Inflation figures alarm the City; although lower energy bills helped to push the level of inflation, as measured by the Consumer Price Index (CPI) down 0.1 to 2.4 per cent for the year to June the immediate City reaction was for a slip in share prices and Sterling’s rise to a 26-year high. Although inflation for the year to May was 2.5 per cent it has been running above the Bank of England’s target figure of 2.0 per cent since April 2006. The City’s concern lies with the “core” measure of inflation which strips out one-off and seasonal items from the CPI, excluding energy, alcohol, food and tobacco prices. On this measure inflation rose by a tenth of a point to 2.0 per cent, it’s highest since March 1997. It is this, which has left City economists convinced that a further quarter-point increase in interest rates will be imposed. Philip Shaw (pictured left), chief economist at Investec, said: “The figures are disappointing and leave open the risk of another interest rate increase sometime in the autumn. Karen Ward, UK economist at HSBC, added: “we believe strong sterling, and a slowdown in consumer spending, will be enough to contain inflationary pressures later in the year. But the Bank isn’t taking any risks, and will continue raising rates in the meantime. We expect another hike in September”. Further information - Click here Independent 18.07.07
Interest rates set to go even higher; a survey of leading economists predicts that UK interest rates are set to break through the six per cent threshold. Although several of those polled thought that rates had peaked, a significant number said 6.25 per cent or higher should not be ruled out. The Ernst & Young Item Club forecasts that the rate will move as soon as next month and remain at that level for some time. The likelihood of another lift in borrowing costs has increased after new data from the Office for National Statistics showed that the UK economy grew at a faster than expected rate in the second quarter of 2007. The ONS said that GDP rose by 0.8 per cent in the three months to June, the sixth consecutive quarter of above-average growth and ahead of analysts’ predictions of 0.7 per cent. The figures gave extra momentum to an already surging pound. Peter Spencer (pictured right) of the Item Club said: “With warnings of higher interest rates and financial problems round the corner, Item expects prudence to prevail”. He added that “people will simply have to learn” to curb their exposure to debt as soon as possible. Further information - Click here Independent on Sunday 22.07.07
Household tax payments have risen 10 per cent; household budgets are being squeezed by a twin pincer of tax and interest rate rises according to the Ernst & Young Item Club economic forecast, based on the Treasury’s own economic model. It says that household tax payments rose by 9.8 per cent in the year to the first quarter, far ahead of pay rises. Given this background it warns that “the Chancellor and the Monetary Policy Committee have to tread a careful line between keeping an eye on an over-exuberant City and a housing market that refuses to be damped down, without panicking into a series of damaging interest rate rises”. Peter Spencer, chief economist for the Item Club, warns: “The UK should be able to withstand a slowdown in the US and wobbles in its housing market. Currently these problems are US specific and should not spread. Our worry is that the buoyancy of the business and financial sectors will continue unabated, and that rates will need to be raised further to subdue this. If that happened the housing market and the high street will be very exposed.” Further information - Click here Independent 23.07.07
Public sector targets to be scrapped; Andy Burnham (pictured right), chief secretary to the Treasury, has announced that most of the 110 Whitehall-imposed priorities that have dominated the public sector for the past nine years will be abandoned. This will ease red tape affecting schools, hospitals and town halls. All that will remain are no more than 30 public service agreements, committing Whitehall departments to use their budgets over the three years to 2010/11 to achieve the government’s goals. The agreements will be monitored using indicators of national and local performance. A few- such as the progress towards meeting the pledge to cut maximum hospital waiting times to 18 weeks by the end of 2008- will remain as nationally set priorities with clear measurable objectives. But most will depend on local decisions by councils, NHS primary care trusts and other service chiefs to set targets reflecting local needs and priorities. Guardian 18.07.07
MPs seek rethink on relocation of Statistics Office; intense pressure on Britain’s national statistics office to make efficiency gains will put the quality of its statistics at risk according to a report by the Treasury select committee. The Labour-dominated committee urges the government to review the decision to relocate the Office for National Statistics from London to Newport, Wales “as a matter of urgency”. It feels the move has been “inadequately planned”. The MPs cite “evidence of a significant risk that the new Statistics Board will inherit an organisation unable to perform its tasks to the necessary standard because of structural weaknesses unless action is taken to alleviate some of the pressures on the ONS”. Further information - Click here Financial Times 23.07.07
UK wealth gap at 40-year high; research commissioned by the Joseph Rowntree Foundation shows that the gap between rich and poor in Britain today has reached its highest level for more than 40 years. During the past 15 years there has been an increase in the number of households living below the poverty line, while households in already wealthy areas become disproportionately wealthier. There is also evidence of segregation as the rich and the poor are now living further apart. Further information - Click here Independent 17.07.07
