Consumer inflation stays relatively steady at 2.1 per cent; in spite of higher food and energy costs, inflation as measured on the consumer price index (CPI) stayed steady in December at 2.1 per cent for the third month running- although it was slightly higher than analysts had expected and higher than the Bank’s own forecast of 1.9 per cent for the last quarter. Another piece of good news was that unemployment fell by 13,000 in December to 1.65m and the number of people claiming the Jobseeker’s Allowance fell by 6,400 to 807,700- the lowest number since 1975. At the same time the Retail Price Index fell to four per cent due to lower mortgage rates. However economists felt that the overshot would not deter policymakers from cutting interest rates in February, but they warned that inflation could rise further above target for much of 2008, limiting the pace and frequency of subsequent rate cuts. Michael Saunders, economist at Citigroup, said: “With various inflation worries- the likely near-term pick up in CPI inflation, the high level of inflation expectations, cost pressure from commodities and perhaps pay, plus the weak pound- we expect that easing will be spread over the course of the year as weak economic data emerge, rather than frontloaded into the next few months”. Further information - CPI and Labour Market Statistics Guardian 16.01.08
Deputy Governor hints at near-term rate cut; speaking to the London Chamber of Commerce Sir John Grieve, the deputy Governor of the Bank of England, hinted that interest rates would need to come down in the coming months to protect the economy from turmoil in the financial markets. He said that the Monetary Policy Committee (MPC) faced difficult decisions owning to inflationary pressures in the economy from higher food and energy prices. However he said that the evidence from the surveys on the health of the economy might “justify a progressive change in policy”. He said that the case for easing borrowing costs “had been greatly strengthened by the disruption of global credit markets, and in our banking system, which brings a risk of deeper downturn”. City economists took Grieve’s comments as evidence that he voted for an interest rate cut earlier this month, when the MPC left borrowing costs unchanged at 5.5 per cent. Further information Guardian 18.01.08
RICS says housing market closest to slump for 15 years; the latest survey of prospects in the housing market compiled by the Royal Institute of Chartered Surveyors (RICS) says that house prices across the UK fell in December at a faster pace in more than 15 years as tighter mortgage lending and higher interest rates pushed the property market closer to the biggest crash since the early 1990s. The survey offers the bleakest picture since November 1992, when the UK last saw a severe slump in the housing market as properties shed almost 30 per cent in value. Price falls were seen across the country with East Anglia and the West Midlands showing the heaviest decreases. Only surveyors in Scotland reported some subdued price rises. Even in London, surveyors said the outlook for 2008 was not promising. Further information Guardian 16.01.08
UK economy falls behind France; the size of the British economy has fallen behind that of France for the first time since 1999 due to the slide in the value of the pound. Sterling’s rapid fall to 11-year lows against European currencies has also pushed the UK to sixth place in the world behind the US, Japan, Germany, China and France. According to Martin Weale, director of the National Institute for Economic and Social Research, the figures represent a “political economic cataclysm”. He said that although the change in rank had no immediate effect on UK living standards and the UK still has a slightly higher gross domestic product per head, the falling exchange rate would crimp income growth compared to overall growth in economic output. Financial Times 12.01.08
Risk and Regulation Advisory Committee is launched; the prime minister has unveiled a new independent watchdog whose mission will be to encourage Whitehall departments to be less risk averse when making policy. The prime minister says he wants ministers and officials to avoid reacting to events by introducing onerous regulations with unintended consequences. The seven-man committee will replace the Better Regulation Commission whose chairman, Rick Haythornthwaite, will become chairman of the new body. He will be the only private sector member, with others coming from the public and voluntary sectors. The first task of the new body will be to look into the superbug scares, where Mr Brown’s pledge of a £50m “deep clean” of hospitals has been criticised as “an empty gesture” and “political gimmickry”. Further information Financial Times 16.01.08
FTSE 350 ‘slow’ on corporate governance; a survey by Grant Thornton says that only four in ten of the FTSE 350 companies claim full compliance within the UK’s Combined Code - with only 11 of the 125 fulfilling all the disclosure requirements. However the number of companies aspiring to fully comply has risen from 34 per cent in 2006 to 41 per cent in 2007. On the positive side 110 companies that did not claim full compliance provided robust explanations. However four per cent gave no explanation and 34 per cent only a minimum, suggesting says Simon Lowe, head of business risk services at Grant Thornton, that they “may need to revisit their attitude towards the principles of governance”. Disclosure on corporate responsibility reporting moved up the agenda, rising from eight per cent to 42 per cent. Further information Financial Times 21.01.08
Using the power of Davos to tackle world poverty; as the world’s leaders descend on Davos for the 2008 World Economic Forum (23rd -27th January) the Times interviews Indra Nooyi, the Indian-born chief executive of Pepsi-Cola. She talks of galvanising “the power of Davos” into attempting to solve world poverty. “There is a tremendous amount of power in Davos. It needs to be put to work. The NGOs, governments, companies - in partnership - we can move towards some action to improve society”. She has already met Gordon Brown a number of times to discuss how the muscle of global corporations can be used to help the poor. “The developed world cannot stand by and watch”. Further information Times 21.01.08
