suffers “strange and inconsistent outcomes”. It also attacked the retrospective impact of recent changes or proposals, such as the simplification of capital gains tax and rules designed to stop “income shifting” in family-run businesses. It says: “In order to disguise high levels of taxation, the government has complicated the system substantially, and also become more aggressive in attempting to extract the maximum revenue from existing rules”. Click here for further information Financial Times 11.07.08
Self-employed can set mortgage costs against tax; HM Customs and Excise have started to allow self-employed workers to offset their mortgage interest and council tax against their annual income tax bill; an expense that accountants have traditionally believed to be off-limits. New guidance has been issued that clarifies the validity of writing off mortgage payments, council tax and even home insurance against income tax for the first time. Angela Beech, a partner at the accountancy firm Blick Rothenburg, said that her company had been given the impression in the past that offsetting mortgage payments against income tax could have a detrimental effect by making the residence mainly for business purposes and thus making it liable for Capital Gains Tax. Click here for further information Independent 30.06.08
Jobless youth rate higher than when Labour came to power; the proportion of 16-to-24-year-olds without a job is higher than when Labour came to power, despite government efforts to reduce unemployment among the young, says a report from the Organisation of Economic Co-operation and Development (OECD). Glenda Quintini, OECD economist and author of the report, blamed the rise on the failure to raise the skills of many youngsters. The New Deal scheme to reduce youth unemployment by providing training, subsidised employment and voluntary work had also failed to maintain its initial success. One in five youngsters who found work under New Deal held a job for less than 13 weeks, leading to “short employment spells with benefit dependency”. The youth unemployment rate, after falling when Labour came to power, had climbed to 14.4 per cent last year- a percentage point higher than in 1997. The employment rate for youngsters had also fallen from 60.9 per cent in 2002 to 55.9 per cent last year. However long-term youth joblessness has fallen from 23.3 per cent in 1997 to 16 per cent. Efforts to reduce the proportion of youngsters not in education, employment or training (Neets) had been disappointing with the proportion of Neets amongst 16-to-24-year-olds rising from 11.6 per cent to 13 per cent during the first decade that Labour were in power. The OECD report calls for “fine tuning” in the policy that youngsters should stay in training to the age of 18, it also calls for increased support for free nursery education, a three-month limit for 16-17-year-olds with part-time learning, after which they must return to full-time education or training, more involvement for trade unions in the development of apprenticeship schemes, and an expectation that youngsters working under New Deal stay in a job for at least 26 weeks. Click here for further information Financial Times 10.07.08
Building industry could axe 60,000; senior industry figures are warning that the crisis afflicting Britain’s house builders is set to add tens of thousands to the unemployment count over the next few months. The Bank of England’s Monetary Policy Committee is boxed in by the opposing threats of persistently high inflation and a slowing economy. It wants the economy to slow sharply to ensure consumer price inflation falls next year after peaking, probably well over four per cent, later in 2008. Any slowdown will be particularly concentrated in the property sector, where house builders are rapidly scaling back their ambitions. Halifax, the mortgage lender, has reported that house prices in June were 6.1 per cent lower than a year earlier. Mark Clare, chief executive of Barratt Developments, one of Britain’s biggest house builders, announced that the company was to lay off 1,200 of its 6,700 employees. He warned that job cuts across the industry could total 60,000 out of 300,000 people employed directly. However he warned that was only part of the story: “It does not take into account the secondary effect on the supply chain, comprising kitchen companies, solicitors, mortgage advisers, and estate agents”. Further information- Barratt Investor Relations and hbosplc Financial Times 11.07.08, Guardian 12.07.08
Companies opt for 2.2 degrees to broaden talent pool; the annual survey of graduate recruitment shows that the 2:1 degree is losing its shine as the gold standard for getting a job as employers increasingly value leadership and communication skills over academic achievement. The Association of Graduate Recruiters reports that more than half of the 242 major graduate recruiters interviewed for the survey expected to report an increase in vacancies in 2008. This year almost a third (32.9 per cent) will accept a 2:2 compared to 24.7 per cent last year. There was also a steady trend towards demanding particular skills or to have had relevant work experience. There were growing concerns about a lack of hard skills such as literacy and leadership as well as soft skills such as communication. A significant proportion said that they were worried about the low levels of knowledge in mathematics and IT / technology. Click here for further information Times 08.07.08