Urban Britain is heading for Victorian inequality; Tristram Hunt comments upon the Joseph Rowntree report. Today’s super-rich are endowing a new generation of cities as divisive and ostentatious as themselves. In New York, Shanghai and London, the cosmopolitan plutocracy outdoes each other in displays of ritual vulgarity from the car showroom to the restaurant table. But beneath the helipads, there lurks a growing cityscape of poverty and exploitation. In World City by Doreen Massey, she explores Ken Livingstone’s London as “a heartland of that socio-political economic formation that goes by the name of neoliberalism”. What strikes Massey is the expressive inequality of the city. “London is the most unequal place in the country and the effects of this wealth reverberate throughout the capital”. Hidden from the sterile corporate village of Canary Wharf are the crumbling estates of Bethnal Green. Around the corner from the millionaire terraces of Clapham Common is the sprawl of Lambeth. Driven by booming house prices and City excess, the geography of the city is being steadily fractured. Where once professionals, students, working-class communities and migrants mixed- places like Notting Hill, Camden or Kilburn- modern wealth extremities are closing neighbourhoods off. Once Livingstone decried the effects of global capitalism, but now he seeks to celebrate it with a canopy of hubristic City skyscrapers. Guardian 18.07.07
Timms reassures on CSR reporting; Stephen Timms (pictured left), the new minister for enterprise and small business, has reassured businessmen in Birmingham that there will be no pressure to increase the social and environmental reporting obligations placed on companies. He said: “There does not need to be [new regulation]. The strength of the corporate social responsibility movement is that it is business-led”. He said that existing rules, which require quoted companies to report on employee, environmental and community issues were adequate. The government would further the cause by supporting initiatives from business, rather than through legislation. Financial Times 13.07.07
Corporate giving boosts charities; the income of the country’s top 500 fundraising charities rose by 8.6 per cent in real terms to almost £11bn in the 2005 financial year, boosted in part by corporate giving. The increase of triple the rate of inflation is more than double the 3.8 per cent rise seen in 2004, but sees larger charities getting stronger at the expense of the smaller organisations that lack distinctiveness or agility, according to Charity Trends, published by the Charities Aid Foundation. A similar concentration of activity seems to be happening with corporate giving, with some big companies increasingly realising the investment value of corporate social responsibility. Further information - Click here Financial Times 16.07.07
Residents to get voice in spending decisions; local areas across England are to be ‘given’ a “community kitty” so that residents can control how millions of pounds are spent on regeneration. Hazel Blears, the new communities secretary, said that within five years she wanted to ensure that every neighbourhood has a pot of money that the community can decide how to spend. She said that there was “considerable scope to extend it to major parts” of council services by providing additional funding. The method, called “participatory budgeting”, has been used in some “New Deal for Communities” areas. It was originally started in South America- most notably in Porto Alegre in Brazil. There will be ten pilot areas where the scheme will be tested for a year; Salford, Lewisham, Bradford, Newcastle, St Helens and Birmingham council areas, along with Sunderland’s New Deal for Communities, Southampton Primary Care Trust, Mersey Waterfront regeneration partnership and Manton neighbourhood management area in Nottinghamshire. The Department for Communities and Local Government will then decide which to use as models for a national roll-out. Further information - Click here Regeneration 13.07.07
Economic regeneration goes local; the long-awaited Treasury report on sub-national regeneration proposes a new duty on local authorities to promote economic regeneration. The report would see local authorities handed more control over budgets and hints at greater revenue and capital raising flexibilities for local authorities; it also confirms that allowing them to raise a supplementary business rate for infrastructure remains on the agenda. Regional development agencies (RDAs) will focus solely on producing a single strategy for economic growth, jobs, housing, planning and the environment. But the RDAs will be required to work with business and local councils whilst local authorities will be given a statutory duty to analyse the challenges to their local economy. Funding will be delegated from RDAs to local authorities and sub-regions wherever possible, with the possibility that groups of local authorities will be able to establish statutory sub-regional bodies for economic regeneration. RDAs will be accountable both downwards to local government and upwards to the Department for Business, which will performance manage the agencies. Stephen Timms, the competitiveness minister, said that the proposals give regions “just one overarching goal- to improve the rate of growth in the region”. Sir Simon Milton (pictured left), the chairman of the Local Government Association said that the promise of devolved funding, and the acknowledgement that local authorities are central to regeneration were welcome. “But can the RDAs really be accountable to groups of local councils, to various select committees and various ministers without really being accountable to no one?” Further information - Click here Financial Times 18.07.07
Regional Assemblies to be scrapped; in the House of Commons statement on the publication of the review of sub-national regeneration initiatives, John Healey (pictured right), the Local Government Minister, announced that the eight English regional assemblies are to be scrapped. Oversight of the RDAs will pass to the new regional committees to be established in Parliament and to local government- although these arrangements await consultation. There are also a number of other changes including a proposal that the £525m Neighbourhood Renewal Fund should be overhauled to concentrate on a smaller number of districts with the most serious concentrations of deprived neighbourhoods. The local authorities or any new city-regions will take control of part of the RDA budgets and will also take over the £7bn budget for educating and training 14-19-year-olds from the Learning and Skills Council. The RDAs will also have responsibility for preparing new strategies that will bring together their regional economic strategies with the regional spatial strategies of the regional assemblies. Further information - Click here Times 18.07.07, Regeneration 20.07.07
