The UK’s real threat lies in overvalued housing; Gavyn Davies, a former Treasury adviser and now chairman of Fulcrum Asset Management, has come down in favour of the Bank cutting the bank rate this week. He says that the mood in the City is bleak as the market comes to terms with the credit crunch. He says that as a consequence of Alan Greenspan’s decision to reduce US interest rates to about one per cent when the dot com bubble burst there was a leverage bubble, driven by easy borrowing, fuelled robust growth in the global financial services industry, and the London economy was at its centre. Now it’s payback time. The financial services industry is never slow to take the opportunity to make a quick profit. That is its greatest strength- but also the source of its vulnerability. With central banks in the US and Japan providing unprecedently easy money, investment and commercial banks found no shortage of ways to channel that money into the rest of the economy. For the most part, Britain imported the adverse effects of this bubble. The Bank of England did little to fuel the boom, keeping interest rates much higher than the international average. The reality is that global finance is now a single marketplace and London, without question, is now the capital of global finance, so bound to benefit when worldwide financial services enjoy a surge. However the leverage collapse needs to be kept in perspective. A sharp contraction in financial services would dent the UK growth rate, but not sufficiently to cause a recession. A much more serious problem is the housing market. The IMF calculates that UK house prices are 27 per cent above the rate suggested by underlying fundamentals. It is far from clear that this has been caused by the leverage bubble, but is clear its collapse threatens to cause a severe correction. This is the real threat and that is why the Bank needs to address it by lowering rates. Guardian 08.04.08
Skilled migrants are vital to the economy; a Centre for Economics and Business Research (CEBR) study, compiled for Harvey Nash, concludes that skilled migrants fill skills shortages and that without them the country’s international competitiveness would suffer. It estimates that these migrants, the majority of whom work in education, health and government services, already account for 2.5 per cent of the country’s workforce and generate more than £36bn for the economy in what they produce. However, the report, entitled Future Flows, forecasts that this will rise to 2.8 per cent and £46bn in 2012, based on economic trends and predicted demands for professionals such as nurses and IT specialists. Albert Ellis, chief executive of Harvey Nash, said: “Skills are critical to the UK economy, but critically lacking in our current workforce. Far from undermining the UK labour market, migration is vital to future economic stability, helping to fill in the gaps created by older and under-skilled workforces and make an important economic contribution”. Click here for further information Guardian 25.03.08
The City’s fortunes are linked with the ‘real economy’; Gary Duncan looks at what he calls the commonplace observation that there is a supposedly yawning reality gap between the Square Mile’s present, ever-deepening woes and purportedly more benign conditions in the “real economy” across the rest of the UK. He says that this view was given some credence by the Governor of the Bank of England when he pointed to the “remarkable resilience”, so far at least, of consumer spending and employment, and agreeing there is a sharp division of economic experience between the City and the real economy. Duncan says that the idea that the financial world and the real economy can exist in separate orbits, with little influence on each other, is a forlorn hope. He points to the fact that despite lowering interest rates three leading lending institutions have had to raise their mortgage rates because of the funding drought. He points to the views of Michael Saunders, of Citigroup, who suggests that for the past decade both spheres have thrived as the financial sector provided the easy credit that fuelled a boom in domestic demand and asset prices. The excesses of recent times have left a legacy of record indebtedness for companies and households, steep interest and repayment costs, depleted savings and stretched asset prices. These leave Britain exposed to the credit squeeze’s imminent impact. Times 31.03.08
Factory price rises add to inflation fears; the latest report from the Chartered Institute of Purchasing and Supply and NTC shows that British manufacturers are having to pay the highest price for raw materials for 13 years and that they have also suffered another drop in orders. The news is likely to concern the Monetary Policy Committee of the Bank of England (MPC), which is meeting this week, amid speculation that it will reduce interest rates by a 0.25 to five per cent, because of the growing impact of the credit crunch. In addition mortgage rates are rising- or in some cases being suspended because of credit shortages- while the construction industry is suffering a sharp downturn. On the other hand the MPC is going to have to balance rising inflationary pressures from high food and energy costs. Ross Walker, economist at RBS, said that another surge in input cost pressures, combined with factory gate inflation climbing to a record high, highlighted the MPC’s policy dilemma. “Activity is moderating, but inflation has not subsided. The ultimate extent of the deterioration in the UK’s output-inflation trade-off remains uncertain. It probably won’t prevent a bank rate cut in April but is likely to limit the total amount of monetary policy loosening over the course of the year”. Click here for further information Guardian 02.04.08
CBI says government is clobbering the corporate sector; Britain’s businesses will see their tax bills increase by more than £4bn over the next three years, as a result of a battery of money-raising measures that came into effect this week according to the CBI. The CBI is especially critical because it says the government is clobbering the corporate sector as it struggles to withstand the downturn. John Cridland, the deputy director-general, says: “When the economy is slowing, the last thing a government should do is raise taxes on that part of society that creates jobs and wealth, but that’s what is happening”. Click here for further information Observer 06.04.08
