‘Parties and media are in denial about the real challenges ahead’; Anatole Kaletsky (pictured right) writes a comment piece for the Times when he claims that the whole British establishment - including all the main political parties and most of the media - are in denial about the real challenges for the country in the decade ahead. He says these challenges are not like climate change for which everyone knows what needs to be done, even if they are not doing it. Rather the real challenges are in health, education and foreign policy. The cost of health and education will rise so rapidly in the decades ahead that no government will be able to finance them adequately through taxes. US foreign policy is now so dangerous that automatic support for Washington can no longer command public acceptance. Yet, Kaletsky goes on, discussion of serious reforms in health, education and foreign policy are effectively taboo. Times 28.09.06
Surging house prices ‘signal start of new boom’; according to Hometrack the housing market is on the brink of a new boom, which could trigger another rise in interest rates in November. Hometrack says that central London property prices rose by 23.5 per cent in the 12 months to September 2006 - the highest rate since 1997. Overall UK price increases hit a two-year high of 4.3 per cent. Another survey by Knight Frank says that house prices in central London rose by 2.2 per cent in September alone. However, figures for Mortgage Equity Withdrawal, published by the Bank of England show a drop in householders borrowing against the value of their property from £11.3bn in the quarter to June compared to £12.9bn in the first quarter of the year. Further information - Click here, here for the Knight Frank Survey, and here for the Bank of England Statistics Independent 02.10.06
Personal debt ‘runs out of control’; according to Datamonitor the average Briton has twice as much unsecured borrowing - overdrafts, personal loans and credit card debt - as the average European. Even before mortgage borrowing was taken into account the average Briton owes £3,175, compared to £1,588 in the rest of Europe. Datamonitor say that Britons had “an insatiable appetite for credit” taking out unsecured loans of £215bn last year alone. The level of total consumer debt, including mortgages, is almost £1.3trn, close to three times the level of borrowing in 1997. Further information - Click here Independent 28.09.06
US and UK drop in competition league; the latest annual survey by the World Economic Forum (WEF) on economic competitiveness shows the US dropping from first to sixth and the UK from ninth to tenth. The survey, which is based on answers from 11,000 business leaders, says that the US drop is due to mounting concern in the US business world about the budget deficit and crumbling faith in its institutions. Although the US would remain one of the most competitive economies in the world for the “foreseeable future” the potentially open-ended expenditure linked to homeland security, coupled with plans to lower taxes mean the prospects for sustained fiscal adjustment are not too bright. On the UK the WEF says that it had slipped because of concerns about public expenditure, the state of the infrastructure and the quality of its higher education. The General Competitiveness Index for 2006 is led by Switzerland, followed by Finland, Sweden, Denmark, Singapore, US, Japan, Germany, Netherlands and the UK. Further information - Click here Independent 27.09.06
HSBC admits tax could drive it out of the UK; Chris Spooner, head of financial planning and tax at HSBC, has told a Chartered Institute of Taxation conference that the issue of the bank’s tax domicile is back on the agenda for the next three-yearly review of the location of its head office, due in six months time. So far the bank has always concluded that it should stay in the UK as evidenced by the new tower built for the Bank HQ in Canary Wharf. HSBC, which is thought to be one of the 10 biggest taxpayers in the country, has not tried to hide its irritation about the regulatory environment in the UK, particularly following the Cruikshank review of the banking industry. Speculation has intensified following last month’s ruling in the European Court of Justice that seems to clear the way for companies wanting to take advantage of lower tax rates in some EU states. Subsequently the Confederation of British Industry (CBI) waded into the debate with Richard Lambert, the director-general, marking his first 100 days in post with a warning that the trickle of companies leaving Britain to set up corporate HQ in other countries will turn into a flood unless taxes are cut on business. He instanced Dublin, where corporation tax is 12.5 per cent, compared to London, where the rate is 30 per cent. He also complained about the aggressive tactics adopted by HM Revenue and Customs. Times 06.10.06, Guardian 10.10.06
The City is Britain’s new industrial revolution; Jeremy Warner hails the role of the City as the centre of the financial services market which is an explosive, growth industry where modern technology has allowed the word ‘globalisation’ to have true meaning. He says that rather in the way that Britain stole a lead on the rest of the world during the early years of the industrial revolution, the City is more successful at them [financial services] than almost anywhere else. It now seems laughable to think about the angst that was expended worrying whether the introduction of the Euro would catapult Paris or Frankfurt ahead of the City as Europe’s leading financial centre. Today, around 80 to 90 per cent of European capital market transactions of any significance take place through the City. A combination of Sarbanes-Oxley and the madness of George W. Bush’s foreign policy have snuffed out any chance of New York rivalling London as the world’s leading financial centre. Warner concludes that we should enjoy this renaissance while we can. The speed with which Asia is developing suggests that it may be comparatively short lived. Independent 07.10.06