Government launches review of casino plans; following the prime minister’s statement that the Government was reconsidering whether to have a regional or super-casino at all, the culture secretary James Purnell has told MPs that he will write to all 16 affected councils. He will ask them “to confirm their continued desire to license a new casino” in the light of changes in their political control since the May local elections. The Government will await the results of a study of the impact of gambling being undertaken by the Gambling Commission, before deciding whether to press ahead with a super-casino. Purnell also said: “In view of all the very real concern surrounding the regional casino, it would be prudent to examine afresh whether deprived areas can be equally well served by other forms of regeneration”. However Manchester has carried on lobbying to keep the super-casino alive arguing that the decision showed a “misunderstanding” of the city’s proposal, which “has regeneration as its sole purpose”. Further information - Click here Regeneration 20.07.07
Landlords should be forced to support BIDs; the All Party Urban Development Group calls for a compulsory levy, including landlords, to make Business Improvement Districts (BIDs) more sustainable, particularly in deprived areas. At present only occupiers pay the charge. Chris Carter, the director of public affairs at the British Property Federation, said; “BIDs are fine in successful and wealthy areas but struggle in deprived areas. Property owners will benefit from better BIDs. They help to clean up an area and, in the long term, will see property prices and rents going up”. The New West End Company, the UK’s largest BID said contributions from landlords such as the Crown Estate and Land Securities had been vital to its success. Further information - Click here Estates Gazette 21.07.07
Flat-pack villages for first-time buyers; nine “Ikea” villages could be built in Britain within a year as plans to erect 1,000 Swedish-style kit homes take shape to cater for first-time buyers. Promoters believe that the BoKlok concept, a joint venture between Ikea and Skanska that began in the mid-1990s, could present the key to affordable, sustainable housing. Thanks to Scandinavian design, which includes features that save energy and costs, the BoKlok concept will make apartments available for £90,000+ and three-bedroom houses for less than £150,000. The first development will be the assembly of 120 timber-framed houses in Gateshead this autumn for which Live Smart, the British partner, reports that there are already 800 people registered. Within weeks of being shipped from a factory in Milton Keynes, the brownfield site in Gateshead will feature L-shaped blocks, containing six one or two-bedroom apartments with communal car parks and balconies. The next phase will be two and three-bedroom houses. Three different types of tenure will be available- shared ownership, below market rent and outright sale, with legal agreements that will prevent buy-to-let. More than 2,500 BoKlok homes have been sold in Scandinavia, at about 20 per cent below market price, and at least 800 are being built every year. Further information - Click here Times 14.07.07
Aid for small firms to be revamped; in the Sunday Times Stephen Timms, the newly appointed competitiveness minister, whose portfolio includes small businesses, announces some changes. The Small Business Service is to be renamed the Enterprise Directorate to reflect the new focus of encouraging the growth of existing firms rather than the creation of new ones. The minister said that the name Small Business Service was no longer appropriate because the service element had been outsourced to Business Link. The Enterprise Directorate will be part of the newly created Department for Business, Enterprise and Regulatory reform, which has absorbed the former department of Trade and Industry. It will have a staff of 50. The name change comes as part of a renewal of the government’s small business strategy that will culminate in the creation of a new three-year action plan for 2008-11, which will probably be unveiled in October. Sunday Times 22.07.07
University spin-offs reach an all-time high; increasing collaboration between business and universities has fuelled a surge in spin-out companies and the licensing of scientific research to industry according to a report by the Higher Education Funding Council (HEFC). The number of spin-off companies formed in 2005-06 to exploit the research of university-based scientists rose by 12 per cent to 87. Previous concerns that universities were too quick to set up companies were allayed by figures showing that the number of spin-outs in existence three years after formation rose from 592 in 2004-05 to 669 in 2005-06. The number of licences and options rose by 25 per cent to reach an all-time high of 2,699 in 2005-06. Money earned by universities acting as consultants to business also rose, helping to push the gross income from intellectual property to a record £58m in 2005-06. Further information - Click here Financial Times 18.07.07
New loan scheme for community enterprise in London; a new form of wholesale loan scheme has been launched to provide low-interest capital to financial institutions that specialise in lending to communities in deprived areas of London. The £3.6m Wholesale Loan Fund will provide capital to community development finance institutions (CDFIs) with the aim of enabling them to offer more loans to entrepreneurs who are unable to access credit from mainstream banks. Uniquely the fund will absorb some of the loss the CDFIs have to suffer thus reducing the financial risk for the institutions. It will also enable the CDFIs to borrow money at lower interest rates than they can at present. The fund has been set up by Greater London Enterprise (GLE), which has also provided £250,000 in equity capital. GLE say that capital for the fund has been raised on “fully commercial terms” and investors will get their money back in five years. The Co-Operative Bank has provided £3m, the London Development Agency £250,000 and accountancy firm Kingston Smith £100,000. Michael Snyder, senior partner of Kingston Smith and Chairman of the City of London’s Policy and Resources Committee, will be chairman of the company. Further information - Click here Regeneration 20.07.07