Cabinet Office picks 6,000 civil servants to be “change agents”; the Cabinet Office has hand-picked 6,000 civil servants whose task was described by Sir Gus O’Donnell, the cabinet secretary, as a pioneer corps that would carry the flag of innovation and change within Whitehall. They have started their work with a three-day briefing at the QEII conference centre featuring talks from permanent secretaries as well as the prime minister and outside celebrities such as Matt Dawson, the rugby player. Some of those attending were chosen as contestants in a civil service version of Dragons’ Den, to test their ideas for reorganising offices and saving money. The Guardian says that the training is particularly aimed at staff at HM Revenue and Customs and the Department of Work and Pensions. Guardian 31.03.08
US firms in ‘bring baby to work’ scheme; the Independent reports on a new trend amongst US companies: companies who allow new mothers to bring their babies to work. It says that although the idea sounds nuts at first it is catching on and not just with mother-and-baby related businesses such as baby carrier manufacturers or Mothering magazine. According to a new lobby group called Parenting In the Workplace Institute, babies are now a feature at work stations in dozens of design companies, advertising agencies, law firms, banks and food manufacturers. Many company lawyers ask mothers who bring in new-borns to sign a waiver, releasing the employer from any consequences. The scheme is popular in states where populations in decline such as Kansas or North Dakota. However there are employers who are anxious to avoid the sight of babies in the worklplace. Ernst & Young are offering subsidised childcare in the home to encourage new mothers back to work on their own. Click here for further information Independent 03.04.08
Asda want overseas suppliers excluded from ethical code; supermarket chain Asda wants overseas suppliers excluded from a new code of conduct, designed to ensure that big grocers do not use their buying power to impose unfair trading terms. The UK arms of US-based Wal-Mart empire has included the demand in its response to the Competition Commission’s “remedies” statement, published after a two-year inquiry into the £125bn grocery market. The Commission suggested setting up an ombudsman service to help protect small suppliers and farmers, and supermarkets may be forced to appoint compliance officers to ensure they treat suppliers in accordance with a new and wide-ranging code of practice. In its response Asda says overseas suppliers should be excluded because they have customers in other countries. Asda is understood to be the only supermarket to have made this demand. Click here for further information Guardian 07.04.08
Top City law firms under pressure ‘to promote women and minorities’; London law firms are under growing pressure to promote more women and people from ethnic and other minorities according to Simon Davies, the new managing partner of law firm Linklaters. He told the FT that the big firms were lagging behind other sectors on diversity and needed to do better. Big firms accept that women account for 50 per cent of trainees but rarely more than 20 per cent of partners. His remarks come as leading firms- driven by customer comments, the threat of law suits and worries about recruitment- are setting up initiatives aimed at attracting those who have traditionally felt unwelcome in a historically conservative profession. Linklaters have started a programme of spotting and supporting talented people whilst other major law firms such as Clifford Chance, and Allen & Overy have founded groups to address the concerns of female, gay and lesbian or racial and ethnic minority workers in the past 18 months. Sir Ian McKellen recently addressed Herbert Smith’s internal network for lesbian, gay, bisexual and transgender employees. There are worries that special interest and minority networks could cause stigmatisation or become sticking plaster for larger work-life balance problems. Financial Times 08.04.08
Buckinghamshire declared the best place to live in the UK: the first quality-of-life survey by the Halifax estate agency chain, part of the HBOS group, says that Buckinghamshire is the best place to live in Britain for quality of life. The only two areas in the top ten that are outside London and the south-east are Suffolk, which is ranked seventh, and the Vale of Glamorgan at eighth. The highest placed Scottish place is East Dunbartonshire, at fifteenth. Buckinghamshire’s advantages include an average salary of £40,000, almost 80 per cent own their own homes, which tend to be larger than the national average and the county enjoys more sunshine each week than the national average. Buckinghamshire is followed by Surrey, Berkshire, Bromley, Hertfordshire, Oxfordshire, Suffolk, Vale of Glamorgan, Richmond-upon-Thames and Sutton. Other London boroughs in the top thirty are Harrow (14th), Kingston-upon-Thames (18th), Bexley (20th), and Havering (23rd). In inner London Wandsworth leads at 44th. Click here for further information Times 29.03.08
Where have I heard this before? The government is mooting the idea of proposing a new wave of super-councils covering entire metropolitan areas, according to a new consultation document on the Review of Sub-National Economic Development and Regeneration, published by the Departments for Business & Enterprise and for Communities & Local Government. The document calls for local authorities in city-regions that wish to take on more than just economic development powers to consider merging with their neighbours. The document seeks views on the proposals contained in the original Sub-National Review for putting in place reforms that would streamline the regional tier, strengthen local authority role in economic development, and support collaboration by local authorities across economic areas. This was originally seen as the way to create city-regions dealing with economic development, but now the government is looking even further although there will be echoes of the old metropolitan councils that covered the six conurbations of London, Bristol (Avon), Birmingham (West Midlands), Leeds (West Yorkshire), Manchester (Greater Manchester), Liverpool (Merseyside) and Newcastle (Tyne and Wear). The document envisages that city-regions could have planning powers and the right to raise levies on business rates. Click here for further information Regeneration 04.04.08