M&S offers £5 for clothes given to Oxfam; Marks and Spencer have launched a clothes recycling scheme with Oxfam where individuals who donate unwanted clothes to Oxfam will receive a £5 M&S voucher in return. One of the aims of the scheme is to try and reduce the 1m tones of clothing sent to landfill each year. The vouchers will be valid for one month against purchases of £35 or more of purchases of M&S clothing, homeware or beauty products. The clothes exchange will run for six months from 28th January and will cover 790 branches of Oxfam across the UK and the Republic of Ireland. Further information Guardian 15.01.08
Volunteering drive ‘has done little’; the substantial amount of public money spent on promoting volunteering has failed to produce any reaction according to a study compiled by NFP Synergy think-tank. Between 2001 and 2003 the proportion of adults who volunteer had risen by four per cent, but since then it has “hovered” at around 19 per cent. The NFP says: “The biggest increase in volunteering was up until 2004 and after that volunteering levels have been static… Our research shows little evidence that government investment in volunteering is working”. It recommends better evaluation of how best to increase volunteering. A spokeswoman for the Office of the Third Sector said: “This report runs contrary to other evidence. We are already investing more than ever in encouraging volunteering and this is having an extremely positive impact right across the age range.” Further information Regeneration 18.01.08
Manchester is the UK’s most unequal city; using a range of measures of deprivation compiled by the Department for Communities and Local Government, including crime, unemployment and education, the Centre for Cities has produced a report, which shows that many of England’s traditional industrial cities, such as Liverpool and Newcastle are sharply economically divided. It finds that Manchester is England’s most unequal city, despite more than a decade of urban regeneration. In Stockport, on the affluent southern side of Greater Manchester, the employment rate is above 80 per cent, whereas in the centre of Manchester, it is 65 per cent. Other cities where there are marked contrasts are Greater Birmingham where 37 per cent are not in employment compared to 21 per cent in neighbouring Solihull, and Greater London where 47 per cent of people of working age in Tower Hamlets are out of work compared to 21 per cent in Sutton. Further information Observer 13.01.08
New planning rules emphasise job creation; new planning rules published by the Department for Communities and Local Government for consultation call for planning strategies to take account of job creation. Planning Policy Statement 4 on economic development proposes that planners should undertake assessments of their local area to ensure that planning strategies address economic needs. It also urges councils to avoid designating sites for single or restricted use in order to allow plans to adapt to changes in the economy. Further information - Communities and Local Government Regeneration 04.01.08
Thames Gateway- ‘gateway to a maze of utter frustration’; Professor Sir Peter Hall examines what caused the resignation of Judith Armitt as chief executive of Thames Gateway shortly before Christmas. He recalls the background to Michael Hesseltine’s creation of the London Docklands Development Corporation, which was set up to “do things” after he found that “there were all kinds of committees, reports, discussions, but beneath me stretched this appalling proof that no-one was doing anything effective”. Sir Peter says that thirty years on, the Thames Gateway scheme has become a parody of London Docklands circa 1978. An Audit Commission report last summer tried to make sense of the decision structure: 30 overlapping agencies struggling for ascendancy. They told John Prescott to simplify the Gateway’s structure. Instead, he appointed Judith Armitt as Gateway chief executive although at the time John Gummer observed that a chief executive normally had a body of which to be chief executive. To celebrate Gateway’s 20th birthday in 2011, might a single executive agency, with one overall strategic plan, committed to delivery be launched? Even Hesseltine backed away from this but, without it, the desperately needed homes may not be able to be delivered. Regeneration 04.01.08
New Quango to takeover Thames Gateway; the government has given control of the Thames Gateway to the new regeneration quango, the Homes and Communities Agency (HCA). It will have the task of co-ordinating the long-delayed development of the 20,000-acre expanse. The HCA will take over the running of the Thames Gateway Delivery Unit from ex chief executive Judith Armitt. However the HCA, which brings together English Partnerships, the Housing Corporation and the delivery function of the Department for Communities and Local Government (DCLG), will not be formed until April 2009 bringing fears that the project will be left rudderless for more than a year. The DCLG said that Joe Montgomery, the director-general of regions and communities, would take forward the Thames Gateway delivery plan until the HCA is formed. Sir Bob Kerslake, former chief executive of Sheffield, has been appointed to chair the HCA. Estates Gazette 12.01.08
Delays and better rail services hit air travel; the annual statistical report of the Civil Aviation Authority (CAA) reveals that improvements to long distance rail travel combined with delays at airports have dramatically slowed the growth in air passenger numbers. While budget airlines continued to attract new customers at a rate of 10 per cent a year; the number of people taking charter flights was now falling. Domestic airtravel fell by 1.4 per cent in the past year while international holiday flights, which now account for a third of all air journeys, are growing at just 0.2 per cent. The opening of St Pancras has helped cement Eurostar as the preferred route to the continent. Meanwhile, despite the chaotic scenes at New Year, the upgrade of the West Coast Main Line has continued to attract customers, as has the East Coast Main Line. Domestic air services have been forced to reduce capacity. More than one billion passengers used the railways in 2006 and that number growing by between five and six per cent in 2007. Further information Independent 12.01.08