Foreign firms snap up UK business; the latest data on share ownership produced by the Office for National Statistics (ONS) shows that foreign ownership of ‘Britain plc’ has grown from 3.6 per cent in 1981 to 40 per cent in 2006. Among the top FTSE 100 companies the percentage goes up to 43.6 per cent. The proportion owned by small shareholders is down to 13 per cent, an all-time low. The Independent says that the figures from the ONS add to the image of “Britain for sale”, as nationally important or symbolic companies from BAA to Abbey National to Corus fall into overseas hands. Having all been owned by small shareholders, all three are de-listed and are in the hands of Ferrovial, Banco Santander and Tata respectively. Small shareholders own 12.8 per cent of UK shares- a figure still bolstered by the privatisations and mutualisations of the 1980s with BT retaining half the people who bought their shares in 1984. However outside factors including the pension scandals, the collapse of Equitable Life and periodic Stock Exchange crashes and meltdowns, have pushed individual investors into property investment or collective funds, such as unit trusts. However the collective funds only own four per cent of the stock market and the proportion owned by the pension funds has declined from a third in the 1980s to 12.7 per cent today. Further information - Click here Independent 16.07.07
High street businesses plan bigger marketing budgets; according to the IPA Bellwether survey of UK marketing sentiment high street businesses are planning to expand their marketing budgets despite fears of the impact of interest rate rises on consumer spending. Retailers, travel and entertainment companies were the most likely to budget for increased marketing expenditure. Unsurprisingly the respondents said they were most likely to increase their corporate marketing on the internet. Companies were also bullish about spending on mainstream media advertising outlets such as television. Further information - Click here Financial Times 16.07.07
Denham has second thoughts on skills review; despite being a key recommendation of the Leitch Review of Skills John Denham (pictured right), the new secretary of state for innovation, universities and skills, has dropped the idea that employers should control the national skills training budget by 2010. He said that the timetable suggested by Lord Leitch was too rapid and risked “destabilsing” further education colleges. Employers would still get direct access to national training budgets through a big expansion of Train to Gain, which helps and advises companies wanting to train staff. At present the budget is £440m but this will now rise to £900m by 2010-11. Students will also be able to influence which courses receive funding through the new Learner Accounts that will represent around £1,500 of “virtual money” that they can choose to spend on the course of their choice. Although Denham insisted that colleges are going to have to change, Graham Hoyle, chief executive of the Association of Learning Providers, expressed disappointment in the delay, saying that his members had the capacity to meet demands of employers “so why not let us get on with delivering it?” Other proposals include a new adult careers service, a Commission for Employment and Skills, and legislation to strengthen adults’ entitlement to be funded for free training in basic literacy and numeracy. The aim is to help four million adults acquire new skills by 2010. Further information - Click here Financial Times 19.07.07
Hain toughens up tough love for lone parents; lone parents are to be targeted with “tough love” as part of a radical overhaul of the welfare system aimed at getting 2.3m people to take jobs and move off benefits. A green paper delivered by Peter Hain (pictured right), the work and pensions secretary, lays the foundation for the implementation of David Freud’s report. This recommended that lone parents should be required to seek work if their youngest child is 12 years or over rather than the current age of 16. This would get a potential 300,000 extra more lone parents back into work. The Freud report recommends that eventually Britain should adopt the Scandinavian model where single mothers have to seek work when their youngest child is three. Hain now reports that the age will be lowered to 7 from 2010 as Labour honours its pledge to provide all-day childcare from 8am to 6pm from 2010. The green paper is likely to reject Freud’s idea to merge all benefits into a single welfare payment but will use his ideas to tackle problems of deep and continuing poverty among ethnic minorities, particularly Bangladeshi families. Freud also said that to achieve the Government’s target of nearly full employment with 80 per cent of the population in work, 2.3m unemployed people must be persuaded to take jobs. This would mean targeting 300,000 lone parents out of the current total of 780,000 claiming income support; one million older people out of 20m aged over 50; and reducing the numbers claiming incapacity benefit by one million from 2.68m. Independent 16.07.07
Bank invests in recruiting schoolgirls; girls as young as 17 are being wooed by recruiters from Morgan Stanley who say that not enough young women are entering the City through traditional university careers events. The FT says that it is the latest sign of the City trying to undo the damage from high-profile sex discrimination cases and bring more women into an area with a reputation for being dominated by men. In mid-July, Morgan Stanley hosted the first “early access” event for 75 students from top-performing girls schools in an effort to spark their interest in investment banking many years before they will be eligible for a job. Abbas Jaffer, the head of diversity and graduate recruitment, said that the event was part of a strategy to bring women into areas where they were most unrepresented, such as sales, trading, investment management and private wealth services. The event was attended by girls from a number of top state and private schools, including St Paul’s Girls School and Colchester County High School. The bank said that it had received positive feedback including interest from many in attending Morgan Stanley’s one-week work experience programme later in the summer. Financial Times 16.07.07