Unfilled teaching posts rise by 23 per cent; schools are in the grip of their worst staffing crisis for years with a 23 per cent rise in the number of unfilled teaching posts. The shortfall is being blamed largely on a shortage of maths and science teachers but there is also the “demographic timebomb” of older teachers leaving the profession faster than they can be replaced. Just over half of all head-teachers are expected to retire in the next four years. The number of vacancies in nursery and primary schools has risen by nearly 32 per cent from 210 last year to 870. In secondary schools, the figure is up by 21.5 per cent from 1,210 to 1,470. The situation is worse in London where 1.1 per cent of teaching posts are vacant, compared to a national average of 0.7 per cent. Click here for further information Independent 03.07.08
Minister attacks green tax on flights; Lord Digby Jones, the trade minister, has written to Angela Eagle, the Treasury Minister, attacking the government plan to raise £2.5bn through a green tax on flights. The new tax, which the Treasury claims will help to reduce greenhouse gas emissions, would replace the current air passenger duty (APD) with a flight levy imposed on every plane including freighters, which are currently excluded from tax. This would raise £2.5bn a year by 2010, £500m more than APD. Lord Jones warns that the new tax would damage Britain’s “international competitiveness” and “our ability to attract inward investment”, which are both part of his ministerial portfolio. He also warns that there is a possible risk that air freight companies such as Federal Express and DHL will move their operations out of Britain. Sunday Times 13.07.08
MPs say Government is lagging on CO² curbs; the government is “lagging far behind” in its efforts to curb carbon emissions from its buildings and activities according to a report from the House of Commons Environmental Audit Committee. In a new report they say that emissions from government departments have dropped by just 0.7 per cent from 1999-2000 to 2006-7, much less than the eight per cent needed if it is to reach its target of a 12.5 per cent reduction by 2010-11. The report, which is based on reviews by the Sustainable Development Commission and the National Audit Office, says that the Government’s record is “very disappointing”. Click here for further information Guardian 14.07.08
PM pushes for more nuclear power stations; Gordon Brown wants at least eight new nuclear power stations to come on stream during the next 15 years and says there should be no upper limit if energy companies want to build more. Brown has argued in recent months that the world could need about 1,000 new stations to help meet the targets for cutting carbon emissions and reducing oil dependency. He told the Union for the Mediterranean Summit in Paris that a “renaissance” of nuclear power was one of the key elements in the government’s oil replacement strategy, along with greater efficiencies in vehicle, business and household use, a huge expansion of renewables and deployment of carbon capture and storage. Click here for further information Financial Times 14.07.08
Carbon trading in 2008 is already double that in 2007; the value of carbon trading reached £30bn in the first half of the year, almost double the total for the whole of 2007, according to the market analysis and consulting group, Point Carbon. The world’s trade in CO² was dominated by the EU’s emissions trading scheme (ETS), which has accounted for 70 per cent of all trades so far this year and which will grow further after the inclusion of aviation emissions from 2012. Point Carbon says that although the ETS increased its share of the global market, other markets in the US, Canada and Australia were developing. The US presidential election would also usher in a new era of US engagement as both candidates support a national cap and trade system for CO² emissions. Click here for further information Guardian 09.07.08
UK to ‘proceed cautiously’ with biofuels; the government says that it will ”proceed cautiously” over the introduction of biofuels, after a report found that they could be increasing greenhouse gas emissions and contributing to food price rises. Ruth Kelly, the transport secretary, said that Professor Ed Gallagher’s report into the indirect effects of biofuel production, did not recommend a moratorium on the fuels. The report calls for biofuels to be introduced more slowly than planned until controls are in place to prevent higher food prices and land being switched from forests or agriculture to growing crops used for the fuels. It also warns that current policies may produce more greenhouse gas emissions than savings if, for example, forests are cleared for crops. Click here for further information Independent 08.07.08
Taskforce to boost apprenticeships in London; in spite of being the UK economy’s powerhouse London has fewer apprenticeships than any other part of England according to David Lammy, the skills minister, who is to chair a taskforce to try and solve the problem. Describing the capital’s figures as “obviously very shocking” he said that apprenticeships would boost the chances of young people in his inner city constituency of Tottenham, “who are competing with other young people in other London constituencies, neighbouring counties, and are even competing in the international marketplace”. The ultra-competitive nature of the London labour market has left many people at the top and at the bottom, but relatively few in the middle. The average weekly wage is £731, by the far the highest in the country. But the employment rate is only 71.5 per cent, more than three percentage points below the national average, and many more children than average are below the poverty line. Apprenticeships could strengthen mid-level skills, where London is comparatively weak. London saw only 11,090 apprenticeship starts in 2006-07, whereas the slightly smaller north west region had 32,210. Other members of the London taskforce will include a representative from the Corporation of London as well as a City business, other employers, local government representatives and education leaders. Financial Times 14.07.08
