Prospect of a very gloomy budget in the spring says Item Club; the latest report of the Ernst & Young Item Club says that growth in UK financial services could halve as a result of the credit squeeze, holding back the economy and forcing the government to slash growth in public spending. However this will give the chance to rebalance the economy away from cheap credit. It also predicts more discerning lending practices and lower bonus payments in London could turn the housing market’s “soft landing” into a sharper correction- but judges a big housing recession to be unlikely. Led by a subdued housing market and high street, economic growth will slow from 3.1 per cent in 2007 to 2.1 per cent in 2008. The Item Club predicts that the consequences are much more significant than the pre-budget report suggests and Peter Spencer, the economic adviser to the Item club, says: “All this leaves the chancellor with the prospect of a very gloomy budget in the spring”. However the report does suggest that: “As interest rates come down and new supply remains restricted, the foundations will be laid for renewed real price growth in the long run”. Further information - Click here Financial Times 22.10.07
MPC minutes trigger hope of rate cut; the minutes of the last meeting of the Bank of England’s Monetary Policy Committee (MPC) show that despite the eventual eight to one vote to keep rates at 5.75 per cent there was a serious discussion of a quarter point rate cut. Members were sufficiently concerned about global credit crisis and deteriorating economic growth prospects for Britain. The minutes say: “The Committee should not wait for such a slowdown to materialise in the data before acting”. However in the end the MPC members decided that a cut would have caught the markets by surprise. Economic data published since the MPC meeting supports the cautious stand with unemployment down by 12,800 in September while average earnings grew by 3.7 per cent in the three months to August from 3.5 per cent in the previous quarter. Inflation has stayed at 1.8 per cent for the third month running although oil prices are still high. Further information - Click here Independent 18.10.07
Report says migrants are a boon to UK economy; migrants are more skilled and often more reliable and hardworking than British workers and are fuelling the country’s economic growth to the tune of £6bn a year, according to the first official study of their impact. The report for the Migration Impact Forum also concludes that on average migrants earn more and therefore pay more tax. The study, which was conducted jointly by the Treasury, Home Office, the Office for National Statistics and the Department of Work and Pensions, says that the arrival of hundreds of thousands of Poles and other eastern European nationals has had “no discernible” impact on unemployment and has led only to a “modest dampening” of wage growth for workers at the bottom end of the earnings league. It says that in the twelve months up to June 2006, 574,000 migrants came to live in Britain and in the same period 385,000 left, giving a net inflow of 189,000 - 28 per cent down on the inflow in the previous year of 262,000. Separate regional reports show that in seven of the eight regions in England migration has caused pressure on housing and in five of the eight regions there were difficulties over crime and education. Further information – Click here Guardian 17.10.07
UK could do more to help immigrants; the UK lags behind many other European countries when it comes to helping migrants integrate into society according to a report issued by the British Council and the Migrant Policy Group. The Migrant Integration Policy Index, which has studied 25 EU member countries and three non-EU countries, also notes that the UK failed to anticipate the upsurge in immigration caused by EU enlargement. It ranks the UK ninth overall in the study, three places above France and five above Germany. Sweden was top, followed by Portugal, Belgium, the Netherlands, Finland, Canada, Italy and Norway. While the UK was placed fifth for legal definitions of discrimination and racism it was placed eleventh for enforcement. If found that while migrants are given financial help they have to go through long processes to solve their grievances. The report puts the UK 15th out of 28 for political participation, pointing out that neither “migrants [nor] their associations are structurally consulted by government at any level”. It also says that more could be done to help migrants break into the labour market. Further information - Click here Guardian 15.10.07
East European immigrants spread throughout the UK; a report by the Office for National Statistics (ONS) shows that immigrants from eastern Europe have changed the face of Britain by looking for work across the country, not just in traditional centres such as London and the south east. Sainsbury’s now stock a range of 32 Polish foods in 11 stores while Tesco offers golabki, a cabbage-based soup and flaki, a tripe soup. London, the east and west Midlands, the east of England and Northern Ireland include the local authorities with the highest ratios and there are relatively low ratios in Wales, the Thames Estuary, south Yorkshire, the north west and the north east. The findings are based on 508,487 immigrants who registered for work between May 2004, when the EU extended its membership, and December 2006. Poles were the largest group with 327,538 and are dominant in the Scottish Border region and Central Valley, the industrial north east, much of Wales and the south west, apart from Western Cornwall. Lithuanians are the second largest group and are strong in Northern Ireland, eastern England, western Cornwall and Herefordshire. Further information - Click here Times 12.10.07