Credit crisis could delay major regeneration schemes; developers of some of the major regeneration schemes are braced for a hiatus as banks, nervous about debt financing and the slowdown in the housing market, take a cautious approach to regeneration projects seeking substantial funding. However Kevan Carrick, policy spokesman for the Royal Institution of Chartered Surveyors (RICS), says that the banks’ reappraisal- which could result in a “three to six month hiccup should be seen more as a blip than a significant issue” and that it is just part of the economic cycle. Gareth Potts, research and policy director at the British Urban Regeneration Association says that regeneration has come to be seen as an asset class in its own right and the sector is benefiting from market predictions that it will generate greater returns than commercial property. The tightening of UK market conditions comes just as the Thames Gateway, Europe’s biggest regeneration project, is finally getting under way and other schemes in the north and south reach a critical point. Newcastle city council announced the names of the three consortia shortlisted for the £500m redevelopment of the Scotswood area, which will involve up to 1,800 new homes on 150 acres. Another is the 1,035-acre Ebbsfleet Valley scheme, which is part of Thames Gateway, where Adam Cunnington of Land Securities is overseeing the scheme. He says they have a 20-year plan, which makes market fluctuations easier to bear. The same sentiment is uttered by the Greenwich Peninsula, one of the largest Thames Gateway projects and London’s largest regeneration scheme. Mike Youkee, the joint chief executive, says that at the moment momentum is good and that that he remains confident because “we have got a big site and we can control the rate of supply”. Other major schemes include the Olympic Park; Wembley City; Canning Town and Custom House; King’s Cross Central; Granton Waterfront in Edinburgh and Stratford City. Financial Times 04.04.08
Hazel Blears announces another planning review; ministers at the Department for Communities and Local Government (DCLG) have announced a new review, “Planning Applications: a faster and more responsive system”, intended to speed-up Britain’s often sluggish planning system. The recent planning reform bill has changed the rules to make it easier for large infrastructure projects to pass through the system. But government wants to re-examine ways to improve the planning application process to make it more “user-friendly” and to eliminate red tape. Developers have long complained that their attempts to get a building off the ground are often delayed by a morass of paperwork and slow-moving council bureaucrats. Lobby groups such as the Council for the Protection of Rural England, however, dismiss such carping as the inevitable by-product of a proper democratic process. Although councils are making progress in the speed with which they handle applications the DCLG reckons there are problems such as excess paperwork and also delays after planning is granted. The review is to be jointly led by Joanna Killian, chief executive of Essex County Council, and David Pretty, former chief executive of Barrett Developments. Click here for further information Financial Times 25.03.08
Plans for 10 eco-towns bring accusation of political opportunism; the Department for Communities and Local Government has announced a shortlist of 15 proposed sites from which the 10 new eco-towns will be chosen. Pointing out that 12 of the 15 sites were in Conservative constituencies Greg Shapps, the shadow housing minister, said that it smacked of political opportunism. There were fierce attacks on the idea both from conservation bodies as well as newspaper columnists Caroline Flint, the housing minister, said that the schemes would be Britain’s first new towns for nearly 50 years and they could provide up to 100,000 new homes under ‘green’ standards. They would be built to zero-carbon standards with modern insulation and green technologies, as well as large amounts of open space. Click here for further information Daily Telegraph, Guardian, Financial Times 04.04.08
RDAs believe that they will retain control over cash; Regeneration argues that an imminent government consultation on the reorganisation of regeneration will, rather than hand over control to the town halls, leave the regional development agencies (RDAs) in control of their own funds. Last year the Review of Sub-National Economic Development and Regeneration (SNR) was widely interpreted as advocating the devolution of RDA funding to town halls and city regions. Steve Broomhead, chief executive of the North West Regional Development Agency, said: “I don’t think it’s a case of us doling out money. That would be too crude. We will agree with local authorities which sort of economic programmes they need to embark upon. We will agree with them their economic outcomes… we will then evaluate what they achieve”. Regeneration 28.03.08
British cities excel at revival; British cities have experienced stronger economic improvement over the last decade than those in most other European countries according to researchers in the Urban Policy Department at Glasgow University. They found that Britain filled seven of the top 20 places in the European league of urban employment revival- thanks to the performances of London, Southampton, Derby, Sheffield, Liverpool, Coventry and Newcastle. All suffered a loss of jobs between 1985 and 1995- mainly due to industrial decline- but they bounced back strongly in the following decade through the growth of services. Professor Ivan Turok said that the recovery in employment had been particularly strong in the cities in the north and west of England. However, he warned: “It will also be a challenge for the UK government to sustain the urban renaissance in the chill winds of economic slowdown”. Click here for further information Financial Times 07.04.08