Cambridge cluster begins to stall; a report by Library House, a research business set up by Doug Richard, of Dragon’s Den fame, to help innovative companies, says that growth of Cambridge’s cluster of technology start-ups has stalled. It says that 12 of the cluster’s companies listed on public markets and a further 24 were either sold or merged with other businesses, generating more than £1bn of value for shareholders and management teams during the past 18 months. However there had been a net decrease of 1.5 per cent in the number of companies, and the levels of investment in the Cambridge cluster had fallen from £154m in 2004 to £125m last year. However part of the reason for this is a shift to earlier stage funding, which requires lower levels of funding. The report proposes that Cambridge links with London, Oxford and parts of the Thames Valley to create a 'super cluster'. This combined area already receives over half of the venture capital funding in the UK. Further information - Click here Financial Times 30.09.06
London leads on technology investment; another report produced by Library House on behalf of the London Development Agency looks at the state of technology investment in London, relative to the rest of the UK and Europe. It says that London’s activities as a global financial centre, including private equity investing, masks a highly active venture capital industry. It says that London is by far and away Europe’s leading centre of venture capital and technology investment. Investment levels in technology companies in London are on a par with totals of France and Germany. Companies in London are more successful in raising capital than anywhere else in the UK although mainly through larger early stage institutional rounds. However it cannot rest on its laurels. London-based companies far less well than the rest of the country in the earliest investment stages. London: Anchoring European Technology Investment is available here Financial Times 07.10.06
Venture capitalists get excited about spin-offs; according to the Financial Times the recent British Venture Capital Association conference on ‘Turning good science into good business’ excited interest from investment groups, business angels and universities. The FT says that in Britain, Government initiatives have helped to sharpen up the efforts of universities trying to exploit their own innovations; now private sector interest has also picked up. In the past three years 25 university spin-off companies have floated on the stock exchange and one in five companies backed by venture capital is a university spin-out, according to Unico, the body that represents university technology transfer offices. Several new sources of capital have entered the market including publicly quoted intellectual property exploitation companies, such as Biofusion and the IP Group, and business angel networks. Amongst the speakers at the conference, who included Anthony Clarke of GLE, was Sir Richard Sykes, the rector of Imperial College, where the conference was held. He dismissed the idea that university spin-outs found difficulty finding funding, declaring, “If you’ve got the good ideas, then you will get the money”. However Quester, a leading venture capital company, which manages four seed funds for nine universities, published a paper on the key ingredients for building viable spin-outs. It concludes that while the UK has an “outstanding” network of universities, commercialisation opportunities are hindered by difficulty attracting high-quality management. They also expressed concern that that although some investors remained wary, competition was becoming too fierce. Further information - Click here for BVCA's Conference and here for Quester Financial Times 28.09.06
Local authorities pressed to co-operate on business aid; Rt. Hon. Margaret Hodge MBE MP (pictured left), tells the Financial Times that as part of Gordon Brown’s pledge to streamline the £2.6bn-a-year business support system, ministers are developing strategies to force local government to co-operate. Government analysis shows that more than 1,200 of the 3,000 schemes identified by the Department of Trade and Industry’s (DTI) research are run by local authorities. The minister admits in the interview that meeting the Chancellor’s pledge to have completed the cull by 2010 would be a “difficult task”. With 40 per cent of the schemes run through local authorities “local government is going to be a huge issue”. At present the DTI cannot dictate changes to the schemes to councils but government is developing “effective levers to ensure that we can meet the target”. Ministers were starting with a voluntary approach and the Treasury had written to local authorities, as part of preparations for next year’s spending review, “asking everybody to report on their plans for simplification” of business support schemes. The minister admits that the task of “getting rid of backroom bureaucracy” by rationalising the business support system was itself complicated. Schemes had to be streamlined across regional development agencies, seven government departments, various “non-departmental public bodies and the local authorities. Financial Times 09.10.06
MoD wants to back military technology start-ups; Lord Drayson, the Defence Procurement minister (pictured left), tells the Times that the forthcoming Defence Technology Strategy paper to be published in the next few months will detail how the Ministry of Defence (MoD) wants to create a culture of innovation. This could mean giving equity backing to scientists and entrepreneurs to develop the next generation of military technology in their garages or university laboratories. This would mirror the pharmaceutical and software industries where start-ups were common. Traditionally the MoD has left innovation to giant defence contractors such as BAE Systems, or to its defence labs - now privatised and called QinetiQ. However civilian technology is playing an increasingly important role on the battlefield and Lord Drayson believes that outsourcing innovation to start-up companies will be better for the military and taxpayers. This could either be done through equity stakes or running competitions to develop bits of technology. Times 09.10.06
More angels but smaller deals; figures released by the British Business Angels Association shows that twice as many small and medium-sized firms have raised funds from angel investors in the first six months of 2006, but the average investment has dropped from £180,000 to £70,000. The number of registered business angels has increased by 76 percent with 5,112 now operating within the UK. Further information - Click here Financial Times 08.10.06
