Brown to keep public spending plans under wraps; during his evidence to the House of Commons Treasury select committee, Stephen Timms (pictured right), chief secretary to the treasury, revealed the comprehensive spending review did not have to be published until October. The four government reviews previously conducted have all been published in July. The move is being interpreted as a manoeuvre by the chancellor to ensure that if Tony Blair stays on until the European Union summit on 22nd June and then leaves office, the incoming chancellor would not have to deliver the spending review within three weeks of taking office. The review, which has already been delayed by a year, will settle spending - and therefore the relative priority of - health, education, defence, trade and industry, science, overseas aid and other sectors until 2011. If it does move to October it will leave the spending departments and public sector bodies such as schools and hospitals with five months - rather than the 21 they expected - to deal with the big changes that are anticipated in spending as cuts are made in health, education and elsewhere. Timms did confirm that the overall level of public spending growth would be announced in the Budget, and that the figure currently pencilled in is “below two per cent” which contrasts with increases of three and 4.8 per cent in the last two spending rounds. Financial Times 31.01.07
IFS say that taxation has risen by £40bn since 1997; in its annual summary of options for the Budget the Institute of Fiscal Studies (IFS) says that if the chancellor (pictured below) sticks to the plans in his budgetary forecasts, the public expenditure review will deliver the tightest squeeze on spending for a decade. Given the automatic increases in tax revenues, Brown should be able to strengthen public finances without raising tax rates. The IFS estimates that the chancellor has increased tax rates by £6bn a year since 2005, and will receive an extra £10bn over the next five years from fiscal drag. Although public spending is expected to rise 1.9 per cent more than inflation, it will gradually fall as a percentage of GDP. It repeats its call for the next chancellor to improve fiscal rules and restore credibility. George Osborne, the shadow chancellor, said that the IFS analysis of the last ten Budgets show that taxes as a share of GDP were the equivalent of £40bn higher than in 1997. Further information - Click here Financial Times 31.01.07, 01.02.07
IFS also claims that Treasury has hidden more than £500bn liabilities; the true cost of public debt is up to 87 per cent of GDP, more than twice the figure quoted by the chancellor according to the IFS. The Institute says that using the government’s calculations for the costs of public pensions, private finance initiative schemes, and Network Rail’s debt, (which the Treasury guarantees) it reaches a total figure of more than £1,100bn - twice what the Treasury admits to. Further information - Click here Observer 04.02.07
Demand for labour pushing up wages; high labour demand, particularly in service sectors, is increasing pressure on wage inflation according to the latest labour market study by the Recruitment and Employment Confederation and KPMG. They say that demand for labour is at a 27-month high and the proportion of recruiters indicating higher pay in December had “remained close to November’s 71-month high”. Income Data Services had previously reported that annual settlements to the three months ending 31st January had risen to their highest level for six years. However a later survey from the Chartered Institute of Personnel and Development says that more than half of employers expect to strike pay agreements worth less than 3.5 per cent in the spring pay round. Further information - Click here for The Recruitment Consultant, here for IDS Pay Report and here for CIPD Financial Times 07.02.07, Observer 11.02.07
Audit Office queries efficiency savings; barely a quarter of the £13.3bn gains the government claims to have made through its Gershon efficiency drive have definitely been achieved according to a review of the programme produced by the National Audit Office (NAO). In the case of half the apparent gains there were doubts about the way they were measured, whilst a further 23 per cent, £3.1bn worth, might represent efficiency gains but this could not be demonstrated. Sir John Bourn, head of the NAO, said: “Many reported efficiency gains still carry a significant risk of inaccuracy”. Some have been reported without taking all the costs into account. For example, a genuine £300m saving at the Department of Work and Pensions from paying benefits electronically disregards the £164m cost of running the Post Office card account, which allows some of these payments to be made. The NAO is calling for more transparency over progress as responsibility is transferred from the Office for Government Commerce to the Treasury. Further information - Click here Financial Times 08.02.07
MPs attack Small Business Service; a report from the Public Accounts Committee (PAC) claims that the Small Business Service (SBS) only has “limited” influence on government departments despite Department of Trade and Industry (DTI) claims that its position within Whitehall enables it to promote the small business case. They also attack the government’s action plans for small firms as lacking “accountability as it does not identify what bodies are responsible for which actions or the scale of change required”. The PAC does concede that the SBS is seen as a reliable source of data. In 2006 a survey by the British Chambers of Commerce said that 83 per cent of firms believed that the SBS had failed to help improve the UK’s enterprise culture. A DTI spokesman said that the moves to streamline the SBS would help improve its performance. “The SBS will now be a smaller, more sharply-focused policy unit with the DTI, working to create the conditions for business success”. Further information - Click here Regeneration 09.02.07
People not aware of UK brain drain; commenting on US comments that they risk losing key scientists because of restrictions on stem cell research, Professor Andrew Oswald of Warwick University writes to the FT to point out that 56 per cent of all UK-born elite scientists currently live abroad. He also points out that American scientists won all the 2006 Nobel prizes in natural sciences. Financial Times 05.02.07