Mayor revamps policies on skyscrapers and housing; Boris Johnson has scrapped the target of making 50 per cent of all new homes affordable and will restrict tall buildings in a reversal of some of Ken Livingstone’s core policies. The proposals for changes to the London Plan are all part of the pledges made in his election manifesto. Housebuilders will no longer be faced with such rigid affordable housing requirements although the mayor says that he is still committed to building 50,000 affordable homes over the next three years. Click here for further information Financial Times 10.07.08
Is London the centre of the legal world? The Times says that London’s four biggest law firms each earned more than £1bn last year, confirming London’s emergence as the centre of the global legal services market. Allen & Overy are announcing a 15 per cent increase in revenue in 2007-08 to £1.2bn. Profit increased by 13 per cent to £447m, with its top partners earning £1.6m. Last month Clifford Chance announced a 13 per cent increase in revenue to £1.33bn, Freshfields Bruckhaus Deringer achieved £1.17bn and Linklaters £1.29bn, although Linklaters led the profitability table. This means that four of the top six largest law firms in the world are based in London. The two others are Latham and Watkins and Skadden, both based in the US. Times 04.07.08, 05.07.09
Theatreland to get £6m makeover; Westminster Council has unveiled its Theatreland Strategy which will see £6m being spent on multicoloured street lights and sparking pavements. Theatres will renovate their entrances and use more “showtime” lighting outside to create a greater sense of occasion. Leading theatre managers welcomed the proposals. Sir Cameron Mackintosh said: “These improvements will be of real benefit to theatregoers and surrounding businesses, and recognise London as the theatre capital of the world”. The announcement comes as the Society of London Theatre revealed that London’s theatres had enjoyed their most successful year on record in 2007 with more than 13m attendances. Two thirds of the tickets sold were for musicals, which were boosted by the reality TV contests to choose cast members for Grease and Joseph and The Amazing Technicolor Dreamcoat. Further information- Westminister Council and Official London Theatre Evening Standard 08.07.08
Robin Hood Gardens not to be listed; the government has turned down a campaign by some leading architects to preserve the Robin Hood Gardens housing estate in Poplar. Tower Hamlets Council has plans to bulldoze the 1972 building and replace it. The building was designed by Peter and Alison Smithson, who were followers of Le Corbusier and were described as advocates of the “Clockwork Orange” style of brutalist architecture. Culture minister Margaret Hodge, who took the decision not to list, said that the block was “not fit for purpose”. She went on: “The architect’s brief was to design a place for people to live. But in that respect, I agree with my expert advisers, English Heritage, that it simply does not work”. Birmingham Post 02.07.08
Royal Parks to start growing cabbages; Regent’s Park and some of the other London Royal Parks could soon be making space for rows of carrots, cabbages and globe artichokes. The royal parks are pondering the creation of model allotments to give the public a living, ripening illustration of the virtues of growing your own fruit and vegetables. Colin Buttery, the Parks’ chief executive, says: “The royal parks’ role is not to have huge areas of land changed, but to act as a demonstration area to show what can be achieved. We very much want to support the idea of people growing their own food by doing small-scale demonstrations”. The Royal Parks set up two dig-for-victory allotments in St James’s Park in May to show school children the benefits of sustainability and recycling. Further information- Royal Parks, sustain web and BBC news Guardian 30.06.08
Oxford Circus to get the Tokyo treatment; the City of Westminster has launched a consultation onto a scheme to convert Oxford Circus into a Japanese-style “scramble crossing”. This would involve red lights holding back the traffic in all directions for 30 seconds to allow people to walk across the junction diagonally in safety for the first time. Existing barriers and crossings would be remodelled. A nine-week consultation began on 10th July, where Londoners are being asked their views on the proposed new layout, which forms part of a £40m investment programme for Oxford Street, Regent Street and Bond Street. Danny Chalkley said: “These proposals will bring a slice of Tokyo to Oxford Circus, and are part of a whole series of improvements already taking place to ensure that the West End looks truly impressive in time for 2012”. Work on the scheme is due to start in the summer of next year and should take nine months. Click here for further information Evening Standard 10.07.08