House of Lords calls for apprenticeship funds for employers; a report by the Economic Affairs Committee of the House of Lords calls for all government funding for apprenticeships to go directly to employers within five years. The committee, which includes two former chancellors, was heavily critical of the current arrangements for apprenticeships, including the division of responsibility between different government departments. The UK lags behind the rest of Europe in providing apprenticeship training. A large company such as BT, the report says, offers just 80 apprenticeship places despite receiving applications from 15,000 people. Lord Wakeham (pictured left) , the committee chairman, said that the UK did too little to provide effective education for school leavers who did not intend to go to university. The proposals to funnel apprenticeship funding through employers is similar to government plans to make other parts of the vocational training system more “demand led”. Further information - Click here Financial Times 20.07.07
Business leaders call for weekend GP surgeries; the CBI has taken the unprecedented move of writing to Health Secretary Alan Johnson asking him to give urgent consideration to opening doctors’ surgeries on Saturdays and Sundays instead of making it a weekday-only service. The employers’ body estimates that employees are spending millions of hours a year sitting in doctors’ waiting rooms during office hours because of a lack of weekend GP clinics. Further information - Click here Observer 22.07.07
Ministers may be cooling on private sector role in welfare-to-work; a much bigger role for the private and voluntary sector in delivering welfare-to-work programmes has been announced by the government. However ministers failed to lift huge uncertainty over how big that role would be and what form it would take. The welfare green paper backs the Freud report’s recommendations for bigger and longer contracts, focused not only on getting people into work but also on keeping them there. It endorses Freud’s proposal that JobCentrePlus, the government agency responsible for delivering welfare benefits to the jobless, should handle routine unemployment while the private and voluntary sectors take on the more difficult and challenging cases, paid largely on results. However Mr Hain has revived the notion that the public sector - whether through Job Centres, local authorities or public-private partnerships- could play a role. The green paper puts heavy emphasis on the so-called City Strategies approach, under which local authorities bring together a wide range of agencies to deliver welfare-to-work. Further information - Click here Financial Times 19.07.07
Slimmed down curriculum releases time for pupils; the Qualifications and Curriculum Authority says that the new, slimmed down school curriculum for 11-14 year-olds in England will free up 25 per cent of the time for students to either catch up on their basics or play to their strengths. It contains three new subjects with the Jamie Oliver effect meaning that cooking is now an entitlement for all 11-14 year-olds. Citizenship education will now include work on British values and national identity. An optional “economic wellbeing and financial capability” strand can be taught throughout the school as part of the renamed PSHE curriculum, now meant to refer to “personal, social, health and economic wellbeing”. Another change is that climate change will take a bigger role in the geography curriculum and science will include study of the ethical and moral implications of science. Further information - Click here Guardian 13.07.07
Eton to raise £50m to fund 40 per cent of pupils from poorer backgrounds; Eton College has announced a scheme that will see 40 per cent of pupils drawn from poorer backgrounds. The world’s most famous boarding school is trying to raise £50m to cover a bursary scheme that would pay for gifted students who could never afford the annual £26,490 fees. So far it has raised £20m in 18 months from the school’s alumni. Eton denies that the scheme is designed as a response to the recent proposals from the Charity Commission that fee-paying schools who are charities will have to prove a public benefit. Eton was originally founded in 1440 by Henry V1 to provide free education to 70 poor students who would be sent on to Cambridge. Further information - Click here Independent 23.07.07
Balls seeks business mentors for every pupil; Ed Balls (pictured right), the new education secretary, has urged business leaders to provide classroom mentors as part of the battle to raise educational standards. He tells the FT: “If I said every child in the country should have a business mentor that may sound like a massive challenge. But that is the direction in which we should be going”. He cites a recent visit to Morpeth secondary school in Bethnal Green, which has been transformed by a business mentoring scheme. In 1994 the school, where 70 per cent of the pupils receive free school meals, saw 11 per cent achieving 5 A-C GCSEs. The most recent figures show a rise to 76 per cent, well above the national average. “This is a school with close links to companies like Merrill Lynch and Timberland. It has 120 pupils in the school on the mentoring scheme at any one time. Every three weeks an employee of Merrill Lynch comes to the school; every three weeks one of the pupils goes to the City and talks to his or her mentor about what they are doing”. Balls sees the personal bond between people from different parts of the social spectrum as part of the drive to raise the educational standards of the bottom 20-30 per cent of children; he also sees it as important in combating problems like youth crime. Financial Times 20.07.07