Tesco continue to surge; Tesco have reported first-half profits of £1bn for the first time. It is also the first time any British retailer has achieved that level of profits. Tesco made much of their plans for expansion overseas coupled with their existing trading success in eastern Europe and Asia. It is also getting ready to expand in the US. In the UK it already accounts for 31 per cent of the grocery market, and sales of non-food items have surged by 12.5 per cent to £3.5bn. Another retailer that is diversifying is John Lewis who has set up a joint venture with Axa to be called Greenbee to sell home, travel and wedding insurance over the Internet. It will also join up with Friends Provident to sell life insurance and will move into ticketing and travel agency services with Cox & Kings, Expedia and Seetickets. The research group Defaqto has already ranked John Lewis home contents policy as the “number one policy” and its buildings insurance as second best. Marks & Spencer announced it was moving into electrical goods last month. Independent 04.10.06
First NHS social enterprise gets under way; Central Surrey Health, a new, limited, not-for-profit company, employing some 650 nurses and therapists started life on 2nd October. The first of a new form of social enterprise, where former NHS employees sell their services back to the local primary care trust, is being watched closely by the government who hope it will be the first of many. The new enterprise has faced criticism from the unions, who see it as part of the drift into privatisation, and from some in the private sector who see the John Lewis-type partnership as “a cosy deal” struck between the Primary Care Trusts (PCT) and its former staff. Jo Pritchard and Tricia McGregor, former directors of nursing and therapy respectively see the three-year £20m contract as a unique opportunity “to put nurses and therapists back in control”. To get things going they have “gone through a lot of learning” having to draw up a business plan, learn about cash flow, dealing with banks, lawyers and even marketing. The PCT paid their salaries as they developed the idea over 18 months and Futurebuilders, the government fund to assist the community and voluntary sectors, gave them a grant. Some of the professional advisers worked for nothing at the start, intrigued by the innovation. The health department provided some cash and sent Ms McGregor off on a course at the Oxford University Said Business School to learn about social enterprise. Most important of all the PCT, in spite of the contract’s size, utilised EU procurement rules that exempt healthcare, and did not put the service out to tender. Further information - Click here Financial Times 02.10.06
Silicon Valley looks to the London Aim market; the FT says that dozens of Silicon Valley companies are lining up to float on Aim, London’s junior market, as US businesses weigh up ways to raise funds at home amid the high costs of going public under Sarbanes-Oxley. More than 100 technology companies have been considering listing on Aim, and London Stock Exchange officials have made at least six visits to the Bay area in the past year. Financial Times 09.10.06
UK slips in productivity table; the productivity of British workers has slipped back, compared to those in other advanced economies according to data from the Office for National Statistics. The UK’s persistent weakness in productivity worsened slightly in 2005 so that the average worker in the G7 group of major economies was 11 per cent more productive than the UK average - an increase of one per cent over 2004. Part of the reason is the loner working hours in the US, but even with the US removed the rest of the G7 is seven per cent ahead. Further information - Click here Times 05.10.06
Brent is the most ethnically diverse area in UK; the Office for National Statistics (ONS) has published the first official index of diversity. The greatest diversity is found in 24 London boroughs as well as Birmingham, Slough, Leicester, and Luton where there is less than a 50 per cent chance of two strangers meeting each other coming from the same racial group. In Manchester, Wolverhampton, Oxford, Blackburn and Bradford the likelihood of bumping into someone of the same ethnicity is at least 40 per cent; and in Coventry, Watford, Cambridge and Reading it is at least 35 per cent. The London borough of Brent was the most diverse: at the time of the last census in 2001, 29 per cent of the residents were white British, 18 per cent Indian, ten per cent black Caribbean, nine per cent other white groups, eight per cent black African and 26 per cent from other groups. The ONS says that any two people in Brent have an 85 per cent chance of coming from different racial groups. In Newham the figure is 83 per cent, Westminster 71 per cent and in Kensington and Chelsea 68 per cent. Two hundred local authorities scored less than ten per cent; Carlisle, Hartlepool, Barnsley, St Helens and Berwick upon Tweed were under five per cent. The least multicultural was Easington in County Durham, at two per cent. Further information - Click here Guardian 06.10.06
A bleak picture of ethnic diversity; the FT reports that research by Robert Putnam (pictured right), one of the world’s most influential political scientists, paints a bleak picture of the corrosive effects of ethnic diversity. His research shows that the more diverse a community is, the less likely its inhabitants are to trust anyone - from their next-door neighbour to the mayor. Professor Putnam, who is based at Harvard but is currently working with social scientists at Manchester University, is delaying publishing his research until he can develop proposals to compensate for the negative effects of diversity, saying it “would have been irresponsible to publish without that”. He stressed that although trust was lowest in Los Angeles, “the most diverse human habitation in human history”, his findings also held for rural South Dakota, where “diversity means inviting Swedes to a Norwegian picnic”. British Home Office research points in the same direction. However Professor Putnam stresses that immigration materially benefited both the “importing” and the “exporting” societies, and that trends that “have been socially constructed, can be socially deconstructed”. Financial Times 09.10.06