Spinouts ‘hindered’ by tax regime; a report by Angle, a company set up to help universities exploit their intellectual property, says that a confused tax regime is hindering government efforts to encourage universities to turn their research and discoveries into money-making products and services. In particular executives complain that the tax rules make it difficult to offer incentives to potential top staff. Andrew Newland (pictured right), chief executive of Angle, also disputed that lack of early-stage finance for university spinouts was the biggest hurdle to successfully commercialising research. He said that the biggest problem was not the equity gap but the management gap - “the missing link is people who can combine an understanding of science with a real understanding of business and product development”. Further information - Click here Financial Times 02.02.07
Politicians pay homage to social enterprise; Patrick Butler (pictured left) reviews the one-day Social Enterprise Coalition annual conference where, he says, no less than four ministers and the chairman of the Conservative party policy review turned up to pay homage and pledge allegiance. It was a clear sign that social enterprise has arrived - although it was clear that the politicians, like most of the rest of us, only have a hazy idea of what its wider impact might be. Ministers came with the usual blandishments including the Department of Health’s £73m fund to pump-prime social business start-ups in health and social care, the Department for Education and Skills declaration that social business would be taught in schools; and the Cabinet Office saying that it would seek ways to promote private sector investment into the sector. Oliver Letwin apologised for the abject failure of “trickle-down” freemarket capitalist economics of the Thatcher era, but instead of using the third sector to attack the bureaucratic drones of the public sector, he used it to chastise the greed and ethical dysfunctionality of the private sector. Guardian 06.02.07
DTI rejects accusations of spin over women entrepreneurs; the Department of Trade and Industry (DTI) has been fighting back against the sceptical response that has greeted a ministerial promise to kick start a “new women’s movement” by recruiting an “army” of businesswomen to promote entrepreneurship. Margaret Hodge (pictured above), the industry minister, told a Brighton conference that she was launching a drive to recruit 1,000 volunteers to act as a network of female entrepreneurs - an “army of businesswomen activists”. The initiative would be funded from existing budgets for regional development agencies (RDAs) and business support rather than being allocated new funds. Each RDA is being given a target of recruiting at least 100 women entrepreneurs to act as mentors. The Tories attacked the lack of dedicated funding, which, according to Mark Prisk, the shadow industry minister, “suggests that this announcement might have more spin than substance”. DTI officials said that research showed that women were inspired to start their own businesses by the example of other women. David Frost of the British Chambers of Commerce said the DTI was not necessarily directing its efforts at the best target. “There’s a very substantial number of businesses started by women…the issue now is not female entrepreneurs, it’s more in disadvantaged parts of the UK about a lack of entrepreneurship, full stop”. The Federation of Small Business said that “the lack of women on boards and senior women employees is more of an issue”. Further information - Click here Financial Times 08.02.07
Firms told to cut CO² or leave FTSE4Good; companies wanting to demonstrate corporate social responsibility by being a member of the FTSE4Good stock market index have been told that they will have to deliver a 2.5 per cent per annum reduction in carbon emissions and publish specific climate-change policies for which their boards must take responsibility. About a quarter of the energy-intensive users in the current index, such as oil companies, airlines and mining companies are heading for removal unless they change their ways. US companies look to be under particular threat under the criteria, which were launched at Canary Wharf with David Miliband (pictured left), the environment secretary, as the guest speaker. He said, “it used to be accepted that we cannot afford to be green. Now the opposite is true: we cannot afford not to be”. Craig Morrison, head of business ethics at Glasgow Caledonian University and a member of the FTSE4Good committee, said that some companies were working very hard to reduce their carbon footprint but “incredibly” some were failing badly and letting their pollutions levels rise. He accepted that 2.5 per cent was not a lot to ask but “We could have made it five per cent, but quite honestly it would have decimated the index-removing 60 or 70 per cent of the constituents”. Further information - Click here for FTSE and here for Defra Guardian 06.02.07
Guardian says that FTSE4Good should have been bolder; Julia Finch examines the FTSE4Good announcement and says that when the index was launched five years ago the idea was to provide a “clean list” for investors who wanted to put their cash into businesses with a sense of responsibility. Companies would strive to be included - and hence clean up their acts. Some 250 new companies have been admitted after meeting the requirements, and about 100 have been evicted for failing to do so. Now the FTSE is further tightening the criteria with the main demand being that they cut carbon emissions by 2.5 per cent a year. It can only be applauded - and the track record so far suggests that companies do make changes to be included. But a 2.5 per cent cut seems to lack ambition. BT has a plan for cuts of 65 per cent in its corporate carbon output; Tesco has pledged to cut emissions by 50 per cent and HSBC, Marks and Spencer and others have targets to become carbon neutral. The Stern review said that stabilising carbon levels requires emissions to be cut by at least 25 per cent. FTSE4Good maintains that demanding more than 2.5 per cent would have meant too many companies being booted out and that this is just a starting level. But the piece ends by asking “But surely when every day brings ever more lurid headlines of the damage carbon is doing, it could have made a bolder start? Guardian 06.02.07