Capital gains reform decision could come soon; the FT quotes “a source close to the Treasury” saying that there is no substance to the growing speculation that the chancellor will wait another year to carry out a longer consultation about reform of capital gains tax (CGT). Entrepreneurs have been up in arms about the plans to increase CGT on the sale of businesses from 10 to 18 per cent, in effect an 80 per cent rise. Equally many of the small business lobbying bodies such as the CBI and the FSB have been complaining hat they have not heard from the Treasury since an initial period of consultation in the week after the original October statement. But it is understood the government is going to stick to its promise to consult the business groups one more time before any changes are announced- a move thought to be very close. The changes to CGT are part of a wider package of business measures that will take effect at the start of the next financial year in April, including a cut to the headline rate of corporation tax. The FT’s source thinks it will be “odd” if that is not the case. Some modest concessions have already included an exemption for entrepreneurs entering retirement. However few business leaders expect a wholesale retreat from the plan for a single rate of CGT. Financial Times 19.01.08
‘Brown’s regime oversaw decline of small businesses’; the Conservative Party is expected to seize on a forthcoming report on small businesses which shows a deterioration in small businesses over the past decade. The report, compiled by the European School of Management (ESM) and to be published in February, says that the number of companies reaching an annual turnover of £1m five years after creation has halved under the current government, from 29 per cent in 1996 to 16 per cent in 2006. At the same time the number of firms that have a turnover of more than £7m five years after they were set up is, at 6.8 per cent, much lower than the European average of 16 per cent. Professor Davide Sola, the report’s author, said: “The tax system for small businesses in the UK is becoming less competitive. The changes to capital gains tax in the 2007 pre-budget report will further undermine the attractiveness of the UK as a place to grow a business”. The ESM report looks at ten years of data on the quality and speed of growth of new firms as a better guide for entrepreneurship than the number of companies starting up. Professor Sola said that his report would include policy measures on how companies can grow, although many do not consider doing this because of the regulatory burdens. Further information Independent on Sunday 13.01.08
Internet shopping doubled last year; internet shopping accounted for 15 per cent of all retail spending in 2007 according to the e-retail sales index released by the Interactive Media in Retail Group and analysts Capgemini. UK internet shopping soared to a record £46.6bn in 2007- a 54 per cent increase over 2006. This was more than double the British Retail Consortium’s data, which said that online spending accounted for six per cent of retail spending. Further information Guardian 18.01.08
Business plans ‘are redundant’; learning how to write the perfect business might be a waste of time, according to two professors at Babson College - one of the premier centres for enterprise teaching and development in the US. Julian Lange and William Bygrave surveyed Babson graduates who went on to start their own businesses and found the performance of these ventures was unaffected by whether or not they had written a business plan before launch. Further information Financial Times 12.01.08
New class of super-affluent Britons emerging; a new study – Racing Away? income inequality and the evolution of high incomes by the Institute for Fiscal Studies (IFS) says that a new class of super-affluent Britons is emerging who earn more than £350,000 a year - and are seemingly impervious to redistributive taxes and only see their incomes fall during periods of extended stock market gloom. The IFS estimates that the “very, very rich” (the top 0.1 per cent of the population) total about 47,000 and mostly live in London and the south east, working in finance, property or law. They are 90 per cent male and more than half are aged between 45 and 54. They have an average pre-tax income of £780,000 a year. Further information Times 18.01.08
‘Britain’s hairdressers are renowned as the best in the world’; the Guardian questions why Britain’s hairdressers are regarded as best in the world but remain as the unsung heroes of fashion. The Work Foundation recently identified the three iconic jobs in 21st century Britain as hairdressers, celebrities and management consultants. In that order. In fact hairdressing is a remarkable business. It has grown by 80 per cent in the UK over the past 10 years, and currently turns over £5bn a year. British women have their hair done more often, and spend on average 20 per cent more doing so, than women anywhere else in the world. The big three multinationals, Wella, L’Oréal and Schwarzkopf, all agree that London is their leading market and, by common consent, Britain’s top hairdressers are the best there are. Another reason for the success is given as British women’s willingness to experiment. The success of British hairdressing is attributed by Caroline Cox, visiting professor at the London College of Fashion to Vidal Sassoon who not only changed the styles that were used but set up a network of academies to train hairdressers. These were copied by other leading hairdressers and thus, according to Cox: “This is the Harvard of hair. People come from literally anywhere to train here, from a short course costing a few hundred pounds to a masters course with the international creative director”. At the trade show, Salon International, Sassoon’s show attracts 2,000 hairdressers paying £150 a head. Guardian 09.01.08