Rogers says urban regeneration may be creating the slums of tomorrow; Lord Rogers has attacked what he calls the slow and shoddy progress in the rejuvenation of towns and cities with estates that would look the same in “Beijing, Buenos Aires or Belfast”. He also attacked the cumbersome planning process, choosing the example of Terminal 5, which he began designing nearly 20 years ago, as a case where long delays (of a bureaucratic rather than luggage-handling variety) were unnecessary. But it was for urban regeneration projects such as Thames Gateway, the swathe of east London and Thames estuary earmarked for 160,000 new homes by 2016 at a cost of £9bn that he saved his most biting analysis. He pointed out that the proliferation of “toy-town houses and Dan Dare glass towers” was evidence of the way in which the laudable aim of government to encourage people back to cities has resulted in a plague of mediocre architecture. Going more widely he attacked new housing generally: “There is also something wrong when new houses across the country form rootless estates and could just as well be in Beijing, Buenos Aires or Belfast. These are developments, which have no regard for a community’s sense of place, belonging or identity. I fear we are building the slums of tomorrow but it shouldn’t be. Britain has some of the best architects in the world”. Independent 29.03.08
Repetitive renewal ‘fails the deprived’; a new report by the New Economics Foundation says that residents of deprived areas are caught in a “groundhog day” of renewal initiatives that have little impact because they do not improve on past policy failings. Hitting the Target, Missing the Point argues that failure to effectively measure the impact of regeneration policies has led to a perpetuation of similar initiatives, leaving the lives of those living in disadvantaged areas largely unchanged for the past 30 years. The report’s author said that evaluations of the impact of regeneration programmes often focused on “easy-to-measure” economic output such as the number of jobs created and people trained. They did not provide a “true or sufficient” measurement of the changes to people’s lives. The Department for Communities and Local Government has rejected the findings, saying: “No government has done more to turn around and breathe new life into our deprived areas”. Click here for further information Regeneration 28.03.08
Protests at empty building tax; the property industry is making a last-ditch effort to persuade the government to reverse its £1.3bn tax on empty commercial buildings, claiming that it could stymie development and lead to urban wastelands. The tax that came into effect last week sees property owners pay rates on all unoccupied buildings for the first time after a limited grace period. The move is set to net the government up to £1.3bn a year, as well as support its ambition to help businesses find premises. But it has met opposition from across the industry, including occupiers and developers, who say they will knock down buildings rather than keep or build potentially costly buildings in a difficult market. The protests have been joined by the CBI and the British Chambers of Commerce. However John Healey, the local government minister, has rebuffed the calls for change: “These reforms… will potentially reduce commercial rents by bringing empty buildings back into use”. Click here for further information Financial Times 01.04.08
2007 was a record year for new starts and for failures; according to research compiled for Barclays a record number of new businesses were set up in 2007, but the year also saw a record number of companies going bust. Entrepreneurs set up 471,500 new companies last year, the highest since the bank started collating the data in 1988 and a three per cent rise on 2006. However, there was an eight per cent rise in the number of closures, reaching 498,900, one of the highest totals during the last 20 years. The increase in failures is seen as an indication that the economic slowdown was starting to take effect. Click here for further information Financial Times 05.04.08
Councils win almost £300m from promoting economic growth; the awards under the third and final year of the Local Authority Business Growth Incentive (Lagbi) have been announced by the Department for Communities and Local Government. The biggest winner is the City of Westminster with £10.9m with Birmingham second with £7.4m. Other London boroughs have done well led by Southwark (£6.4m), Kensington & Chelsea (£4.0m), Ealing (£3.69m) and Brent (£2.8m). Click here for further information Regeneration 04.04.08
After 3i withdraws, who will fund start-ups? Jonathan Kestenbaum, chief executive of the National Endowment for Science, Technology and the Arts (Nesta), examines the decision by 3i to abandon start-up investment in favour of higher returns upstream. He says that the exodus of 3i, and a host of other players before it, marks another blow to the UK entrepreneur and the economy. The recent report by Lord Sainsbury, Race to the Top, refers to the need to make UK companies the best in the world, but many now will find it hard to get out of the starting blocks. What is needed to make private sector investors come back to this space is more proof of the value of early-stage investing. The public sector needs to take the lead. Public funds are also not always well directed. While the chancellor’s recent addition of £30m to the Enterprise Capital Funds is welcome, to date these funds have tended to back companies at later stages of development. If early-stage finance is to be successful it will need to look and act differently. Public funds need to take the lead in building new models of investment and rigorously evaluating their effectiveness. If the returns justify the risk, private money will once again follow. Financial Times 26.03.08