The Times disagrees; James Harding says that the FTSE4Good instrument is blunt and clumsy. One size cannot fit all. For some companies a 2.5 per cent target is radically ambitious. The likes of British Airways and ICI will find it harder to reduce their carbon footprint than businesses such as ITV. If the FTSE4Good wants to improve corporate behaviour, it needs to be more rigorous in its understanding of the problem - and more demanding. Times 07.02.07
Devolved regions ‘would gain jobs’; a report produced by the Local Government Association says that one million extra jobs could be created and economic productivity increased if greater powers were devolved to the English regions. English towns and cities should not be allowed to fall behind London and would benefit from greater influence over infrastructure projects, economic development, the local labour market and planning. If every region raised its employment rate to that of the best, one million extra jobs would be created. Further information - Click here Financial Times 05.02.07
Respect areas are named; the forty Respect areas that will get extra resources to tackle anti-social behaviour have been named by the Home Office. Amongst the 40 English and Welsh councils that have been named are Leeds, Sheffield, Bolton, Birmingham, Liverpool, Manchester, Birmingham, Newcastle and Nottingham. In return for extra resources the councils will run family intervention projects to tackle nuisance neighbours and hold more classes for parents struggling with troublesome children. The Department for Education said that it would invest £6m for parenting classes. Further information - Click here Regeneration 26.01.07
BAA launches ‘cut-price’ runway for Stansted; BAA has launched plans that slash the price and environmental impact of a second runway for Stansted. The revised plan will reduce the amount of land needed by more than 20 per cent compared with earlier projections. It will also cut the cost by 0.3bn to £1.4bn, cut the number of buildings that would need to be demolished, and reduce the number of residents affected by noise from 10,000 to 5,800.The first phase would be delivered by 2015 and will deliver a runway and associated terminal facilities with a capacity of ten million passengers a year. The second phase would cost an extra £850m and increase passenger numbers by a further 23m by 2030. This would lift Stansted’s total capacity to 68m - the same as Heathrow today. The proposals met a hail of criticism both from the operators and the residents. Michael O’Leary, chief executive of Ryanair, dismissed it as a “gold-plated Taj Mahal”. Peter Sanders of Stop Stansted Expansion said that Ferrovial, the owners of BAA, were paying lip service to the environment and that the expansion would increase Stansted’s carbon dioxide emissions from five million to 12m a year. He also said that the expansion was opposed by all the local councils as well as the East of England Regional Assembly. Further information - Click here Independent 31.01.07
No 10 backs plan to force lone parents back to work; Downing Street is backing plans for an overhaul of the welfare state which would force single parents back into work much earlier, and make English lessons compulsory for people who cannot get jobs because of language difficulties. Officials are examining schemes in Germany and France where single parents with children as young as three are required to attend job interviews in order to qualify for benefits. At present British practice means lone parents do not have to attend interviews until their children reach 14. John Hutton (pictured above), the works and pensions secretary, is in Australia examining how church groups and the private sector are used to get people back into work and has talked of increasing the duties on a lone parent when children reach the age of 12. However some believe that the age could be dropped to three as childcare improves. The current employment rate among lone parents is 57 per cent, far behind other countries such as Sweden, where the figure is 80 per cent. Some of the plans are emerging from a government welfare review led by David Freud, a former investment banker, and due to be published by the Department of Work and Pensions in March. Freud has been tasked with examining the scope for increasing the proportion of people in employment from 75 per cent to 80 per cent which would result in public expenditure savings of £10bn a year. Freud is also looking at the use of the private and voluntary sectors in providing jobs, the scope for using private-sector capital and, changes to the benefits system to create the right incentives. Guardian 12.02.07, Times 12.02.07
Does the private sector have the answer? The use of private companies to help get a million more people off welfare benefits and into work is being planned by ministers. John Hutton points out that in the UK, private and voluntary providers manage to place roughly ten per cent more people into jobs in employment zones than the public sector-led New Deal does elsewhere. Private and voluntary firms are paid in relation to outcomes, including whether people are still in work after 13 weeks. However Hutton admits that Britain will face a challenge in getting four million into work in the face of the toughest spending round for a decade. Further information - Click here Times 12.02.06
English lessons to be compulsory for claimants; Jim Murphy, the welfare minister, has announced that benefit claimants who cannot speak English adequately will be required to take language lessons or lose benefit. He said, “Fifteen per cent of unemployed ethnic minorities cite language difficulties as a barrier to work. Potentially, that’s 40,000 people being denied the opportunity to work because they do not have the language skills to get a job”. Further information - Click here Guardian 12.02.07