Fewer Britons in work due to ageing population and emigration; a new study on the economic impact of migration by the Institute for Public Policy Research (IPPR) throws new light on Gordon Brown’s promise to create “British jobs for British workers” and the introduction of a new points-based immigration system from April. Dr Dhananjayan Sriskandarajah of the IPPR told the House of Lords economic affairs select committee that there had been a lot of talk of migrant workers taking British jobs but the evidence suggested that, due to an ageing population and high emigration, the British working-age population had shrunk by 272,000 over the past year. At the same time the number of UK-born people in jobs dropped by 230,000. The IPPR said this suggested that it was demographic changes in the UK-born population rather than the arrival of immigrants that was driving the reduction in the number of British-born people in jobs. In fact the proportion of UK-born people in employment had remained constant at 75 per cent over the past decade. The IPPR also draw attention to the tax implications of restricting immigration. With high migration there will be 473 retired people to every 1,000 of working age by 2074 whereas without immigration the ratio changes to 587 retired people to every 1,000 people of working age. Further information Guardian 09.01.08
Getting jobs in the City; SocietyGuardian writes up the work of Fresh Futures in Financial Services, which has helped hundreds of young people in Tower Hamlets to get a foot in the door of the financial sector by offering work experience placements, mentoring, training and guidance. The project, which is led by Tower Hamlets College, is funded by Equal, a European Social Fund community initiative that provides funds to projects focusing on tackling inequalities in the labour market, but local businesses that have seen the effect of the scheme are now providing half the funding. The project is about to be absorbed into the new National Skills Academy for Financial Services across the road from the college. Further information - Tower Hamlets College and National Skills Academy Financial Services Guardian 16.01.08
Civil Engineers warn about added costs from skills shortage; lack of government co-ordination and a shortage of skills are likely to add £8bn a year to the costs of construction and civil engineering projects by 2015 according to a report issued by the Institution of Civil Engineers (ICE). ICE calls for a new infrastructure planning commission (independent of Whitehall) which can smooth out the planning of big projects such as transport links and water treatment facilities. ICE says that poor performance by government in co-ordinating big projects - often making cuts in spending to meet public borrowing requirements, even when new schemes are necessary on environmental or economic grounds - has a consequent negative influence on the whole of the civil engineering industry. For example the budget for flood defences has been cut and then increased on three occasions in the last decade. The study also calls on companies and the education sector to do more to make civil engineering attractive to young people. It says that civil engineering employers have been unable to attract and retain skilled staff in sufficient numbers, or to diversify their workforce. The uncertainty over future demand for their services has, for many inhibited investment in the kind of training and work-life balance measures that are now part-and-parcel of employee packages in other professions. The report doubts that in the long-term the gaps can be met with imported labour. As soon as demand increases elsewhere in the world, as it is now doing, the workforce will start to dry up. Further information Financial Times 17.01.08
Jobs for the over 50s helps employment figures; the surprising news that despite the credit crunch there was a rise in the employment figures for the three months to November 2007 was largely due to the fact that of the 175,000 new jobs created over the quarter, 90,000 went to the over 50s. The return to the labour market of those who had been economically inactive also explains why unemployment only fell by 13,000 in the same period although the jobless rate fell by 0.1 per cent to 5.3 per cent. Further information Guardian 17.01.08
Chinese University to partner UK comprehensive school; the 1,000-pupil South Wolds community school in Nottingham is going into partnership with Nottingham University and its sister university in Shanghai, the Chinese Ningbo University, to form a new trust school. The Chinese Ningbo University is a subsidiary of the University of Nottingham and was set up to cope with the growing demand of Chinese students studying for UK-style degrees. Six Chinese students will spend two years in Nottingham studying A-levels or the International Baccalaureate as a prelude to studying for a degree at Nottingham University. The school hopes to arrange a similar exchange for its own students or work experience in China, plus regular staff exchanges. In addition, South Wolds - a specialist language college, which already recruits international students from Germany, Japan and the US into its sixth form - is planning to put Mandarin on the timetable from September. South Wolds will have two other partners- the British Geological Society and Skillsforce. Ministers are keen on secondary schools developing partnerships with universities and businesses so they can use their expertise to develop the curriculum and what is on offer for pupils. So far 30 have been established with a further 170 working towards becoming trust schools. Further information Independent 14.01.08