GLE becomes Europe’s largest source of early stage funds; GLE Group has announced the completion of YFM Group to become the largest provider of equity capital to small and growing enterprises in Europe with over £330m funds now under management. YFM are the UK’s most active investors in the SMEs, and have been successfully investing since 1982. They have a team of over 40 investment managers based in ten regional offices. The combination of the two groups expands GLE’s reach throughout the UK and Europe and reinforce GLE’s Growth Capital business activities which include London Business Angels- the oldest business angel network in the UK, the UK’s first Enterprise Capital Fund Seraphim Capital and London Seed Capital, the UK’s first angel co-investment fund. Anthony Clarke, Managing Director of GLE Growth Capital, said: “Through the joining of GLE and YFM we will now be regarded as the first point of call for early stage high growth businesses seeking funding”. Click here for further information Financial Times 07.04.08
Small firms to get R&D vouchers; a new white paper published by the Department for Innovation, Universities and Skills (Dius), says that from 2011 at least 1,000 small-and-medium-sized businesses a year will be handed “innovation vouchers” to enable them to buy services from universities and research organisations. The aim of the vouchers, which will be managed by England’s regional development agencies, will be to help SMEs to meet the bill for funding innovation and help them to overcome cultural or social barriers to engaging with research bodies. The white paper also outlines plans for a pilot Specialisation and Innovation Fund, which will pay the further education sector to help businesses boost innovation. It also details how the Government will harness the purchasing power of public procurement to stimulate innovation. Click here for further information Regeneration 21.03.08
Credit crunch hits directors of family businesses; research by corporate rescue firm Begbies Traynor shows that banks are forcing entrepreneurs and family-run firms to take out second mortgages on their homes and offer personal guarantees before offering business loans. Many banks were also charging penal rates of interest or refusing to extend loans to small businesses unless they agreed to offer their personal assets as security, and in particular their main home. Nick Hood of Begbies Traynor, said: “We are getting busier and busier, and the banks are telling us they have an increasing number of businesses in intensive care… This is not a good time for any business to fall out with their bank manager”. Business insolvencies have remained steady over the past two years despite a huge rise in personal insolvencies. But insolvency experts say they are expecting a steep rise in the number of corporate victims over the coming months as businesses run out of cash. Recent research by the Small Business Research Trust showed that small businesses faced increased costs of borrowing. Click here for further information Guardian 02.04.08
Teach enterprise GCSE call by Sir Philip Green; leading entrepreneurs have urged the government to consider launching a separate enterprise GCSE to encourage a greater culture of entrepreneurialism amongst school leavers. Sir Philip Green, owner of Arcadia, said: “It’s about starting the process early enough. There needs to be a general knowledge and understanding of business to get young people interested and involved”. Although Sir Philip questioned whether he himself would have benefited from an enterprise qualification his call was backed by James Caan, serial entrepreneur and a panel member of BBC TV’s Dragons Den, who stressed the importance of ensuring young people viewed starting their own firm as a viable option. However, Tim Campbell, founder of the Bright ideas Trust, which helps young people to launch their own businesses, said that he was concerned whether entrepreneurialism was something that could be taught. “It’s the old nature versus nurture debate”, he said. Under the current provisions introduced in September 2005, enterprise education allows for the equivalent of five days in the academic year, focusing on innovation, creativity, risk management and risk taking. The Department for Children, Schools and Families said that there were no plans at present to introduce any new qualification focusing exclusively on enterprise. Financial Times 05.04.08
Government adviser casts doubt on ‘tough love’; Jane Slowey, chief executive of the Foyer Federation and newly appointed leader of the policy group to explore the idea of ‘commitment contracts’ has attacked the tough line being taken by Caroline Flint, the housing minister, as “superficial and narrow”. Following a speech to the Fabian Society when she expressed concern about the level of worklessness in tenants of social housing Caroline Flint set up two policy groups to look at the issues. She is particularly keen on commitment contracts- agreements between unemployed tenants and housing providers that the tenancy is granted on condition that the tenant will seek employment. Flint has suggested that the measures could be used to tackle entrenched worklessness on council estates. However Slowey questions this approach saying that she thinks a more sophisticated approach is needed rather than saying everybody who is unemployed must do training or work, or lose their right to social housing. She wants the policy group’s mandate to be driven by a sense of social justice and focused on ensuring the right support and opportunities are available to people living on estates with high levels of worklessness. She said that the principle of “something for something” had worked well at Foyer, but attributed that to a focus on building relationships, not the use of sanctions. Regeneration 04.04.08