Mental illness keeps 1m off work; the number of people out of work and on long-term sickness benefit has risen from 730,000 in 1997 to 1.1m now according to a parliamentary answer to Conservative questions. The number of claimants suffering severe stress has tripled to 49,000 while those who have suffered bouts of depression has almost doubled to 501,000. Those suffering alcohol or drug-related problems almost doubled to 137,000. The government has put plans to cut the numbers on incapacity benefits by one million at the heart of its drive on welfare reform. Under the Welfare Reform Bill before parliament, claimants could receive a reduced benefit if they failed to attend Jobcentre interviews or take part in rehabilitation or training schemes. David Ruffley (pictured above), shadow welfare minister, warned that the mentally ill could suffer if mental health services continued to be cut to meet cash pressures elsewhere in the National Health Service. The rising number of claimants suffering from mental disorders is seen as a reflection of a service-based economy. Many male manual workers made redundant from the heavy industries in the 1980s only to spend the rest of their working lives on long-term sickness benefits have reached pension age. Financial Times 01.02.07
Poll shows work-life difficulties; a poll of more than 2,000 people shows that 82 per cent believe that it is difficult for parents to balance work with home life. The poll, which was conducted for the Equal Opportunities Commission (EOC), also shows that seven in ten believe that the situation will be even worse in ten years’ time. Jenny Watson, the chair of the EOC, told the Smith Institute that unless the political parties complete the “unfinished social revolution” created by changes in family life and participation at work, the UK was risking a “serious breakdown in family and community life”. Further information – Click here Guardian 08.02.07
Minister calls for flexible work rights for all; writing in an Institute for Public Policy Research book to be published in the summer, Beverley Hughes (pictured left), the minister for children, calls for all workers to have the right to request to work part-time. Although she is the first minister to call publicly for a radical extension of part-time work the Times says that her views are widely supported across government. She says that the reason for the call is that there is a growing demand from people to work flexibly, “With more women at work, an ageing population and many people aspiring to volunteer or to further develop their skills, government and employers need to recognise that balancing work and life is an issue that’s not going away. We need a step change”. Susan Anderson, director of human resources policy at the CBI, said that extending the rights to all employees so soon after the extension to carers would risk jeopardising the policy’s success. She said, “Only by having a gradual and phased extension can we avoid firms being deluged under a sudden increase in requests”. The opposition from bodies such as the Federation of Small Business was stronger, saying that the realities of business were being ignored. Times 12.02.07
NHS could outsource 60 per cent of clerical jobs to India; Peter Coates, deputy director of finance at the Department of Health, has told a conference in Bombay that two thirds of NHS accounting and finance functions would be outsourced, with much of the work being done in India. In 2004 the NHS set up a joint venture with Xansa, a leading outsourcing company, which has since grown rapidly. So far 142 NHS Trusts are signed up. £15bn in payments are being processed each year, achieving savings of 32 per cent, according to the joint venture, NHS Shared Services. As well as cutting its back-office costs, the NHS benefits by getting half of the profits of the venture. Over the next decade £224m is planned to be diverted into frontline services. Times 09.02.07
Teenagers to be taught “life skills” in timetable shake-up; teenagers could be taught life skills such as birdwatching, cookery and financial literacy, as part of a shake-up of the secondary school curriculum proposed by the Qualifications and Curriculum Authority (QCA). The QCA review was ordered by ministers amid concern about the disaffection and dip in performance of pupils aged 11-14 in Key Stage 3. While emphasising that “the well-respected and well-regarded” pillars of the curriculum would be retained, Mick Waters, director of the QCA, said that there would be a new focus on personal and economic well-being alongside more flexibility to incorporate a “personalised” approach to learning. Teachers’ leaders welcomed a move designed to give them more professional freedom, but said timetabling could become a nightmare, particularly as secondary schools were facing the additional challenge of introducing new vocational diplomas for the 14-19 age range. Further information - Click here Guardian 06.02.07
Major decline in degree courses in science and languages; two reports from the University and College Union (UCU) give evidence of a dramatic decline in the provision of key science subjects and modern languages at UK universities. Comparing 2007 with 1997 chemistry is the worst hit with a drop of 31 per cent in the number of courses from 62 to 43. Physics has been cut by 14 per cent to 44 courses and maths has dropped by eight per cent. Only biology has increased, going up nine per cent to 70. In languages, German has suffered the most with a 25 per cent cut to 65 - with an even sharper cut in London - whilst French has dropped 15 per cent to 79. The union argues that languages have suffered since the government decided to make the subject voluntary after 14 - currently under review by Lord Dearing -, which UCU argues sent a signal to youngsters that it was not an important subject. Recent proposals for the secondary school curriculum suggest dropping European languages in favour of Mandarin and Urdu. Further information - Click here Independent 09.02.07
Brown’s ‘world-class ambition’ on school age; Gordon Brown has told a Microsoft Global Leaders’ Forum that the government’s commitment to life-long education should begin with the ‘world-class ambition’ of raising the education age to 18. He said that he was ready to introduce transitional arrangements for young people who had fallen through the net. These would include training opportunities, alongside tougher obligations, “including compulsion” to take part in education. Radical action was vital, because globalisation was creating a crisis of unskilled work. “0f 3.4m unskilled jobs today, by 2020 we will need only 600,000. So unless you have the skills you are at risk of being unemployed. Highly skilled jobs must and will replace lower skilled jobs. The 9m highly-skilled graduate jobs of today must become, by 2020, 14m: instead of 25 per cent of all jobs, 40 per cent of all jobs”. He said that he was ready to pilot work-focused programmes in 21 areas designed to motivate 5,000 young people most at risk of dropping out, as well as schemes that made out-of-education teenagers ready to come back into education. Further information – Click here Financial Times 01.02.07