Worries about geography teaching; Ofsted, the schools watchdog, has warned that geography teaching is not doing enough to help schoolchildren “find their feet as global citizens of the 21st century” because too much teaching is “mediocre”. Ofsted is concerned that despite issues such as climate change the number of pupils studying the subject to GCSE continues to fall. Both the Association of Graduate Recruiters and the Chartered Institute of Personnel and Development said that Ofsted’s concerns were shared by employers whose candidates “can’t even find their way around Britain”. The Department for Children, Schools and Families set up an Action Plan for Geography in 2006 which includes a website to help teachers with ideas. Whitehall is also piloting a new geography GCSE with fresh material, such as climate change. Rita Gardner, director of the Royal Geographical Society, one of the organisations charged with implementing the plan, predicted, “sustained improvement after four or five years”. Ofsted also expressed concern that health and safety issues were reducing the amount and effectiveness of geography fieldwork. Further information - Ofsted and Geography Teaching Today Financial Times 17.01.08
Row develops about the role of the independent schools; just as the long-awaited guidelines for independent schools on charitable status was published by the Charity Commissioners various other issues were thrown up. Anthony Seldon, head of Wellington College, called on the independent schools not to use bursaries to siphon off top state school pupils and thus perpetuate what he called “educational apartheid”. He called on the independent schools to do more to assist schools in the state sector, a view echoed by Lord Adonis, the schools minister, who issued a prospectus on how high-flying schools could become involved in creating specialist or trust schools (Wellington College is to establish its own academy in east Wiltshire). The Charity Commission’s report provides guidance on what charities must do to meet the new public benefit test contained in the Charities Act 2006 which orders all charities - including for the first time fee-paying educational and religious organisations - to justify their status. The Commission makes clear that private schools will only pass the test by providing education and other school-related services to children who cannot afford their fees. Further information - GNN and DfES Guardian 16.01.08
Desperate times for adult educators; Alan Tuckett, the director of National Institute for Adult Continuing Education (Niace) writes in the Guardian about the increasingly desperate times being faced by adult educators. The latest figures from the Learning and Skills Council (LSC) show a drop of 1.4m adult learners from publicly funded education in just two years, and provision for the over 40s has been decimated. However he says that it is rare for a secretary of state to take such a great interest in adult learning that has been shown by John Denham, who is launching a review of community-based adult learning. A review is needed, as there is scarcely any other area where policy has been as unstable as adult learning. In the past 20 years there have been 15 different junior ministers in post and 15 different civil servants overseeing adult education. The Labour government started with a commitment to widening participation and the LSC was charged with securing a rich variety of adult programmes. The Skills Strategy of 2003 reversed many of these gains as emphasis was given to work-based learning. These changes have led to a dramatic reduction in adult participation in LSC-funded provision. Yet there has been no parallel drop in the numbers reporting current or recent participation in learning in the national participation surveys. It seems clear that many people displaced from college classes made their own arrangements to carry on. Tuckett argues that self-help, welcome though it is, cannot replace the public obligation to ensure that people who have not benefited from earlier education get the chance to join in later. Further information Guardian 15.01.08
Drive to cut aviation emissions by 10 per cent by 2020; the national air traffic controller, Nats, has pledged to reduce the amount of carbon dioxide generated in British airspace by 10 per cent by 2020. The plan will affect the way that aircraft take off, fly and land. Meeting the benchmark will require new approach paths for airports, greater cooperation with neighbouring air traffic regimes and shorter delays on airport taxi-ways. Nats is responsible for guiding all civilian flights through British airspace and also handles air traffic control for Britain’s largest airports including Heathrow, Gatwick and Manchester. The aviation industry is under pressure to take action on emissions, with flights accounting for 1.6 per cent of the carbon dioxide emitted worldwide and 5.5 per cent of CO² generated in Britain. Its biggest defence has been the introduction of fuel-efficient planes such as the A380 superjumbo, but global passenger numbers are increasing at such a rate that CO² reductions are being wiped out by rising demand for flights. Paul Barron, the chief executive of Nats, says that Nats “doesn’t know” how it will deliver the 10 per cent cut, but proposals being discussed include holding aircraft longer at airport stands to free up crowded runways and asking other airspace users led by the Ministry of Defence to allow commercial aircraft into their space to avoid airliners having to swerve around military airspace. One of the most popular initiatives with the airlines is continuous descent approach, which enables aircraft to burn less fuel by using a smoother landing trajectory. Further information Guardian 17.01.08
Huge rise in road traffic; a written parliamentary answer has revealed that despite record fuel prices, higher vehicle taxes and general entreaties for greater use of public transport road traffic has risen sharply in the past decade in almost every part of England except inner London. The greatest rises have taken place in rural counties where drivers have taken advantage of spare road capacity. In London and the Home Counties the increases have been more modest but only because the roads were already full for most of the day. The figures show that road traffic rose by 12 per cent between 1997 and 2006. The biggest rise was in Northamptonshire, where traffic grew by 20 per cent. Cornwall, Durham, Gloucestershire, Lincolnshire, Northumberland and Somerset all recorded rises of 17 per cent. At the same time rail travel has grown by 40 per cent. The road traffic figures were achieved despite the fact that Britain has much lower levels of car ownership than other large European countries. There were 463 cars for every 1,000 Britons in 2004, compared with 581 in Italy, 550 in Germany and 503 in France. Times 17.01.08