Large developers look to subsidy for small shops; large developers are looking for ways to subsidise rents for independent shops in a bid to boost community relations. The British Property Federation (BPF), which represents the major developers, is in negotiation with the New Economics Foundation to research how Section 106 could be used to offer peppercorn rents. Ken Dytor, representing the BPF at the Labour conference, called for a balance between chain stores and independents. He said that ethnic minority-run independents could act as “community glue” and be vital in the fight against terrorism. Regeneration 06.10.06
US companies see the gains in going green; an article in the FT Comment Section examines why an increasing number of US companies are going green, despite the indifference of George W. Bush’s administration to global warming, including its opposition to the Kyoto treaty and the capping of carbon dioxide emissions. The article by John Gapper (pictured left) says that US companies faced with improving their image and reputation for corporate social responsibility can either increase costs by paying workers more and abstaining from moving production offshore, or cut costs and perhaps increase revenues as well, by reducing dependence on fossil fuels and developing green products. For energy-consuming companies (even for many energy-producing ones) environmental action creates a rare degree of alignment between being socially responsible and increasing shareholder value. They can make energy-efficient products, such as GE’s Evolution-series locomotives or reduce costs by saving energy such as DuPont, who estimate that they have saved $3bn in energy costs since 1990. Wal-Mart’s new found evangelism has been attacked as an attempt to turn attention away from its employment practices but it has saved $25m a year and 100,000 tonnes of carbon emissions by fitting auxiliary engines to trucks for use when they idle at rest stops. There is another motive in the belief that Mr Bush’s opposition to federal regulation is unsustainable. According to the Pew Centre for Global Climate Change 80 per cent of US companies expect federal regulation by 2015. The most likely form is a cap-and-trade initiative similar to the EU’s Emission Trading Scheme. Offsets are already being traded on the Chicago Climate Exchange. Further information - Click here for the Pew Center and here for the Chicago Climate Exchange Financial Times 02.10.06
US-style celebrity fundraising comes to the UK; almost 500 wealthy entrepreneurs and business tycoons as well as show business personalities attended the launch of the Fortune Forum held at Old Billingsgate in the City. They were addressed by former President Bill Clinton and Michael Douglas (pictured right), the actor and UN Messenger of Peace. Guests, who included Lakshmi Mittal, raised over £1m to benefit specific projects from charities including the Red Cross and Wateraid. Renu Mehta, the organiser of the event, said that she saw it as a “Davos of philanthropy” and she wanted to create a club that will encourage more people to follow the lead of Bill Gates, Richard Branson and Tom Hunter. She instanced Robin Birley, the owner of Annabel’s and other clubs, who has created African Renaissance, a group that uses carbon trading as an instrument to tackle African poverty and deforestation. Financial Times 30.09.06
Guidelines on CSR are simplified; following growing concern that interest in non-financial reporting will be confined to a handful of multinationals, a new set of simplified guidelines for corporate social responsibility have been drawn up in the hope of encouraging more companies to report on their environmental and social impact. Global Reporting Initiative (GRI), the Amsterdam-based not-for-profit agency responsible for drawing up the guidelines, said that for the first time the framework included an “entry-level” option. This means that businesses can choose to report on a limited number of issues, which, it is hoped, will encourage SMEs. Achim Steiner, executive director of the UN Environment Programme, which commissioned the report, said that, “Over three to five years [a company] can move from the first level to the highest level of reporting. Ernst Ligteringen, chief executive of GRI, said that so far more than 2,000 businesses had adopted the guidelines during the past four years. The new guidelines, which were launched at a conference attended by more than 1,000 businesses and organisations, are based on suggested improvements put forward by trade unions, NGOs and businesses. Further information - Click here Financial Times 06.10.06
Edinburgh best for quality of life; the latest issue of the European Cities Monitor, compiled by Cushman & Wakefield, has named Edinburgh as the best city in the United Kingdom for quality of life. The choice is made by business executives in a survey of 33 of Europe’s leading business cities. London remains as the top choice for the location of a business. The UK vote, which chose Edinburgh, was made by executives from 201 companies, and amongst the factors cited was the freedom from pollution as well as beautiful architecture and major international events such as the Festival and the New Year celebrations. However it was franked as the most expensive place to park a car and was beaten by Glasgow as being the best place to locate a business. Edinburgh was followed by Bristol, Leeds, Manchester, London, Cardiff, Newcastle, Glasgow, Nottingham and Sheffield. Further information - Click here Independent 30.09.06
Honda creates 700 jobs in Swindon; Honda has announced that it is to start recruiting immediately for 700 extra employees for its Swindon plant to increase capacity to 250,000 units a year. It is the third announcement of increased capacity in the UK motor industry in the past two months. Nissan has announced that it is to build a new model at its Sunderland plant next year, while BMW is to invest £200m to raise production of the Mini at Oxford and launch a new version next year. Between them the three announcements will offset three-quarters of the job losses resulting from this year’s decision by Peugeot to close its Ryton plant near Coventry. The BMW-owned Rolls-Royce has also announced that it is to produce a series of smaller, cheaper luxury cars at its factory at Goodwood in Sussex with the next four years. By ‘cheaper’ the company means £135,000 as opposed to the £250,000 of its current sole model, the Phantom. Financial Times 29.09.06