Carbon emissions drop by 0.1 per cent in 2005; final figures for carbon emissions in 2005 have been released by the Department of Environment, Food and Rural Affairs (Defra) which show that overall emissions dropped by 0.1 per cent compared to 2004. Householders cut their emissions by 4.6 per cent but emissions from aircraft went up by seven per cent. The figures were released the day before the chancellor’s new tax on air passengers came into force. Further information - Click here Independent 01.02.07
Car industry forces EU climbdown; with the help of Angela Merkel (pictured right), the German chancellor, Europe’s car industry has scored a late victory in its battle to scale back tough new emissions standards and switch the focus of the campaign from cleaner engines to greener fuel. New legislation will force oil companies to blend expensive biofuel into petrol. Stavros Dimas, the EU environment commissioner, had wanted the car industry to introduce new technology and cleaner engines to meet a CO² emissions target of 120g/km by 2012. However it is now thought that he will accept a target of 130g/km, which would still be lower than Japan’s 138g/km target. Angela Merkel became involved because DaimlerChysler and BMW produce larger models with higher emissions. EU officials are now seeking to use greener fuels to try and make up the shortfall so that the target can be met. A fuel quality directive will require petrol to comprise at least five per cent ethanol from 2011, reaching ten per cent in 2020. The move is expected to save 500m tonnes of carbon by 2020 - almost three times that expected from including air transport in the EU’s emissions leading scheme. The car industry is still seeking leeway: “Even a 130g limit would be difficult,” said a spokesman. The industry looks almost certain to fail to fulfil its voluntary agreement to cut emissions to 140g/km by 2008. Further information - Click here Financial Times 31.01.07
Public unwilling to pay for cleaner cars; the car manufacturers point to a fundamental flaw in the EU plans to cut CO² emissions - the European public’s reluctance to pay extra for clean cars. They point to the failure of two previous models - the Volkswagen Lupo and Opel Corsa Eco - along with other low emission or electric vehicles such as the Mercedes A160 and the Renault Kangoo Electr’road. European car makers, most of whom operate on profit margins of barely three per cent, say they are working to cut emissions. However they query how the new rule could be enforced, while arguing for an “integrated” approach that would include new tax measures and greater state promotion of biofuels and emissions-reducing infrastructure, as in Japan. Industry analysts believe that the carmakers may be over-dramatising their case but they agree that the proposed legislation pays too little attention to consumer preferences. Hybrid cars have been slower to take off in Europe than in the US, where the Toyota Prius leads the field. A survey of 1,800 European consumers last year showed that 38 per cent said that they would not consider buying a hybrid vehicle at all and nearly all had strict limits on how much more they would pay. Further information - Click here Financial Times 31.01.07
EU considers ‘ecological’ crime laws; the FT has obtained a draft copy of a proposed EU directive, which would introduce prison sentences and hefty fines for a series of ‘green crimes’. The proposal is driven by the fact that some countries treat pollution and illegal dumping of waste more seriously than others, allowing criminals to exploit loopholes. The draft lists nine offences ranging from illegal dumping of waste to the unlawful “taking or damaging” wild flowers. The EU move, which is spearheaded by Stavros Dimas, the environment commissioner, follows an European Court of Justice ruling in 2005 which struck out an agreement between member states and ruled that environmental matters should be dealt with by harmonised procedures. In 2006 a European ship dumped toxic waste on the Ivory Coast killing ten people and making hundreds ill. The ship sailed from the Netherlands to Estonia before sailing to Africa. The Dutch government has launched a criminal probe, however in Spain and Greece it would not have been a criminal offence. It is thought that the proposal will provoke claims that Brussels is trampling over national sovereignty. Financial Times 07.02.07
Government plans to double flights over the UK; the Sunday Times says that it has got hold of a document from Nats, who manage the National Air Traffic Services, that aims to restructure Britain’s existing air corridors and add new ones in preparation for a doubling of the number of flights over the UK from 2.4m a year to almost 5m by 2030. The changes would include the creation of new flight paths and six new stacking areas where aircraft fly in circles while waiting for landing slots over north Essex, Suffolk, Kent, Dorset and the borders of Bedfordshire, Hertfordshire and Cambridgeshire. The article quotes one leading campaigner who says: “Last week the Intergovernmental Panel on Climate Change told us we had a minimum of ten years to start reducing greenhouse gases. The government promised to make reductions but all the time it has been planning the biggest aviation expansion the industry has ever seen”. The Sunday Times points out that Nats is implementing the expansion policy set out in the 2003 aviation white paper, which said that it wanted to see new runways at Stansted, Heathrow, Birmingham and Edinburgh as well as increased capacity at airports including Coventry, Doncaster, and Wolverhampton. Overall 40 airports were given the go-ahead to expand. In 2005 216 million passengers entered or left the UK; by 2030 that number is due to grow to 470 million a year. Sunday Times 11.02.07