Cheapside as a major shopping district; the City of London has launched a consultation on plans to transform Cheapside into a major shopping district. It includes proposals to spend £3-4m on environmental improvements including widening footways, improving paving quality, planting trees and altering road junctions. The plans are part of a wider regeneration scheme that will see 167 new retail units created in order to attract weekend shoppers. The retail initiative, which is scheduled to be completed in 2012, includes developments designed by Jean Nouvel and Atelier Foster Nouvel at either end of the street. There are plans for 1m sq ft of new retail space in the Square Mile. Click here for further information Building 04.07.08
Appointments; two new appointments include Sir Trevor Chinn to chair the Mayor’s Fund for London, a charity being created to raise money for deprived areas in London, and Eric Sorensen to be chief executive of Central London Forward, a new body created by the boroughs in central London. Sir Trevor, who takes over from Bob Diamond of Barclays Capital, has been chairman of the RAC, AA, Kwik Fit and the Lex Group. Eric Sorensen is currently chief executive of the London Thames Gateway Partnership and was previously chief executive of the London Docklands Development Corporation, the Millennium Commission and the London Development Partnership. Further information- London Government and City of London Government Regeneration 04.07.08, 11.07.08
Credit crisis causes problems for another 2012 project; the difficulties of raising bank finance during the current credit crunch are causing problems for another 2012 project- the Media Centre. Like the Olympic Village, where sliding residential values have delayed any funding agreement based on sales of the housing after the Games the two development partners for the Media Centre, Igloo and Carillion, are having difficulty raising finance to cover half the cost of the centre. The likelihood is that the Olympic Delivery Authority (ODA) will provide most of the development costs for the village and may have to repeat the formula for the Media Centre. A spokesman for the ODA said that an announcement about the Media Centre was pending and “we still anticipate significant private investment”. The Evening Standard states that to save costs the number of homes to be built in the Village is being cut by 900, reducing the number to 3,300.This means that the number of athletes sharing each apartment will rise to five rather than four. More homes will be built after the Games. The Estates Gazette says that the move is thought to save more than £100m in upfront build costs. Estates Gazette 28.06.08, 05.07.08, Times 30.06.08, Evening Standard 03.07.08
Retail scheme at 2012 Games site gets the go-ahead; Westfield have announced that they have obtained all the necessary agreements to allow the £1.5bn Stratford City shopping scheme to go ahead. The 175,000 sq ft retail and leisure development, which borders the 2012 Games site, will house 30 shops anchored by the first John Lewis department store in London east of Oxford Circus, a huge flagship Marks and Spencer and a major Waitrose supermarket. Most visitors to the 2012 Games site will travel through the shopping centre, which is also expected to attract international retailers. It will be served by Stratford International station with Eurostar connections to Paris and Brussels in two hours and St Pancras in seven minutes. It will also be linked to the DLR and the Tube and, eventually, Crossrail, with 24 trains each hour going east and west at peak times. Evening Standard 02.07.08
Downturn may hit Olympic sponsorship; the Evening Standard has stated that 2012 Games chiefs have admitted that the target of raising £700m in sponsorship will become increasingly difficult due to the global economic downturn. The Games organising committee, Locog, has set a target of raising £700m from sponsorship towards the overall costs of £2.1bn. Earlier in the month it passed the halfway mark when it signed up BP as the official oil and gas supplier, in a deal worth £50m. The oil company became the sixth tier-one sponsor after Lloyds TSB, EDF Energy, Adidas, British Airways and British Telecom. Locog are known to be relieved that they tied up most of the major sponsorship deals before the credit crunch and it now has to tackle 30 tier-two and three sponsors willing to pay at least £20m, either in cash or in goods and services. It is also launching a range of merchandise to coincide with the handover of the Games after Beijing. Other income streams will include ticket receipts and broadcasting rights. There will also be some revenue from the global sponsors of the Games such as Coca Cola and McDonalds. Regarding the separate budget for construction and security Tessa Jowell, has warned; “Let no one be in any doubt: there is no more money for 2012. So if costs unavoidably go up…we will cut our cloth accordingly or make savings elsewhere to stay in the £9.3bn budget”. Evening Standard 08.07.08
Homeless in Beijing; Chinese authorities have informed London’s 2012 organisers that they can no longer use Ritan Park as London House for the duration of the Beijing Games. It is believed that they want to use it for security forces. London House was intended to be a lavish hospitality venue to attract celebrities, top businessmen and “international opinion-formers” to London in 2012. However Boris Johnson has already cut £1.2m from the £4.6m budget for London House and last month said that he was considering axing it altogether. Guardian 01.07.08