Ministers drop clues about local government; a number of speeches made at the Labour Party Conference in Manchester provide clues to the contents of the forthcoming white paper on local government and the final report by Sir Michael Lyons on local government finance. Gordon Brown, the Chancellor, pledged to devolve powers over transport and economic regeneration saying, “It is right that local councils, not just Whitehall, should have power over things that matter to the local community and from economic regeneration to public transport, the empowerment and strengthening of local councils and local communities is what we must do”. Douglas Alexander, the transport secretary, said that plans to see control of bus timetabling and fares handed back to local councils would be launched soon whilst Phil Woolas, the local government minister, told a fringe meeting that the government would reduce the amount of ring fencing of local budgets to allow councils more discretion about local spending. Ruth Kelly, the communities’ secretary, told the British Property Federation that local authorities would take over large-scale development powers as part of the drive to speed up planning. Regeneration 29.09.06, Estates Gazette 30.09.06
Greater Manchester region to get go-ahead; speaking at the Labour conference Ruth Kelly (pictured right), the communities and local government secretary, said that she would be endorsing the proposals put forward by Greater Manchester for a strategic, conurbation-wide authority led by a cabinet of leaders. She said that the proposal put forward by the ten councils in the former Greater Manchester metropolitan county would be stronger and more accountable than alternative models put forward by other English core cities. Although she acknowledged that she is a supporter of the mayoral system adopted in London she said that she had agreed to “go slower” and accept less radical proposals because of council resistance. The white paper is due out at the end of October. Regeneration 29.09.06
Treasury lays down the law about city-regions; Treasury minister Ed Balls, (pictured right) has confirmed that whilst the Chancellor is willing to consider greater economic development powers for local authorities he has rejected the idea of larger city-regions. Speaking to the Manchester Chamber of Commerce ahead of the local government reform white paper he said that the government could not afford to get “bogged down” in creating new regional structures akin to the London mayor and assembly in other parts of the country. He also emphasised that there would be no tinkering with the structure of the regional development agencies. But in a further sign of the Chancellor’s growing interest in constitutional reform and strengthened parliamentary accountability, Mr Balls said there was a need for MPs to do a better job scrutinising local and regional authorities, possibly through select committees meeting outside London. However he did offer some prospect of greater powers for local bodies, “I believe that we should build on the successful devolution in urban regeneration and economic development by giving more power to the regional and local levels”. The Chancellor has already indicated that he is interested in devolving power and removing power from the politicians from day-to-day management of public services, such as the NHS. Next year’s comprehensive spending review would look at whether local government and the Regional Development Agencies had the right powers and incentives. He also hinted that that the Treasury was opposed to the devolution of planning and transport powers directly to local councils, perhaps preferring to work with groups of councils. Further information - Click here Financial Times 06.10.06
IFS says reforms have undermined work incentives; the Government’s reforms to the tax and social security systems aimed at “making work pay” have, in effect, weakened financial incentives to take jobs, according to a report by the Institute for Fiscal Studies. The think-tank recognizes the difficulty faced by ministers in seeking to redistribute income to the poor while maintaining work incentives. Mike Brewer, one of the report’s authors, said that if more money were to be given to the poor or the jobless, unemployment would become financially more attractive. Similarly, if more money were to be given to people on low pay, taking it away as they got richer would have the effect of raising tax rates and discouraging greater effort. The report concludes that the two main ways for a government to help people with low incomes are in head-on conflict. Whilst most people’s tax rates have remained on 33 per cent, Mr Brewer said, “a minority have seen an incredibly large increase” to 70 per cent because they face the withdrawal of tax credits. Further information - Click here Financial Times 05.10.09
Private childcare faces sharp rise in fees; parents are facing a sharp rise in nursery fees in the New Year as private nurseries are forced to increase staff wages to fend off competition from the subsidised children’s centres. The annual pay survey for Nursery World magazine finds that the salary of a nursery manager in the private sector has risen by an average of 12.3 per cent this year to £21,547 but that the children’s centres are offering £27,000. Fees are the only source of income for the private nurseries so they are forced to pass on the wage increases. Salaries account for 80 per cent of costs and fees are an average of £140 a week. The private sector accounts for 78 per cent of childcare places but the government is planning for 3,500 children’s centres by 2010 - five for each constituency. A Department for Education Skills survey found that only 25 per cent of private nurseries make a profit, with 31 per cent breaking even. Reacting to parents who have lobbied in favour of the smaller and more intimate nature of the private and voluntary sector nurseries the Government has said that it is committed to a diversity of supply. Times 30.09.06