Asda to remove packaging from fresh fruit; Asda is to remove all packaging from most fresh produce at two stores in the north of England. If buyers are not put off, the policy will be extended to all of the chain’s 316 stores. Further information - Click here Independent 01.02.07
Call for stores to be responsible for packaging; Norman Baker, the Lib Dem chair of the All-Party Environment Group has called for shops to be forced to provide containers for customers to dump packaging before leaving the store. He also wants a compulsory deposit scheme for plastic bags. Although some retailers such as Sainsburys and Tesco have announced schemes to reduce their use, up to 17bn carrier bags are handed out by shops every year. Independent 05.02.07
London, New York and Paris; many of the papers have run articles about London’s strengths in the wake of the McKinsey Report for the Mayor of New York as well as the sale of the world’s most expensive flat. Andreas Whittam-Smith of the Independent takes a slightly different line by using the London visit of Nicholas Sarkozy (pictured left), the French presidential candidate, to compare the virtues of the three cities. Sarkozy addressed 1,000 French people at a hall in the City where he pointed out that in terms of French population London has become the seventh largest French conurbation on a level with Rouen, Lille or Perpignan. Sarkozy told his mostly young audience that they were contributing to the dynamism of London and given it a vitality that Paris needs. Whittam-Smith says that where London has gained an advantage is in recruiting talented people. US concerns about terrorism is making it harder for non-US citizens to move to the US whereas France has the opposite difficulty. Talent is leaving to catch the next Eurostar to London. Property and transport may be more expensive, the health service less effective, but at least there are jobs to be had. And members of French ethnic groups who move to Britain think we are less racist than our neighbours across the channel. He asks whether the Americans and the French can make good their deficiencies, and whether we can refrain from damaging or dismantling what works well. On this last point he is optimistic in that Gordon Brown is clear about the need to foster the City. Independent 05.02.07
London is ‘crime capital of Europe’; Britain is one of the worst countries in Europe for burglary, assaults and hate crime according to the latest EU crime and safety survey. It ranks alongside Ireland, Estonia, the Netherlands, and Denmark where the chances of being a victim of crime are 30 per cent higher than the EU average. London is described as ‘the crime capital of Europe’, where the likelihood of being a victim of petty crime is greater than all other EU capitals and even New York. Further information - Click here Guardian 06.02.07
Income gap higher in London than rest of UK; the Women in London’s Economy report shows that men are paid 23 per cent more than women in London compared to a UK average of 17 per cent. The dominance of men in highly paid jobs, such as the City, increases the difference. In the top ten per cent of earners, the gap is 32 per cent. Women at the bottom end also suffer in London. Single mothers get £20 a week less income than the national average in spite of a higher cost of living. The findings have been published to mark a conference on the role of women in the London economy being hosted by the Mayor and attended by over 500 London businesswomen. Further information - Click here Financial Times 08.02.07
BA in Heathrow dogfight; BAA, the owner of Heathrow, is at loggerheads with British Airways, its biggest customer, after calling for landing charges to be doubled to pay for new terminals. The company, which is owned by the Spanish toll-roads operator Ferrovial, claims that proposals by the Civil Aviation Authority (CAA) to cut its allowed rate of return could jeopardise its ability to finance improvements at Heathrow in time for the 2012 Olympics. It has proposed to raise charges at Heathrow by 12.5 per cent a year in real terms compared to the 6.5 per cent annual increase allowed for the 2003-08 period. When the new terminal five opens in 2008, BAA plans to demolish the existing terminal two and build a new terminal called Heathrow East, which will house the airlines belonging to the Star Alliance. It is also proposing improvements to terminals three and four. It claims that the CAA has not factored in the costs of demolishing and rebuilding a terminal in the middle of Heathrow while handling over 70 million passengers. In December the Office for Fair Trading proposed that BAA should be referred to the Competition Commission - a decision that BAA has furiously rejected. Further information - Click here Independent 06.02.07
Loss of casino seen as major blow to Greenwich regeneration; the Guardian describes the decision to grant the super casino licence to Manchester as a bitter blow to the Millennium Dome. It says that of all the bids, the plan to site a super-casino next to Philip Anschutz’s controversial O² complex seemed to meet the government’s requirements: regeneration allied to a touch of glamour. The super-casino would have been part of the second phase of the O² masterplan, a development complex spanning 300,000 sq ft and billed as “Europe’s largest leisure and entertainment complex”. Supporters said that the project would have created 6,000 jobs. If Anschutz is forced to proceed without the casino there will still be a giant 20,000-seat events arena with food ands drink outlets, which is due to open in July. But the key features of phase two, the hotels and the shops, will be shelved. Phase two was due for completion by the end of 2008 but the real issue is the effect on the profitability of the whole project. Guardian 31.01.07
London becomes home for international football; on 6th February four international football matches were played in London on the same night - none involving England. Brazil played Portugal in front of over 60,000 fans at Arsenal’s Emirates Stadium, South Korea played Greece at Fulham’s Craven Cottage, Ghana played Nigeria at Brentford’s Griffin Park and Australia played Denmark at QPR’s Loftus Road. The Times says that the London games were all about convenience. With its good cosmopolitan make-up, good stadiums, cachet and international transport links London is a logical choice for nations whose players are based mostly in Europe. The only team so far unconvinced is England, who have not played in London since 2003. Times 07.02.07