London Bridge to be the next station for a revamp; Network Rail has appointed Drivers Jonas to find a development partner for a multi-million pound scheme for the next overhaul of one of London’s main train stations. A major commercial overhaul of the station had been planned before. In 2000 Network Rail announced a £400m proposal to build around 1m sq ft of offices and shops but the plans were savaged by the heritage body SAVE and were quietly dropped. Drivers Jonas and architect TP Bennett are now reviewing the old plan which is opposite the proposed Shard tower. The original plan included 750,000 sq ft of offices above the station, 180,000 sq ft of shops and 160,000 sq ft of public concourses. The new plan is expected to include a significant increase in the scale of the development. The plans for the station have been reignited by the Government’s decision to fund a £5.5bn programme for Thameslink including upgrading the stations along the route. Estates Gazette 28.06.08
Canary Wharf submits plans for a £2bn twin; outline plans for a £2bn regeneration of Wood Wharf have been submitted by Canary Wharf on behalf of the consortium comprising Canary Wharf and Ballymore, who each own a 25 per cent share in the development vehicle, and freeholder British Waterways, who own the remaining 50 per cent. The plan, which has been drawn up by Rogers Stirk Harbour & Associates, focuses on seven acres of waterfront land on the north-west corner of the Isle of Dogs and adjacent to the Canary Wharf site. The plans include 5m sq ft of offices in six blocks around a new square, a 120-bed hotel, and six residential blocks comprising 1,668 homes. A “two-level” high street with cafes, restaurants and shops will thread through the scheme. The tallest block will be a 676ft residential tower. US landscape architect Martha Schwartz will design a 2.5-acre park. The entire scheme will be built over a 10-15-year period. Cesar Pelli, the architect behind One Canada Square at Canary Wharf, is understood to have been commissioned alongside Kohn Pedersen Fox to work on the first office towers. Click here for further information Estates Gazette 05.07.08
Foyles win Central St Martins site; Foyles, the iconic London bookstore, has been selected to buy the adjacent £30m Central St Martins college site at 107-109 Charing Cross Road. The college, which is part of the London University of the Arts, is moving to King’s Cross Central. The purchase unlocks plans for a 200,000 sq ft mixed-use scheme. Click here for further information Estates Gazette 05.07.08
Deputy mayor attacks plans for Chelsea Barracks; Kit Malthouse, one of Boris Johnson’s four deputy mayors, has attacked the architecture proposed for the Candy Brothers’ redevelopment of Chelsea Barracks as including “the worst aspects of housing design over the past 50 years”. He went on to say that the designs by Rogers Stirk Harbour and AHMM for the 638 homes in 14 blocks were “anodyne and commonplace” and were driven too much by profit. They failed to take into account the uniqueness of the 12.8-acre site. Malthouse, who was previously a Westminster Councillor, is now an elected London Assembly member for West Central. His comments came after the mayor had called for buildings to be created that would be admired in 100 years. Nick Candy said that the scheme included a £40m community hall and sports facility: “Our design has been honed down over the past 12 months after continued consultation with all local stakeholders and Westminster city council officials. CABE and the mayor of London have described it as exceptional, with particular sensitivity to all surrounding heritage considerations. We are confident that we will deliver a development that is sensitive to the needs of the local community”. Estates Gazette 12.07.08
City to get six star hotel in old bank HQ; a Russian oligarch is bidding to convert one of the City’s best-known landmarks into London’s first six-star hotel. Vladamir Chermukhin, a former deputy finance minister of Russia, plans to redevelop the Grade 1, Lutyens-designed former Midland Bank headquarters in Poultry, facing the Mansion House in the City. He plans to convert the building, which he bought for £72m in 2006, into a 184-bedroom hotel with bars, restaurants, health clubs, private members’ clubs and a roof garden. The building’s Portland stone façade is protected, as are the interior features including Lutyens’ banking hall decorated with marble Corinthian columns. The City planners’ report recommends acceptance of the plans, saying they strike a balance “between preserving the building’s special architectural and historic interest and allowing changes to secure the provision of a modern and sustainable hotel”. English Heritage, the 20th Century Society and the Lutyens Trust all welcome the scheme. At present London has no six star hotels, although there are plans to convert the Café Royal in Regent Street into one. Evening Standard 01.07.08
Dubai group announces plans for Battersea site; Omniyat Holdings, a Dubai-based company, is working up plans for a 1m sq ft site between Battersea Power Station and New Covent Garden which will comprise 1,000 flats, a four-star hotel and offices. The 4.5-acre riverside site lies at the heart of the Nine Elms Opportunity Area and plans to cash in on Treasury Holdings’ 8m sq ft plan for the power station and government plans for a £2bn mixed-use makeover of New Covent Garden Market. Omniyat is fronting a group of Middle Eastern investors who comprise the Bahrain-based Investate Realty Consortium, who paid Helical Bar and Lattice £80m for the site. The sellers had already lodged an application to Wandsworth Council for a change of use from industrial to residential and commercial. Estates Gazette 05.07.08
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Next issue on 31st July 2008
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