Hire the aged; the Economist looks at the new sweeping age-discrimination laws and whether British companies are ready for them. It says that small firms are nervous and that according to a Business Link poll 90 per cent of their advisers think that small firms are not ready. The Federation of Small Business forecasts that the current total of £210m a year spent on industrial tribunals will rise sharply. However the Economist says that loose labour laws are one of the reasons why some 58 per cent of all British aged 55-64 are in work compared to 44 per cent in France and just 33 per cent in Italy. In the past year 99,000 of new workers in the UK were over the retirement age. Countries like Belgium and France have early-retirement schemes whereas no such incentives exist in the UK. By 2025, 40 per cent of the UK population will be over 50. Rising life expectancy and worries about pensions will mean that this trend will continue. Economist 30.09.06
‘Middle class mothers turn off poor from Sure Start’; according to the Times, ministers are taking action to prevent middle-class parents from hijacking the £3bn Sure Start programme designed to help the most deprived families. The first evaluation of the programme concluded that better-off children were gaining more from the scheme than poorer ones. The evaluation spoke of disadvantaged mothers being “overwhelmed or turned off” by the service. Anecdotal evidence from London, where wealthy families often live in nominally deprived areas, shows that Sure Start centres are increasingly popular with middle-class mothers. The Times says that it has learnt that next month managers of the 1,000 Sure Start schemes will be instructed to monitor the class and ethnic origin of visitors to the centres and take action if users fail to reflect the neighbourhood’s social mix. Times 06.10.06
UK and US dominate list of world’s best universities; Cambridge and Oxford now rank second and third in the top three universities in the world with Harvard ranked top. Cambridge moved up from three to two replacing MIT whist Oxford rose from four to three. MIT is now ranked equal fourth with Yale. The table, which was compiled by the Times Higher Education Supplement, also shows sharp rises from by University College London (28 to 25) and King’s College London (up from 73 to 46). The London School of Economics falls from 11th to 17th. In all there are 29 UK universities in the top 200 compared to 23 last year. Times 05.10.06
Church pledges 25 per cent of places to non-faith students; the Church of England Education Board has written to Alan Johnson, the education secretary, to pledge that a quarter of the places in any new schools that it opens will be offered to non-church families. The Church has faced criticism that its admissions policies favour the middle classes. Currently 25 per cent of children attend Church of England primary schools but just six per cent at secondary level. This means that demand far exceeds supply at secondary level, and research shows church schools admit far fewer pupils from disadvantaged backgrounds than other schools and take more than their fair share of bright pupils. Further information - Click here Times 03.10.06
Schools poor at teaching citizenship; despite the Government’s determination to make citizenship lessons a key weapon in the fight against extremism, schools are failing to ensure their pupils are politically and socially literate according to Ofsted. The education watchdog says that although the subject has been compulsory since 2002 only a minority of schools have embraced the subject with enthusiasm, while a quarter of the schools inspected in the past year were judged “inadequate” for the quality of their lessons. It says that citizenship is usually taught best in its own right, rather than as part of a personal, social and health education programme (PHSE) or in cross-curricular fashion with elements included in subjects like history, geography or english. A review of the 11-14 curriculum is already under way and the Ofsted inspectors make it clear that more room will have to be found for citizenship. Further information - Click here Guardian 28.09.06
Public schools challenged to create private universities; Michael Thorne, vice-chancellor of the University of East London, has challenged the leading independent schools to join forces with big US education companies to set up private universities. Speaking to the Headmasters’ and Headmistresses’ Conference, he said that such a move would help raise the UK’s low level of private sector investment in higher education to US levels. It would also bring greater diversity into the UK’s “unusually narrow” university sector. He said, “Eton and Harrow are worldwide brands. It would be an easy stretch, wouldn’t it, to go to Eton University?” Leading US education companies such as Kaplan and the Nasdaq-listed Laureate, are all showing an interest in Europe’s higher education market. Kaplan is already working with Sheffield University to develop a pre-undergraduate foundation course. Many public schools have already shown a willingness to “leverage” their brands by setting up city academies, whilst Dulwich and Harrow have gone even further by establishing franchises in Thailand and China. The government has recently allowed non-university affiliated education providers, such as the College of Law, to award degrees. Professor Thorne said that many of the best universities in the US for business courses were run by private institutions. Financial Times 05.10.06
One million receive substandard schooling say MPs; a hard-hitting report from the House of Commons Public Accounts Committee spotlights failing secondary schools where only a small percentage of pupils get five GCSE passes as Grades A to C. It says that the 980,000 pupils that go to these schools do not receive a proper education. The committee urges that once failing schools are identified they should be helped to return to a more acceptable standard more quickly. They call for more dynamic head teachers to be brought in, as well as Ofsted, the schools inspectorate spending more time at low-performing schools. The committee’s findings are backed up by Sir Cyril Taylor, head of the Specialist Schools and Academies Trust, who says that there are 500 under-performing schools and that “some are so bad they ought to be shut down quickly, some are struggling and need help”. Further information - Click here Observer 08.10.06