Fortnum plans to open in New York; the Queen’s grocer, Fortnum & Mason, is in talks with Elad Properties, a Manhattan property developer, to open a food hall in New York’s glitzy Plaza Hotel which is currently undergoing a revamp which will turn many of the guest rooms into multimillion-dollar apartments. At present Fortnum has a small counter in Saks Fifth Avenue. Guardian 01.02.07
Investors buy majority of new London homes; according to figures released by the Greater London Authority just one in four of the 12,000 new homes built in London last year were bought by owner-occupiers. The research, carried out by London Development Research, reveals that 73 per cent of the 12,304 homes built in the year to June 2006 were bought by investors. More than half of these were for buy-to-let investors. Of the remaining 3,445, around half went to investment clubs or were held by developers to rent or used as second homes. Further information - Click here Estates Gazette 03.02.07
Benefits will outweigh the costs; speaking at the launch of the planning application for the 2012 Games Lord Coe (pictured right), chairman of the Organising Committee, urged the Treasury to focus on the benefits rather than the costs. Although he was anxious not to be sucked into the row about Olympic funding his comments came at a sensitive time. Two days earlier the Sunday Times had revealed that the Treasury was becoming increasingly unhappy about escalating costs. Ken Livingstone had informed the London Assembly that the total cost of the Games may well reach £5bn. There was also speculation that the increased funding would come from the Lottery as opposed to direct treasury funding. Livingstone has already promised Londoners that they would not have to pay more than 38p a week for 12 years. A new report quotes Whitehall sources as saying that the true cost of the Games is now £6.4bn, which comprises an overall cost of £4.1bn plus a contingency figure of over £1.5bn and a security bill of £0.8bn. It assumes that there will be no VAT bill. The Observer says that the infighting about who will pick up the extra costs is now so fraught that there will be no immediate announcements about the budget. A new favourite to be penalised is Ruth Kelly’s communities budget, which could top-slice funds for other regions. Sunday Times 04.02.07, Guardian 07.02.07, Observer 11.02.07
Olympics budget ensnared in spending round talks; the FT says that attempts to finalise a revised budget for the 2012 Games are being bogged down by negotiations about this summer’s tight spending round. A number of government departments are involved in talks to agree both the increase needed in the original £2.375bn budget and, crucially, how that overrun will be funded. But several other departments are affected by the overruns and some ministers are understood to be reluctant to agree to additional Olympic spending without a corresponding increase in their spending from 2008-9. The Department for Communities and Local Government is responsible for the regeneration of the Stratford site, the Department of Transport deals with issues such as the extension of the East London Line whilst the Home Office is responsible for security. There is broad agreement that the original figure of £190m is a very significant underestimate. Officials admit privately that security costs are proving “one of the hardest things to pin down”. This is strengthening the hand of Gordon Brown in arguing for a high level of contingency funding. Tessa Jowell, the culture secretary, is supporting the Olympic Delivery Authority’s proposal for a 30 per cent contingency but the Treasury wants 60 per cent, citing the costs of previous Olympics and the value of getting the “bad news” out of the way. Financial Times 12.02.07
IOC worries about effect of rising costs debate; senior figures in the International Olympic Committee (IOC) have been drawn into the debate about the costs of staging the London Games. Gilbert Felli (pictured right), one of the executive directors, was quoted by Reuters as wanting a special report detailing exact costs. He was speaking after Dennis Oswald, the IOC’s chief inspector, had given his progress report. Felli said: “Preparations are going very well and we have no concern. But we have asked our friends in London to present a breakdown of different aspects of the Olympic Park so we have better clarity”. Asked whether the speculation was damaging the image of the Olympics he said, “Yes, exactly”. The IOC moved quickly to defuse the situation by saying the request was quite normal and that it was commendable that London was having such a discussion so early. The full picture about the costs of the Games is not likely to emerge until the Treasury reports, an event expected in the next few weeks. In any case the members of the London Organising Committee for the Olympic games have stressed that the only costs that are changing are those relating to those parts of east London in the Olympic zone. They insist the actual costs of staging the Games have remained at about £2bn. The irony is that Felli’s initial comments were not far removed from the conclusions of a report into the planning for the Games produced by the National Audit Office. They said that continued uncertainty could hamper the regeneration efforts. Further information - Click here Guardian 09.02.07, Regeneration 09.02.07
Olympic planning application is submitted; the biggest planning application in British planning history has been submitted by the organisers of London 2012. The 15-volume, 10,000-page document sets out a blueprint for the Olympic Games venues and the following regeneration of east London’s Lea Valley. As well as covering the venues in its 2.5 sq km area, the application details highways, 24 bridges, walkways, river works, utilities and parks as well as five permanent sporting venues, three temporary arenas, and a broadcast and media centre. David Higgins, chief executive of the Olympic Delivery Authority, said the submission marked the end of the “planning phase” for the Olympics. Further information - Click here Financial Times 07.02.07, Estates Gazette 10.02.07