Universities urged to support academies; in his first statement to the House of Commons since becoming the new schools secretary Ed Balls promised to accelerate the roll-out of the city academies programme with an expanded role for public sector sponsors. He called for every university to become involved in the flagship education programme. He abolished with immediate effect the requirement that universities must first provide £2m in sponsorship, a rule that continues to apply in theory to business sponsors. He announced that nine higher education institutions were interested in sponsoring an academy. The government also envisages a bigger role for local education authorities in the conception, planning and implementation of academy projects. Further information - Click here Financial Times 11.07.07
Town hall link may limit academies; the annual assessment of city academies undertaken by PwC says that the independent status of the city academies could be threatened by the increasing trend of local authorities acting as “co-sponsors” of the new schools. The report says that it raises issues that would require further investigation. These include “the implications for the independent status of the academies, alongside the strengths that might flow from academies being more closely aligned with their local authority”. The report says that school autonomy was one of the “critical success factors” of a scheme that is showing overall improvement in the performance of pupils in some of the most deprived areas of the country. The next day the FT gives an example of how one London local authority is trying to shut out less amenable private sponsors. It quotes Camden Council who, as part of a discussion on the future of secondary education in the borough, is advising their councillors that they should co-sponsor a city academy with University College to that they can keep control over ethos, curriculum, admissions and other aspects. Competitions were introduced in the 2006 Education and Inspections Act but embarrassingly for the government, the first such competition was won by Haringey Council. Further information - Click here Financial Times 20.07.07, 21.07.07
Oil and gas may start to run out in 2015; the world’s top oilmen have warned that humanity is approaching an unprecedented crisis when not enough oil and gas will be produced to keep industrial civilisation running. The National Petroleum Council is a body of 175 authorities that reports to the US government. It includes the heads of the world’s largest oil companies including ExxonMobil, Chevron, ConocoPhillips, Occidental Petroleum, Shell and BP. It has produced a 420-page report, Facing the Hard Truths about Energy, which is remarkable in that it marks the conversion of Lee Raymond, the recently retired chief executive of ExxonMobil, who led the opposition against action to tackle global warming. The report argues for “an effective global framework” to manage the emissions of carbon dioxide- “incorporating all major emitters”- and urges the US to cut the pollution that causes climate change. It concludes that “the global supply of oil and natural gas from conventional sources….is unlikely to meet…growth in demand over the next 25 years. It says that “many observers think that 80 per cent of existing oil production will need to be replaced by 2030”. Further information - Click here Independent on Sunday 22.07.07
MPs consider compulsory green levy; a report by the all-party Environmental Audit Committee proposes that airlines, car dealers, power companies and petrol stations would have to ask customers to pay a green levy. Taxi companies, diesel train operators and sellers of patio heaters would also fall foul of a law aimed at businesses that emit large amounts of carbon dioxide. The report calls for more Britons to offset their carbon emissions by paying to reduce pollution elsewhere in the world. As well as neutralising the increase in the main gas blamed for global warming, MPs believe that offsetting helps to educate people about their “carbon footprint”. The report is critical of the airlines- three of whom gave evidence. It says that British Airways’ efforts are “risible” but acknowledges that the airlines are not co-operating because of the unexpected increase in the Air Passenger Duty. However there are some good examples including Land Rover who is already voluntarily offering new car buyers the chance to offset their first 45,000 miles of carbon emissions by paying a levy to an offsetting company. Radio Taxis, the London cabbies, became the first “carbon-neutral” fleet two years ago by offsetting 24,000 tonnes of CO² to pay for forestry and renewable energy. Fewer than two per cent of consumers are offsetting their carbon and the market is worth less than £3m and its growth is tiny. Offsetting is attacked by some environmentalists, who compare it to the medieval selling of indulgences by the Catholic Church. Further information - Click here Times 23.07.07, Independent 23.07.07
Micro-generators fall foul of planning and subsidy cuts; suppliers of mini-wind turbines and solar panels have reported falls of up to 90 per cent in customer enquiries after the Government cut subsidies in May. Meanwhile Tory leader, David Cameron, and energy minister Malcolm Wicks are struggling with the vagaries of the planning system to get their wind turbines built. Energy experts said that the UK had no chance of meeting the EU target of generating a quarter of its energy from renewables by 2020 without a massive roll-out of microgenerators in the home. Last year the Government launched the three-year Low Carbon Buildings programme to subsidise microgeneration for households and public buildings. Some £18m is available for households with £50m earmarked for public buildings. But to date, just under £5m has been spent on 2,812 projects in the UK. The amount handed out is likely to fall still further after the Government reduced the level of grants in May. The other change was to stop the previous monthly allocation of grants, which typically ran out within hours of their becoming available. And even the few grants which are awarded still need planning permission. While 2,812 projects have received funding another 4,460 are awaiting planning permission. Philip Wolfe of the Renewable Energy Association fears that the Treasury could take away any unspent money at the end of the programme in two years time. He goes on: “The amount of available for grants is peanuts compared to other countries like Germany, Italy or Spain”. Independent on Sunday 22.07.07