Institutional investors launch group on climate change; a group of 15 institutional investors, led by Insight Investment (part of HBOS), managing assets worth £850bn have signed a statement calling for urgent and effective action by policymakers and companies to address the threats posed by rising greenhouse emissions. The Institutional Investors Group on Climate Change also calls for all parties to work together to develop appropriate policy solutions. The pension fund signatories pledge to incorporate climate change considerations into how they appoint, evaluate and reward their asset managers. Some funds, such as the London Pension Fund Authority have already built these requirements into their investment management agreements. Insight has analysed how climate change may affect their investments. The Group also commit themselves to develop their collective efforts as well as taking a more active role in the debate. The statement is being formally launched at a conference being held in Paris on October 12/13. Further information - Click here Financial Times 04.10.06
BAA says flying tax would hit the economy; BAA, the Spanish owner of Heathrow, has told a fringe meeting at the Conservative conference that a flying tax would damage the economy but would not produce the desired effect on the economy and would inconvenience by pricing people out of aeroplanes. Stephen Nelson, chief executive of BAA, said that a carbon-emissions trading scheme was the best option for mitigating the environmentally damaging effects of flying, which he said would be “both effective and popular”. Aeroplanes account for two per cent of global carbon emissions, which is expected to rise to 15 per cent by 2050. Under a trading scheme, airlines would buy permits to cover their carbon dioxide output above a certain limit, or sell them if they undershot the target. The aviation industry is taxed by the airport passenger duty charge, which levies airports on every traveller going through their terminals, but support has been growing for a further tax on flying. Guardian 03.10.06
Clampdown on air travel ‘a must’; the Tyndall Centre for Climate Change has claimed that a clampdown on air travel is necessary if the government is to meet its stringent targets to cut greenhouse gas emissions. Kevin Anderson, research director for Tyndall, says that moves by the aviation industry to develop greener fuels and more efficient aircraft will come in too late to slash carbon dioxide emissions by 60 per cent by 2050. Over the past 30 years, air passengers in the UK have increased fivefold. While aviation now only emits seven per cent of emissions by private vehicles in the UK, it is on course to be an equal greenhouse gas emitter by 2012. Dr Anderson’s team have worked out that Britain must not release more than 4.8bn tonnes of carbon dioxide between 2000 and 2050 if it is to meet the government’s target. However the country has already emitted 25 per cent of that amount in the first six years, and this is due to rise to 45 per cent by 2012. Scientists assessed the impact of transport on Britain’s greenhouse gas emissions over the coming decades. This shows that even if the rate of growth in aviation and shipping declines by two per cent, emissions will still be so high that only dramatic cuts in others sectors would allow the government to reach its target. Further information - Click here Guardian 06.10.06
Business reacts to Blair’s call for tougher controls; reacting to Tony Blair’s (pictured right) warning at the Labour Party conference of tougher environmental controls on business, employers groups have urged him to ensure that any environmental obligations do not unfairly penalise corporate Britain or undermine its competitiveness. The groups said they had no argument in principle but warned about making business a scapegoat. Richard Lambert of the CBI said “Business clearly has a role and responsibilities in this whole area of sustainability and climate change. It’s interesting how many businesses I meet who are up for this - they’re not in a state of denial. Some of them are already making quite significant steps in reducing carbon emissions in various ways. What was missing from the speech is that we’re all going to have to change our behaviour in different ways….this is a challenge for the whole of society, for business and for individuals as well”. David Frost of the British Chambers said that business understood its environmental duties “but our members are under intense pressure from globalisation. Don’t burden business with more and more costs”. Financial Times 27.09.06
London ’will soon have 18-20 skyscrapers’; Ken Livingston, speaking after Minerva abandoned plans for the City’s highest skyscraper, the Mayor says that he believes that there will be 20 skyscrapers in the capital within ten years - an increase of 11 on current figures. He says, “When I was elected you had two tall buildings. I think you’ve now got nine and by 2015 you’ll have perhaps 18-20. You’re talking about one a year”. The Observer says that Livingston’s optimism is not shared by leading property developers who say that fewer than half the current proposals will see the light of day. Most agree that the Heron Tower in Bishopsgate will go ahead and the other most likely tower to be built is the Shard of Glass at London Bridge. It is likely that Land Securities will build its 36-storey tower in Fenchurch Street, which got planning permission last month. Observer 01.10.06
Lord Mayor marks Ramadan; David Brewer, the Lord Mayor, hosted an event to celebrate Iftar, the evening breaking of the fast after sunset during Ramadan. The gathering at Mansion House, the first of its kind to be hosted by the City, was seen not only as a sign of the growing Muslim presence in Britain’s financial centre, but also the capital’s aspirations to become a Western centre of Islamic banking. Organised partly by Sir Iqbal Sacranie, a former head of the Muslim Council of Great Britain, the City hosted a conference on Islamic banking in June, which was addressed by the Chancellor. About nine per cent of the London population is Muslim and there are an increasing number of Muslims now working as bankers, financiers and other jobs in the City. HSBC has recently established Amanah Bank to offer Muslim banking services. Times 30.09.06