B&Q to stop selling patio heaters; B&Q, the do-it-yourself chain, has announced that it is to stop selling patio heaters, as they are environmentally unsound. The heaters have grown in popularity, fuelled by the smoking ban, which has boosted outdoor seating in pubs and restaurants. Ownership is set to rise from 1.2m to 2.3m this year. However each heater can emit as much carbon dioxide as one and a half cars. B&Q will stop when the stocks of about 20,000 run out. Further information Financial Times 21.01.08
Time hails “Nylonkong” as one of the drivers of the global economy; Time hails the strength of three cities- Hong Kong, London and New York- as exemplars and explanations of globalisation. It gives them the combined name of Nylonkong and says that through their links of shared economic culture they have, by accident, created a financial network that has been able to lubricate the global economy, and, critically, ease the entry into the modern world of China, the giant child of our century. They have a shared heritage of adaptability having started as manufacturing centres, as well as having been- or in Hong Kong’s case still is- great ports, and then used their international trading skills to become financial centres. Their history as ports has also made them cities of immigrants. New York has long been thought of but so, increasingly is London. The 2006 London Labour Force Survey found that 31 per cent of the city’s residents had been born outside Britain compared with 34 per cent of New Yorkers. Modern technology has made the links closer- there are 187 direct flights a week from London to New York - but has also seen property prices in all three cities become one of the major challenges with the danger of pricing out those people who make cities tick. Time 28.01.08
Warning about Livingstone housing “tax”; a report by residential research firm London Development Research says that landowners in London are paying an extra 30 per cent “tax” because of London mayor Ken Livingstone’s affordable housing requirements. The report, which looks at section 106 and affordable housing obligations in London, says that land values across the capital are being depressed by £2.12bn. If the costs incurred via extra s106 agreements are taken into account, the sum rises to £2.29bn, one-third of the £7.58bn that the land would be worth if it included no affordable housing. Estates Gazette 12.01.08
West End theatres have a record year; boosted by viewers of reality TV shows such as Any Dream Will Do London’s West End theatres have had a record year with audiences rising by more than 10 per cent to 13.6m. Musicals were disproportionately responsible for the increase with ticket sales up by 19 per cent compared to straight plays, which went up by one per cent, and dance and opera, which went down by eight per cent. The figures make a dramatic change from 2006, which scraped a 0.3 increase, when temperatures soared to record levels and Victorian and Edwardian theatres became ovens. Last year’s record sales were achieved in spite of the plunging dollar making London shows expensive for Americans. Further information Guardian 18.01.08
Camden to introduce cycle ‘stations’; with echoes of the Paris Velib scheme, a chain of cycle “stations” each with secure parking as well as shower and changing facilities. If it finds support from a public consultation the first cycle station is due to open in High Holborn in March, funded by a £200,000 grant from Transport for London in partnership with Camden Council and Holborn Business Partnership. The cycle station will be underground, taking up rooms below an existing block of offices and will be manned during office hours by a receptionist. Camden hopes that if it succeeds, the project will lead to a chain of similar stations across the capital. Laurie Baker, Camden’s transport planning team manager, said: “The aim is to make life a little easier for commuters who already cycle to work and to attract more cyclists. One of the main deterrents stopping more people riding is the lack of facilities so we hope this will help, especially for workers whose employers do not provide them”. The new stations will be prominently signposted and will include 90 spaces where bicycles can be locked securely to steel “Sheffield” stands. At present only 1.5 per cent of all journeys in the capital are made by bicycle. However, there has been an 83 per cent rise in cycling in London since 2000. The consultation will end on 22nd February. Further information Evening Standard 15.01.08
Parliament Square to become pedestrianised piazza; London Mayor Ken Livingstone has commissioned the modernist Swiss designers Vogt Landscape Architects, the designers of the landscape around the Tate Modern, to rebuild Parliament Square. The aim is for the square to be transformed from a congested traffic island into a paved pedestrian piazza aimed at celebrating the history of British democracy in time for the 2012 Games. The new square is expected to become a major tourist attraction attracting more than 30m tourists a year. Early designs suggest that it will be pedestrianised in front of Westminster Abbey and the inaccessible lawn at its centre replaced with swaths of natural British stone and benches. The future of the eight listed statues, including Churchill and Mandela, is likely to become a major controversy. The designers want to create a space “free of clutter” whilst English Heritage insists that the statues should not be moved. The latest designs are being drawn up under close guard for fear of upsetting the delicate web of political sensitivities, which surround such a symbolic location. A senior planning officer described the £18m scheme as “possibly the most important landscape project in the world”. Further information Guardian 19.01.08