Heathrow-‘the world’s least favourite airport’; whilst the Independent starts a campaign spotlighting Heathrow’s inadequacies under the banner of ‘the world’s least favourite airport’ the Times carries details of a letter sent by BAA, the owner-manager of the airport, calling on its regulator to consider suspending the penalty regime. The reason is the opening of Terminal 5 in March 2008 when British Airways transfer their services from Terminal 1 and Terminal 4 to their new home. BAA describe the potential situation as analogous to “what happened after a terrorist attack”. British Airways account for 40 per cent of the traffic at Heathrow and the overall move will involve 90 airlines. Worsening delays and overcrowding have plagued Heathrow, with the pressure on space exacerbated by the introduction of stringent new security measures last year. Tony Douglas, who quit his job as chief executive at Heathrow earlier this month, has described the airport as “at times held together by sticking plaster”. Heathrow handles 68m passengers a year- about 50 per cent more than its capacity of 45m. The opening of Terminal 5 is intended to ease congestion. Independent 21.07.07, Times 23.07.07
Central London house prices rise by 34 per cent; the latest London housing review produced by Knight Frank says that the value of houses in the prime central London (Chelsea, Kensington and Notting Hill) market has risen by 34.5 per cent in the past year compared to Nationwide’s figures for the whole of the UK which show a rise of 10.2 per cent. As that figure is already skewed by the London prices the gap between London and the rest of the country gets ever wider. Liam Bailey, Knight Frank’s head of residential research, acknowledges that he underestimated the sheer weight of cash that would seek out white-stuccoed town houses or supersized “lateral” apartments. “We saw a growth of 30 per cent last year and expected 15 per cent; the surge in demand means that we have raised our forecast for the whole year to 25 per cent”. Further information - Click here Times 14.07.07
Central London office rents jump by 25 per cent; in a sister review on the central London commercial market Knight Frank say that office rents are increasing at their fastest rate for seven years. Financial groups are expanding rapidly amid a strong stock market. Typical “grade A” rents in the City have jumped by 25 per cent in the last year from £49 to £61.50 per sq ft. In the West End rents have risen by 26 per cent from £85 to £107.50. However some analysts are warning that developers are about to unleash swaths of new office space. An estimated 33.5m sq ft of office developments have planning permission, although experts predict that only a fraction of that will go ahead. This includes 5m sq ft of “speculative space”- with no agreed tenants- to be built in the City alone. A number of these are notable office towers of which, some, such as Gerald Ronson’s “Heron Tower” will proceed speculatively whilst others will wait for a certain level of pre-lets. These include the giant skyscrapers such as British Land’s Leadenhall Tower, Great Portland Estates’ 100 Bishopsgate and the so-called “Helter-Skelter” owned by Arab Investments. Another skyscraper won planning permission after a long inquiry in the form of Land Securities’ 600,000 sq ft “Walkie-Talkie”, a 39-storey tower at 20 Fenchurch Street. Another City victory has been to persuade JP Morgan to choose a site at St Alphage House for its new 1m sq ft European headquarters. Further information - Click here Financial Times 16.07.07
Thameslink to get the green light? the Sunday Times claims that the impending statement on rail policy will give the go-ahead to the first phase of the long-delayed Thameslink 2000 project. The scheme, which will bring a big increase in traffic on the north-south route through London, should boost rail capacity before the 2012 Olympic Games. There is not expected to be any commitment to Crossrail, the east-west route. This will come before the comprehensive spending review in October. Sunday Times 22.07.07
The Southbank- another form of public-private partnership; in a week when the travails of Metronet are not giving a good name for public-private partnerships James Harding, business editor of the Times looks at the South Bank as an example of a different kind of partnership which shows a more promising model of how the state can work with business. He says that the Southbank Centre is a self-styled cultural enterprise, which has transformed itself from a 21-acre site housing the Royal Festival Hall and the Hayward Gallery and operated by a municipal bureaucrat into a village of shops and restaurants in the heart of central London. In 2002 Clive Hollick became chairman and started to impose a more commercial ethos on the basis that Arts Council funding cannot keep pace with inflation in the arts, nor the ambitions of a place like the Royal Festival Hall. As rental income has risen over the past five years from £500,000 to £7.5m the funding from the Arts Council now contributes just under half of the £40m budget compared to over 60 per cent in 2002. Having restored the Festival Hall the next step is to turn the car park into a boutique hotel and mini-conference centre. The Hayward Gallery is also to be refurbished. Times 20.07.07
Shoppers could face 10p tax on plastic bags; shoppers in London may face a 10p tax on plastic bags under a controversial plan from London Councils- a coalition of the 33 Labour, Conservative and LibDem councils together with the City of London. The plans, which are based on a similar scheme in Ireland, will be included in a London Local Authorities Bill due to be put before MPs in November. The councils say that reducing the number of bags used in Britain every year- 13 billion- will reduce carbon dioxide emissions by 58,500 tons- the equivalent of taking 18,000 cars off the road. However retailers are reacting furiously to the proposals. Kevin Hawkins of the British Retailers Consortium said that plastic bags made up less than one per cent of the rubbish going to landfill. Further information - Click here Evening Standard 13.07.07