English ‘a foreign language’ in inner London schools; Government figures obtained by the Conservatives show that English is a foreign language for a majority of pupils in 348 of the 695 primary schools in inner London. Inner London’s secondary schools are also experiencing large demographic changes with more than half of the pupils in 53 of the 132 total speaking English as a second language. In outer London, more than one in four primary schools (248 out of 1,136) have at least half of pupils not speaking English as a first language. In secondary schools, the figure is one in five (50 out of 2,065). Nationally one in five pupils are now from an ethnic minority. Evening Standard 10.10.06
New age legislation could cause problems for the City; major law firms are warning that the new Employment Equality Age Regulations 2006 Act could cause problems for banks and other financial institutions. The new legislation forbids any form of age discrimination in the workplace and protects older workers from being supplanted by younger, cheaper staff. Lawyers say that the way in which the act is drafted takes no account of the culture on the dealing floor, which inevitably favours the younger operative. Jane Amphlett, head of the discrimination unit at Addershaw Goddard, said that culture in the City did not favour retirement at 65. “People go in young, they work their socks off and they earn large amounts of money. Either they burn out and it’s felt time to leave, or they reach a retirement age of 50 or so”. The new act does allow for exemptions where the employer can show that a degree of age discrimination is entirely sensible, for example for health and safety reasons, but these are narrowly drafted and may not cover the culture of the dealing room. Times 02.10.06
Charity space in Southwark; Community Action Network is planning to open the second of its Mezzanine office centres to provide space for social enterprises and charities in Loman Street, Southwark in 2007. Its first Mezzanine is sited at London Bridge. Further information - Click here Regeneration 06.10.06
Fast track for Polish builders; the decision of the Construction Industry Training Board to set up an office in Warsaw to fast track migrant workers into Britain to work on the Olympics, has been attacked by trade unions and local MPs. The pilot scheme will concentrate on honing the skills of Polish builders and familiarising them with health and safety laws. If it is successful it will be extended to other eastern European countries. Lyn Brown, MP for West Ham, said, “I understand the pressure on the organisers of the Games to ensure that they come in on time and budget but we must recognise that the original purpose of the Olympics was regeneration so that we have to ensure opportunities for local people”. Further information - Click here Observer 08.10.06
Scrutiny team appointed for Olympic building; the Olympic Delivery Authority has appointed a special committee to determine whether the projects are on track. The four members of the committee are Sir Peter Mason, former chief executive of Amec, Sir Roy McNuly, chairman of the Civil Aviation Authority, Christopher Garnett, former chief executive of GNER and Lorraine Baldry, chairman of the London Thames Gateway Development Corporation. Further information - Click here Sunday Times 08.10.06
CentrePoint gets a makeover; following the news that Oxford Street is to get a transformation Stephen Bayley devotes a page in the Observer to the plans to revive the area around CentrePoint and the Tottenham Court Road end of Oxford Street. He says that architects Stanton Williams, together with urban planners Gillespie’s, have been retained to rejuvenate the public space around CentrePoint. The “depressing” fountain will be replaced and a ‘strong and simple streetscape’ created. The entries into the tube station will be crystalline structures, glowing bizarrely at night. The size and shape of new buildings will be varied and passengers in the new ticket hall at Tottenham Court Road will get clear views of the Seifert building. Camden Council claim that it will become a ‘major world space’ and to confirm the changes the top three floors of CentrePoint are to become the venue for Soho’s latest elite club. Observer 01.10.06
FA looks to Wembley compromise; faced with the protracted dispute with Multiplex, which is delaying the completion of Wembley Stadium, the Football Association is investigating a range of options with Quintain, who are developing the area around the new stadium. At the same time Lord Carter, the former chairman of Sport England and who previously acted as the government’s trouble-shooter over the Commonwealth Games arena in Manchester and the original proposals for Wembley, has been asked to repeat the process. A number of proposals are being investigated including the transfer of the stadium to a new joint venture with Quintain, revenue sharing schemes or a deal whereby Multiplex are handed a role in the wider redevelopment scheme. Times 02.10.06
Shell appoints Norman Foster; Shell has appointed Foster & Partners to consider an ambitious redevelopment of the Shell Centre on the South Bank next to the London Eye. The oil giant is keen to make best use of the 5.5-acre site, but does not want to demolish the existing building. One option is thought to be the construction of an iconic office tower depending on the attitude of the Mayor and local planners. Times 03.10.06
Mixed-use schemes are failing; research into mixed-use schemes in residential areas in London show that commercial space is lying empty in 40 per cent of them. According to London Development Research (LDR) of the 551 schemes completed between 2001 and 2004, 220 have commercial space that is at least partly vacant. Overall 34 per cent of the office space and 27 per cent of the shops built before 2005 stand empty - rising to 75 per cent for office space completed in 2005. The figures are even higher in inner London with almost half of the commercial elements of mixed-use schemes in Lambeth and Camden standing empty, although property in Westminster and the City appear to fare better. Because mixed-use is enshrined in the London Plan many developers proposing homes are often forced to add commercial space, usually on the ground floor, to gain consent. Tim Craine of LDR believes that many of the schemes stay empty because tenants do not want to locate in run-down areas. Retail space may fail because it is in streets that lack footfall. He says that the anticipated profits to be made from residential have led to high levels being built on non-viable business space. Estates Gazette 30.09.06
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