News International to leave Wapping; Jones Lang LaSalle are posting out details of News International’s 14-acre site at Wapping as the company decides on the new home for its newspaper interests. It is thought that the Wapping site is likely to be used for residential housing. Although News International is not saying anything about their destination the FT says that Canary Wharf is the front-runner with Waterloo still in the running. Financial Times 21.01.08
Falling property prices create £1bn black hole; a report for the London Development Agency (LDA) says that the Olympic budget faces a £1bn black hole because of the “ludicrous” property price projections backed by ministers that went into the revised budget that was agreed last year. At that time ministers moved to fill the shortfall by switching Lottery money away from the arts to the 2012 Games which is at the heart of the current furore with the Arts Council removing funding away from well-known theatres both in London and around the country. The new funding gap may need a further raid on the Lottery although ministers denied strongly that there would be any more calls on the Lottery. The memorandum on funding that was signed last year by Ken Livingstone and Tessa Jowell, the Olympics minister, stated that at least £1.8bn would be raised in land sales after the Games. This figure was based on a 16 per cent per annum increase in land prices in Stratford E15, over the next 15-20 years. The LDA now believes that £800m is a more realistic figure, leaving a £1bn shortfall. About £675m of this had been due to go to the National Lottery to repay the money lent to the Games. Some leading surveyors even queried the latest projection. Times 15.01.08
Mayor admits Olympic loan may not be repaid; speaking to the Select Committee on Culture, Media and Sport both Ken Livingstone and Tessa Jowell admitted that the £675m borrowed from the National Lottery for the 2012 Games might not be repaid if land sales from the Olympic Park fail to raise enough money. Neale Coleman, the mayor’s financial adviser, also suggested that the proportion of social housing required on Olympic land developments- set at 50 per cent- might have to fall to secure higher values. The Estates Gazette speculates that given the lack of social housing throughout the south east, coupled with the emphasis given to the legacy, that this is hardly likely to gain favour in Whitehall. They see the shortfall coming either direct from the public purse or through some form of land tax. Manny Lewis, chief executive of the London Development Agency, told the committee that discussions were taking place with three football and rugby clubs who are interested in moving into the Olympic stadium after the Games. Further information Times 16.01.08, Estates Gazette 19.01.08
Website aimed at helping SMEs win Olympic business; in order to help small companies who may be struggling to meet the qualification requirements for contracts for the 2012 Games the Olympic Delivery Authority have launched Competefor, a “business dating” website where companies of all sizes will be able to register as suppliers and compete for work. More than two-thirds of the 500 contractors who have already won Olympic contracts are SMEs according to the ODA. Half of these are based outside London. All businesses that register on the new website will be required to meet certain standards. However those who cannot meet the standards will be automatically redirected to their nearest Business Link for advice. Further information Financial Times 19.01.08
Australian developer to build Olympic flats; Australian shopping centre giant Westfield has signed a deal with another Australian developer Mirvac to build 1,224 flats at Westfield’s £1.5bn Stratford City development. Mirvac, which has a residential portfolio of 30,000 units in Australia, has been trying to break into the UK markets for more than a year. The rest of the housing within the 2012 Games Zone- 5,000 homes at the Olympic Village- will be developed by Lend Lease. The two companies also built the Olympic Village for the 2000 Sydney Games. Westfield is also looking for development partners for 1m sq ft of offices and two hotels. It will develop the 1.8m sq ft Westfield Stratford shopping centre, anchored by John Lewis and Marks & Spencer, itself. Further information Estates Gazette 19.01.08
New office development for Aldgate; the Beetham Organisation has won planning permission for cluster of crystal-shaped new buildings at Aldgate. The £700m Trinity development will house more than one million square feet of offices, shops, restaurants and public spaces. Due for completion in 2014, it will be located in three glass buildings, ranging from 12 to 24 storeys and linked by glazed canopies. Beetham say that the buildings, which have been designed by architects Foreign Office, will run on energy efficient technology. Aldgate bus station will be redeveloped and moved to improve connections with the Tube. Evening Standard 08.01.08
Developers pull out of Canning Town scheme; housebuilder Taylor Wimpey has announced that it will not be bidding for any work on the 7,000-home Canning Town and Custom House project, despite being a member of the Ecentral consortium. Their withdrawal follows that of Lend Lease, who was leading another consortia with First Base and East Thames Housing. Lend Lease said that they were pulling out to concentrate on the Olympic Village, which is also in the London borough of Newham. The other members of the Ecentral consortium, who include Laing O’Rourke, Development Securities and housing associations Family Mosaic and Genesis, said that they would definitely be bidding in the next round. First Base and East Thames Housing Association said that they would jointly submit a bid to join the panel. Further information Regeneration 11.01.08