NAO warns about areas of uncertainty in Olympic costs’; a report from the National Audit Office (NAO) has warned about “significant areas of uncertainty” in the revised £9.3bn budget for the London Games. Sir John Bourn, head of the NAO, warned the government that it still had to “work to contain funding and achieve value for money”. He highlighted areas of uncertainty affecting costs, including the design specification and future use of Olympic venues, the level of price inflation in the construction industry and the contracts negotiated by suppliers. This high level of uncertainty explains why Gordon Brown insisted the revised budget included a £2.2bn contingency fund- excluded from the original bid. The political imperative for keeping the 2012 event within budget stretches beyond the implications for public finances. Brown does not want the government’s reputation for competence damaged by any further cost overruns. Labour is acutely aware the event could coincide with the next-but-one general election. The NAO has, in effect, given the revised budget its seal of approval, saying it “should be sufficient” to cover the estimated costs of the games, provided-a “most important proviso”- the assumptions on which the budget is based hold good. The Conservatives argued the need for “clear and quick decision making” pointed up by the NAO could be jeopardised by the recent government changes where Tessa Jowell was moved from her cabinet role as secretary of state to a more junior post in the Cabinet Office, retaining ministerial responsibility for the Olympics but leaving the staff and budget for the games in her old department. Further information - Click here Financial Times 20.07.07
Hopkins win contract for Olympic Velodrome; hard on the heels of the Tour de France it has been announced that Hopkins Architects, designer of the Lord’s Mound Stand and the Glyndebourne Opera House, have won the contract to build the 6,000-seat Velodrome. The venue for the cycling events will be one of the six main venues and is only the second to be announced. The first was the Aquatics Centre, an undulating visionary design by Zaha Hadid. According to the FT it is already causing controversy over rising costs, but it looks a stunning, ambitious design. Reviewing the prospects for the Olympic site Edwin Heathcote, the FT’s architecture critic, says that for a brief moment architecture may displace cost as the fundamental interest in the Olympic construction programme. He says that there is a danger that the exquisitely organic stadium designed by a team including the London avant-garde outfit Foreign Office Architects, looks likely to be watered down. So does the complex and seductive web of walkways leading to the games. Ricky Burdett, head of design at the Olympics, is likely to encourage young designers for the temporary structures, which will house sports such as basketball, fencing, handball and hockey. Further information - Click here Financial Times 13.07.07
Kensington schemes run into difficulties; developers are having second thoughts about two different schemes in Kensington & Chelsea. Heron, in a joint venture with residential developer Westcity, is reconsidering its £135m bid for the one-acre John Lewis Partnership depot site in Chelsea after learning that the council’s requirement for social housing is 50 per cent rather than 30 per cent. The council brief also states that affordable housing will be allowed to be provided off-site only on an “exceptional basis” and where there will be “substantial benefits” for the quality of the social housing. Kensington & Chelsea have also reversed their decision made in January to grant permission to Multiplex and Tesco to build a £200m 27-storey residential tower on West Cromwell Road, SW7. Estates Gazette 21.07.07
Property giants do battle for Croydon; Croydon Council has shortlisted eight developers to partner in a £450m urban redevelopment vehicle (URV). The new venture, which will undertake a 15-year borough-wide regeneration programme, is expected to trigger a wave of similar deals across the country with Birmingham and Sunderland expected to be next. The list includes Lend Lease, Land Securities Trillium, John Laing, and Kier Property. Other shortlisted parties include a consortium of British Land, Crest Nicholson and Land Regeneration Partnerships; Morgan Sindall’s AMEC with US pension fund AIG; Telereal with construction firm Amey; and Mapeley with Terrance Hill and housebuilder Fairview. The first projects will include the redevelopment of five council owned sites- including its 1960s HQ, Taberner House- that have an estimated value of £89m. Estates Gazette 21.07.07
MTV retreats from the West End; MTV is quitting its studios at 1 Leicester Square after three years and is moving back to its studios at Camden Lock. One problem is that the rent of £625,000 is thought to have proven to be too costly. MTV arrived in Leicester Square amidst much fanfare in 2004 despite a battle with Westminster Council, which claimed that hordes of screaming fans would cause a nuisance. MTV stopped broadcasting from Leicester Square on New Year’s Eve. Estates Gazette 14.07.07
Israeli group favourite to buy Somerset House; the Alrov Group, one of Israel’s largest quoted companies is in the pole position to buy a major wing of Somerset House. The Pennethorne wing, facing Waterloo Bridge, was put up for sale by the Government in April. The wing, which is currently occupied by the Inland Revenue, is being sold as a luxury 140-bedroom opportunity and was only offered to a select group of investors. More than 760 HM Revenue & Customs (HMRC) staff occupy the 500,000 sq ft former palace. HMRC are expected to announce plans to move out of Somerset House and its other London offices at Charles House, W14 and Dorset House, SE1, later this year. Alrov is also one of several luxury hotel and property groups bidding for the Café Royal In Regent Street. Estates Gazette 14.07.07
grapevine is produced twice monthly (except in August and December when there
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Next issue on 16th August 2007
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