Employers slow to sign government skills pledge; less than 15 per cent of organisations have signed up to the employers skills pledge, one of the government’s main planks to raise the standard of British workers, according to a survey of 700 employers by the Chartered Institute of Personnel and Development. The study reports that only 39 per cent of employers felt that ‘learning and development activity’ had been positively influenced by the Leitch review on skills published in December 2006. Only 13 percent had signed up to the skills pledge, recommended by Lord Leitch to help raise literacy and numeracy skills and equip every worker with Level Two qualifications equivalent to five A to C grades at GCSE. However, there was some encouragement in that nearly half of employers were “considering or would consider signing the skills pledge or the train to gain initiative”. Some 75 per cent of private sector employers reported that funding for training had remained stable or had increased in the past 12 months. This compared to 54 per cent in the public sector. Click here for further information Financial Times 07.04.08
Labour pledge on university numbers ‘doomed to fail’; despite a pledge by the government that half of young adults would become university students by 2010 new figures show that the proportion has scarcely risen over the past eight years. Figures for the past academic year 2006-07 show that the proportion of 18-30-year-olds at university was 39.8 per cent, up from 39.2 per cent in 1993. The figures for men may give cause for concern as their proportion has fallen from 37 per cent in 1999 to 35 per cent whilst the rise in young women has increased from 41 to 45 per cent. University participation peaked in 2005 when 42 per cent of young adults enrolled in the year before top-up tuition fees were introduced. Times 28.03.08
Swedish group plans 30 academies starting in Richmond; Kunskapsskolan, Sweden’s biggest independent schools group, has announced plans for 30 academies or trust schools in England within the next 10 years. Ed Balls, schools secretary, welcomed the move, saying it was “vital we learn from the best practice abroad”. Kunskapsskolan schools would introduce the group’s education philosophy, which gives more personal responsibility to well-behaved pupils. Although the company would act as an academy sponsor, it would not put up any money- in line with the model of cashless sponsorship by public schools introduced by Whitehall last year. Kunshapsskolan have already been chosen by the London borough of Richmond as its “preferred sponsor” for two academies to replace Hampton Community College and Whitton School. Click here for further information Financial Times 05.04.08
Labour ‘killing Britain’s renewables industry’; the Independent on Sunday accuses ministers of strangling the very industry they will need to help them meet ambitious targets for renewable energy and build new eco-towns across the country. The number of households installing solar panels and other clean energy systems has slumped by up to three-quarters in England and Wales because grants to make them more affordable have been slashed and rationed. Earlier in the month energy minister Malcolm Wicks rejected widespread pleas to increase them, leading the industry to warn that it was being driven to the wall. This compares with the Scottish government which last month trebled the funding to help families, businesses and communities to install clean energy. Michael Meacher, the former environment minister, called the government’s approach “unspeakable” and said that it was “unremittingly hostile to renewable energy”. The industry is also bracing itself for a further setback if Boris Johnson replaces Ken Livingstone as mayor, as Livingstone’s plans to install renewables in the capital has been one of the things keeping it going. Independent on Sunday 06.04.08
Four countries in race to be first to go carbon neutral; four countries have formally signed up to go carbon neutral at last month’s annual meeting of the General Council of the United Nations Environment Programme (UNEP). Iceland, New Zealand, Norway and Costa Rica joined the Climate Neutral Network. Achim Steiner, UNEP’s executive director, spelt out the challenges that the four face. Norway’s was emissions from oil and gas; New Zealand’s pollution came from agriculture; Iceland’s was transport and industry, including fishing and; while Costa Rica faced special circumstances being a developing country. All four contenders already get much of their energy from renewables. Iceland has gone the furthest, achieving almost complete carbon neutrality in heating buildings and electricity generation. However the fishing fleets and cars are still running on fossil fuels. New Zealand aims to generate 90 percent of its energy from renewable sources by 2025 and to halve its transport emissions by 2040. But is has major problems with agriculture, which accounts for half of its emissions of greenhouse gases. Norway has an even more ambitious target, aiming for carbon neutrality by 2030, despite being the world’s third largest oil exporter. It already gets 95 per cent of its electricity from hydroelectric power and heavy taxes cars and fuel. And it is planning to capture and store carbon in the old North Sea oil fields. However its motor lobby is strong and may prove difficult to convert. It is the same with Costa Rica, which aims to be carbon neutral by 2021 but its number of cars has increased more than five-fold in the past 20 years. Click here for further information Independent on Sunday 30.03.08
‘Johnson in secret talks on how to run London’; the FT runs a story that Boris Johnson, the Tory frontrunner in the London Mayoral contest, is holding secret talks with potential executives for the new administration if Ken Livingstone is defeated. The Conservative leadership is anxious to ensure that Johnson, under attack from Labour for his lack of experience in running big institutions, has a high-calibre team to administer London’s £11bn budget. Asked if there were concerns that a poorly run London under a Tory mayor could damage David Cameron’s chances at the next General Election, a shadow cabinet minister tells the FT: “Absolutely… we need very good people in place to help Boris”. Financial Times 25.03.08