Network Rail urges Smithfield conclusion; Network Rail has urged Thornfield and English Heritage to come to a speedy conclusion in their battle over the redevelopment of the General Market section of Smithfield Market. A public inquiry into Thornfield’s proposals is currently taking place. Network Rail wants to upgrade the Thameslink line that passes underneath the site in 2009. Estates Gazette 19.01.08
Westfield look at housing at White City; in addition to the Stratford shopping centre, the Australian shopping centre giant Westfield is also building the new 1.6m sq ft White City shopping centre, which is due to open later this year. Westfield has also bought 10 acres next door to the White City site where it plans to build a further 500,000 sq ft of shops and up to 1,000 homes. It has announced that it is in discussions with the BBC about creating a 100-acre regeneration scheme, which will be one of the largest regeneration schemes on the west side of London. “The vision is for a significant amount of residential” according to Michael Gutman, Westfield UK’s managing director. Estates Gazette 19.01.08
Qatari investors move into Shard of Glass; a Qatari bank is on the verge of buying two major stakeholdings in the Shard of Glass- the proposed 310m skyscraper over London Bridge station. They have bought one-third stakes from CLS Holdings and the reclusive property tycoon Simon Halebi. The new Qatari owners are expected to draw up a deal with Sellar Property Group, the privately owned British developer, which will give each side equal control but leave Sellar in charge of project development. It is thought that the skyscraper and the adjoining low-rise glass edifice could be worth £1.4bn if built and fully let. Site clearance work halted in September as the owners struggled to raise finance and CLS and Mr Halebi started talks to exit the project. The Shard was scheduled to be completed in 2011, but the timetable was put back last summer to at least 2012 as the credit crunch set in. despite concerns in the City that there will be a glut of un-let property over the next four years, developers are expected to build eight million sq ft of City offices between 2008 and 2012. Times 17.01.08
Unite wins more consents for student accommodation; student housing provider Unite has secured planning permission for its largest London development at Tottenham Hale. The 13-storey, 250,000 sq ft scheme will be built on a 1.5-acre disused industrial site and will comprise 687 bedrooms and 20,000 sq ft of ground floor shops. Unite has also gained permission for a £13m, 87-bedroom scheme in Highbury, N5. Both schemes are due for completion in 2009. Further information Estates Gazette 19.01.08
Ballymore to join the Vauxhall merry-go-round; Ballymore, the Irish developer, has joined in the property merry-go-round between Vauxhall and Battersea Power Station by acquiring a 21-acre site between the power station and New Covent Garden Market. It has appointed Foster & Partners to draw up a “high-density mixed-use” scheme that will rival the redevelopment of the power station and the 56-acre food and flower market. Plans will be submitted this year. Ballymore, which previously had tried to buy Battersea Power Station, has been assembling the landholding over the past 12 months. It comprises four adjoining industrial estates and lies at the heart of the Greater London Authority’s (GLA) 100-acre Vauxhall / Nine Elms Battersea Opportunity Area. The GLA is expected to encourage residential and commercial development by removing the site from its list of strategic industrial locations. Estates Gazette 12.01.08
Ballymore gets ready for revamp of Brentford High Street; following a four-year land assembly programme between Brentford High Street and the Grand Union Canal Irish developer Ballymore is about to lodge its plans for its 12-acre Brent Waterside scheme. Working in partnership with architect Building Design Partnership and after discussions with local residents groups, it is proposing a 1.4m sq ft housing led redevelopment which will include 1,136 homes, 75,000 sq ft of shops, 22,000 sq ft of restaurants and cafes, and 7,534 sq ft of leisure. The plans in part replace Brentford’s boatyard site, as well as a series of canalside depot sites. Further information Estates Gazette 19.01.08
Developers invited to tender for Founders Place; developers have been invited to tender for the £300m Founders Place scheme near Waterloo that will create accommodation for 400 NHS workers whilst regenerating a rundown part of central London. The scheme is notable in that it is one of biggest charity-led developments ever attempted in London. The scheme has been devised by Guy’s and St Thomas’ Charity and designed by Sir Terry Farrell. On a site facing St Thomas’s it will create 330 private apartments as a way of funding flats for nurses and other health workers. Further information Financial Times 16.01.08
Leicester Square to be revamped; Westminster City Council have launched a public consultation about their £18.5m plans to revamp Leicester Square. The makeover is intended to re-establish it as a “world-class destination” with a 200m white granite “ribbon” of seating and newly landscaped gardens. The nine streets that lead into the square will also be revamped. A new official ticket booth will be developed on the square’s south terrace. Consultation ends on 29th February. Work is due to start in the spring. Further information Estates Gazette 12.01.08
Estate revamp may de delayed; the London borough of Southwark has said that the regeneration of the Aylesbury Estate, one of Europe’s largest housing schemes, may have to be delayed because of government funding cuts. Nick Stanton, the leader of the Council, said that the below-inflation rise in its funding for the next three years equated to a cut of £4.8m for the next year alone. The council plans to demolish the estate (home to 7,500 people) and replace it with 2,200 homes to rent under housing association control and around 2,700 homes for sale or shared ownership. Regeneration 11.01.08
grapevine is produced twice monthly (except in August and December when there
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Next issue on 14th February 2008
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