Lend Lease now thought to be ahead for Olympics contract; the Times contends that the Australian-owned property giant Lend Lease has surged ahead as the favourite to win the London Olympic house-building project worth hundreds of millions of pounds. The announcement, which is expected very shortly follows a sharp battle between Lend Lease in partnership with Bouygues, the French construction company and a rival group led by Barratt Development. The winners will have to build up to 5,000 homes, which will be subsequently sold. Observers have expressed concern over the quality of the homes that will be left. Both budget and time considerations mean that many of the houses will be pre-assembled offsite. The Lend Lease consortium also includes its UK construction arm, Bovis Lend Lease and its recently acquired house-building arm, Crosby Homes. It has also teamed up with First Base and East Thames Housing Group to help on the affordable housing. Times 09.02.07
London 2012 rule out West Ham as tenants of the stadium; the London Olympic Board have ruled out building the Olympic stadium in partnership with West Ham United. They said that their priority was to deliver the east London stadium on time and on budget and this could not be done with the involvement of a football club. The idea is for the stadium to continue as an athletics venue after the Games but with its capacity cut from 80,000 to around 20,000. The mayor told the Board Meeting that the London Development Agency (LDA) was now working with West Ham to explore the possibility of a new site in east London. One possibility is a site owned by the LDA next to West Ham underground station. Independent 08.02.07
Online tendering programme launched by ODA; the Olympic Delivery Authority (ODA) has launched one of the biggest online procurement programmes ever seen in the UK to enable companies to bid for contracts connected to the 2012 Games. There will up to 2,000 contracts listed at any one time ranging from building the main venues to logistical support, occupational health and landscaping. As well as the main “tier one” contracts that are signed directly with the ODA, the chosen contractors for the main venues will advertise supply chain contracts through the website. Further information - Click here Financial Times 09.02.07
Games offer deal to the energy companies; the ODA are in talks with leading energy companies to install and operate all of the energy needs of the Games at no cost, in return for allowing them to keep the assets and sell energy to future users on the sites. The move is the first step in securing private sector investment in the infrastructure for the Games. The original target was that £750m could be raised but it is now accepted that was too ambitious because of the tight timetable. Eight bids are being considered which will cover supplying and financing electrical, gas water, sewage and telecom installations as well as renewable energy, which the ODA has pledged will account for 20 per cent of the Games’ energy demands. Utility companies are being asked to build a wind turbine and a “green energy centre” comprising a combined gas-cooling and heating plant and bio-fuel powered boilers. Financial Times 08.02.07
BL finds tenant for speculative EC2 scheme; British Land has found its first tenant for its speculative Bishopsgate and Broadgate Tower scheme. Mayer Brown Rowe and Maw have agreed to a pre-let for a quarter of the space in the 822,000 sq ft scheme and will pay around £50 per sq ft. Estates Gazette 10.02.07
Planning permission sought for Middlesex Hospital site; a consortium of investors led by the CPC Group have applied to Westminster Council for planning permission for a £1bn scheme including 273 luxury apartments on the site of the old Middlesex Hospital in Fitzrovia. The eight-storey scheme is being overseen by Candy & Candy, the development managers for some of London’s most expensive flats and is designed by Make - led by Ken Shuttleworth, who was responsible for the Swiss Re Gherkin while at Foster & Partners. In addition to the apartments the scheme will include 350,000 sq ft of office space and community facilities built around a central garden courtyard. The old hospital’s grade 11 listed chapel is the only building that is being preserved. No prices have yet been given and Fitzrovia is off the usual list of haunts for the super-rich. Candy & Candy have made their names as purveyors of flats to the globe-trotting rich and are currently supervising the construction of a new block on the site of the former Bowater House in Knightsbridge. The most expensive flat there will be the penthouse, which has recently sold for £80m, making it the most expensive flat in the world. Financial Times 09.02.07
Multiplex and Tesco get go-ahead for Kensington Tower; Australian developer Multiplex has been given the go-ahead for its 27-storey residential development at 100 West Cromwell Road, after three years of consultation. The £200m project, which is a joint venture with Tesco, is one of the biggest developments of its kind in Kensington and Chelsea for at least three decades. The scheme will provide 433 flats, including 155 affordable homes. Estates Gazette 03.02.07
Mitsubishi wins £200m St Giles deal; Mitsubishi estates have been chosen by Legal & General as their funding partner for the Central St Giles scheme - a freehold island site next to Centre Point. Planning consent has already been obtained for 375,000sq ft of offices, 30,000 sq ft of shops and restaurants and 100 flats. Estates Gazette 03.02.07
Treasury Holdings to redesign Battersea; Treasury Holdings is to appoint a new masterplanner to draw up fresh designs for Battersea Power Station. Real Estate Opportunities, a subsidiary of Treasury Holdings, bought the 38-acre site from Hong Kong-based developer Parkview International for £400m last year, has shortlisted four practices to redraft the previous Arup-designed masterplan. Whereas the previous plan had gained consent for a 1.46 sq ft entertainment, leisure and retail scheme within the power station, alongside two hotels, 750 flats and 750,000 sq ft of offices and exhibition space, REO is likely to propose a residential-led scheme. Estates Gazette 10.02.07
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Next issue on 28th February 2007
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