Main mayoral candidates fail to impress business; the London mayoral candidates are failing to address some of the most important issues for the capital’s business community, according to an analysis of their policies commissioned from London First by the FT. Baroness Jo Valentine, chief executive of London First, said: “London has been a victim of its own success: its rapid growth has left us with choked-up streets, unreliable and overcrowded trains and third world airports. We’re not looking for grand promises from the mayoral candidates, just a sense that they can deliver”. All three main candidates are lambasted for their dogmatic opposition to the expansion of Heathrow and there is disappointment about their proposals on congestion. On the Tube they welcome Livingstone’s promise to push through a £1bn modernisation programme but they are seeking greater clarity from Boris Johnson and Brian Paddick. On new housing they consider Johnson and Paddick to offer more- a situation that is reversed on Climate Change where the Mayor gets lukewarm support and the other two candidates are thought to have come up with “disappointingly little detail”. All three candidates are thought to do fairly well on crime but there are questions on how they would fund extra police. On the wider issues the Mayor scores better than his rivals on some matters of importance to business, possibly because in office he has had to deal with some of these issues such as the future of the West End and maximising the business benefits from the 2012 Games. Financial Times 26.03.08
The slump in London house prices has started; according to Land Registry figures London house prices fell by 0.4 per cent in February leaving the average price at £353,760. Almost a third of boroughs saw property prices dip with the biggest losers being Kensington & Chelsea, the area that has benefited most from City bonuses. Values fell by 0.7 per cent, a figure that may be connected to the big fall in the number of properties changing hands for more than £1m. This fell 37 per cent from 327 to 215. The Land Registry figures, which are seen as the most reliable because they record the actual price paid at completion, show that the losses were largely concentrated in the wealthier boroughs of west and south west London. The other boroughs where prices fell in February were Barnet, Ealing, Hillingdon, Islington, Kingston-upon-Thames, Merton, Richmond-upon-Thames and Wandsworth. Although annual house price inflation in London is still running at 10.6 per cent experts believe the turning point has now passed. Click here for further information Evening Standard 01.04.08
London stations to be upgraded; Network Rail has created a joint venture with Kier Property to undertake a £500m redevelopment of a swathe of stations in London and the south-east. The London stations include Enfield Town, Twickenham and Walthamstow as well as a site in Wembley. Outside London they include Epsom, Guildford, and Maidstone East. Network Rail has already established deals for a number of London stations including Euston, Victoria and Waterloo. Click here for further information Financial Times 03.04.08
Exhibition Road to be part pedestrianised; £40m scheme to transform Exhibition Road into a world class tourist attraction will begin this summer. The road, which is home to some of London’s major museums, will be part pedestrianised in three phases. The news comes 18 months after previous makeover plans were scrapped when they failed to secure Lottery funding. A new funding package has been agreed between Westminster City Council, the Royal borough of Kensington and Chelsea and Transport for London. Under the new scheme the pavements will be removed so that traffic and people share a York stone and granite surface stretching the width of the street. To slow drivers to 20mph, designers will mimic the “naked streets” design in Kensington High Street where all railings, unnecessary white lines and signposts were removed to encourage motorists and pedestrians to “share” the road. Traffic will be restricted to one lane in each direction leaving room for an 800 metre boulevard stretching from South Kensington tube to Kensington Gardens. Other measures will include tree planting, and making the tunnels more welcoming. The aim is to create the equivalent of New York’s “Museum Mile”, with venues encouraged to use the boulevard for performances and events. The first phase from South Kensington tube to Cromwell Road will start in July until early 2009, phase two from Cromwell Road to Imperial College will start in March 2009 and phase three from Imperial College to Kensington Gore in 2010. Evening Standard 27.03.08
Union wants construction training raised to another level; Union wants construction training raised to another level; Ucatt, the main construction union, has complained that workers involved in the building of the 2012 Games’ facilities will be, in effect, de-skilled because their training falls short of government recommendations. It says that almost all the training being made available to more that 1,000 local people will be set to lower standards than those recommended in the Leitch report into skills. Up to 90 per cent of training will be to NVQ Level 2 (equivalent to four GCSEs grade A-C) whilst Leitch recommended Level 3 (equivalent to two A-levels). Ucatt says that Level 3 produces a fully qualified craftsperson whereas Level 2 delivers only a few necessary skills. Alan Ritchie, Ucatt’s general secretary, says: “It’s disappointing. This country is crying out for young, skilled construction workers. The Olympics are a golden opportunity, which is in danger of being missed.” John Armitt, chairman of the Olympic Delivery Authority, said in reply: “The areas around the Olympic site in east London have high levels of unemployment and the 2012 Games can help to change this. That is why our strategy is focused on getting people on to the first level of training and into work”. Click here for further information Times 31.03.08
Housing mooted for media centre site; the possibility that the Olympic Broadcast Centre site in Hackney Wick will not be used exclusively for employment has been raised by a spokesman for the London Development Agency (LDA). He said: “There could be an element of housing or a hotel, but the main driver will be jobs”. The comments came after the contract to build the media centre was won by mixed-use specialist developer Igloo and construction firm Carillion. The centre is planned to offer 120,000 sq metres of floorspace, making it bigger than the Canary Wharf tower. One source close to the project has suggested that the building’s retention after the games would not necessarily be as a major media hub saying, “the site has more potential than that”. However Tom Russell, the LDA’s group director for Olympic Legacy, recently told delegates at the MIPIM property fair in Cannes that Soho in central London was becoming overheated and that “there is room for a major media hub elsewhere in the capital”. Regeneration 21.03.08
Plans for Chelsea Barracks site lodged with Westminster; plans for the UK’s most expensive residential development at the former Chelsea Barracks site have been lodged with Westminster Council. The joint venture between the Qatari government and property entrepreneurs Christian and Nick Candy, is planning to build the UK’s most luxurious residential scheme, comprising 319 private residential flats, as well as a potentially seven star boutique hotel, with two restaurants and a word-class spa. The top end of the residential market is still seen as being in good health despite the turmoil elsewhere in the market. The scheme is being designed by architects Rogers, Stirk, Harbour & Partners with the Candy’s own design and development team designing the interiors. In addition to the 319 private apartments the scheme will also include 319 affordable housing units. The Candy Brothers largest project to date has been One Hyde Park, where more than half the units have been sold before completion at an average price of £20m each. The brothers are also developing Noho Square on the site of the old Middlesex Hospital in Fitzrovia. Financial Times 07.04.08
Battersea seeks new advisers for redevelopment; two of the UK’s leading property advisers- CB Richard Ellis and Knight Frank- are going head-to-head to win the instruction to advise Treasury Holdings on its redevelopment of Battersea Power Station. Treasury bought the Power Station from Hong Hong-based Parkview in December 2006 for £400m. Since then it has appointed 63-year-old Uruguayan architect Rafael Viňoly to remasterplan the 38-acre site. Viňoly’s plans, which are expected to include a significant number of houses, replace Parkview’s Arup-designed masterplan. Parkview had gained permission for a 1.46m sq ft leisure and retail-led scheme, with just 750 houses. Estates Gazette 29.03.08
Bids received for major inner London sites; the final deadline for bids for the two Central Saint Martins development sites in Charing Cross Road and Southampton Row expired last week as did the bidding for News International’s “Fortress Wapping” headquarters. The Central Saint Martins sites, which are available as the college is moving to King’s Cross Central, are expected to fetch around £60m and £30m respectively and developers showing interest include Hellical Bar, Great Portland Estates, and Stockland Halladale. Stanhope are also on the list of those looking at the 14-acre site in Wapping as are Canary Wharf, Land Securities and Ballymore. Estates Gazette 29.03.08, 05.04.08
New hotel for Inner Temple; Apex Hotels have bought an office building at 1-3 Sergeants’ Inn from the Honourable Society of the Inner Temple for around £27m. It plans to invest £60m in converting the building into a four star, 170-room hotel. It will be Apex’s third hotel in the City of London and is planning to expand the City of London Hotel as well as developing another hotel on Coptall Avenue. Property Week 19.03.08
Ferrari comes to Regent Street; luxury car manufacturer Ferrari is to open its first UK retail store on Regent Street. It will sell branded merchandise, including clothing and toy cars, from the 7,000 sq ft store, which was previously occupied by Racing Green. Estates Gazette 05.04.08
Blackfriars tower is called in; despite being approved by Southwark Council, the Beetham Organisation’s plans for 557ft residential tower at 1 Blackfriars Road has been called in by the secretary of state for communities and local government. The plans for the scheme have already been scaled back by 170 ft to meet objections by the Commission for Architecture and the Built Environment. Estates Gazette 05.04.08
Plans to transform Olympic fringe site; the London Thames Gateway Development Corporation has produced a planning brief for the 20-acre Hancock Road industrial area at Bromley-by-Bow. They have sent the proposals for an 860,000 sq ft mixed-use scheme to the three landowners of what is currently a rundown industrial area. The three landowners are Tesco, Trad Scaffolding and Crowley plumbers. The brief outlines plans for a 130,000 sq ft uncovered shopping centre, anchored by a 54,000 sq ft Tesco; between 1,500 and 2,300 homes, 50 per cent of which must be affordable; 242,000 sq of industrial space and a small amount of affordable workspace units for the creative industry. Estates Gazette 05.04.08
London office availability rises by 50 per cent in the first quarter of 2008; according to Drivers Jonas’ latest report the amount of available Grade A space in the central London office market has risen by 50 per cent in the first quarter of the year. At the end of March the total was 1.74m sq ft compared to 1.17m sq ft in March 2007. The main reason for the increase is the number of speculative buildings being completed. In the West End total availability rose by nine per cent to 2.54m sq ft, while in the City it rose by one per cent to 4.12m sq ft. The City figures are better than expected but there is 6m sq ft of speculative development waiting to come on stream in the City. Anthony Duggan, head of research at Drivers Jonas, said: “The looming City pipeline is what people are really worried about. The City has an average amount of development in the pipeline for an OK market, but it is a lot for a weak market”. Click here for further information Estates Gazette 05.04.08
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