Tesco turn to the canals; Tesco has started to transport containers each holding the equivalent of 32,000 bottles of wine from Liverpool’s Royal Seaforth dock to a bottling plant 32 miles away at Irlam on the banks of the Manchester Ship Canal. They claim that by doing this three times a week they are taking 50 lorries off the road every week and cutting carbon emissions by 80 per cent. Until two years ago, Tesco’s wine from Australia, California, Chile and Argentina used to arrive at ports in southern England in bottles. The company switched to bulk tanks (saving 15,840kg of imported glass) with the wine transported north by road. According to the Guardian, Tesco made quite a song and dance about the maiden voyage, claiming to be the “first major UK retailer to start transporting freight by canal”. This was disputed by Sainsbury’s who said that it had already carried out trials in London, using the Thames to send goods to a shop from a distribution centre. Further information - Click here Guardian 19.10.07
BT spends £250m on wind farms; BT is to spend £250m building wind farms around the country in the UK’s biggest single renewable investment outside the energy sector. The telecoms group, one of Britain’s biggest electricity users, should be able to provide 25 per cent of its own needs from the turbines and should be sourcing more than half of its total power needs from non-fossil fuels by 2016. The group claims to have already cut its carbon emissions by 60 per cent and hopes to have achieved an 80 per cent cut over the next nine years despite the extra power needed for broadband customers. The company has applied for planning permission for test masts to be erected at Goonhilly satellite earth station in Cornwall, Wideford Hill radio station in Orkney and Scousburgh radio station in Shetland. Other sites are being lined up so that the company can put up 125 turbines each capable of producing two megawatts of energy, which will give BT the 250MW of electricity it needs to provide 25 per cent of its needs by 2016. Both the government and green groups welcomed the announcement. John Hutton, the business and enterprise secretary, said that he hoped other organisations and individuals would follow BT’s example. Other companies that have installed turbines include Ford, Nissan, Pirelli and Michelin. The British Wind Energy Association said that dozens of large companies were considering building their own turbines but were finding the planning process rather slow. Further information - Click here Guardian 19.10.07, Times 19.10.07
RDAs have their budgets cut in spending review; the English regional development agencies (RDAs) will have to make significant cuts over the next three years as a result of a six per cent cut in their overall budget to £2.1bn in 2010-11. In real terms the cut on a year-on-year basis is 4-5 per cent. The RDAs have previously been used to rapid budgetary growth and will now have to be more selective in what they fund. The change comes at a time when RDAs are due to take on extra responsibilities for developing integrated regional strategies as well as coordinating responses to natural disasters. Their budgets have also been raided by £180m over three years to match-fund programmes run by the Technology Strategy Board to stimulate innovation. Another area of uncertainty is the Treasury‘s sub-national review of economic development and regeneration published in July. The review recommended returning some powers to local councils and buried in the CSR are statements about the need for the RDAs to strongly delegate to “give far more autonomy to local authorities and sub-regions in the allocation of spending”. In turn this could lead to conflicts between top-down, region-wide initiatives, such as business support, and the more localist agenda. The RDAs will presumably take the lead role on regional spending especially as they now head up integrated regional strategies. The RDAs look as though they are going to land up as strategic influencers; focusing more on coordinating activity in their regions, brokering deals and influencing economics through the integrated regional strategy. Delivery is likely to be delegated. Further information - Click here Regeneration 19.10.07
Bad weather and strong pound hit tourism; tourism suffered a 13 per cent year-on-year fall in visitor numbers in August, the first official indication of the cumulative effect of floods, foot-and-mouth, terrorism and the poor weather on the sector. There are also concerns about the continuing effects of the dollar’s weakness against the pound and competition from other world destinations. Foreign residents took 3.24m trips to Britain in August compared to 3.70m in the same month last year. Visits by North Americans, in particular, fell from 495,000 in August 2006 to 450,000 this year. News of the slump comes as VisitBritain, the national tourist organisation, has warned that Britain is losing out to rival countries and could lose potential visitors to the 2012 Games unless more is invested in tourism. Further information - Click here Independent 18.10.07
Government opts for Milton Keynes-style roof tax; in his pre-Budget report (PBR) chancellor Alistair Darling announced that the government had decided to scrap proposals for a development land tax with a planning gain supplement in favour of a Milton Keynes-style “roof tax”. The U-turn followed an industry-wide campaign against the supplement led by an alliance of the British Property Federation (BPF), the Home Builders Federation, London First and the Major Developers Group. The alliance had published a 31-page document Developer contributions to infrastructure, opposing the tax on an uplift in land values after consent in favour of the tariff system developed by Milton Keynes. The alliance argued that the tariff-based levy should be applied on all but the most minor developments with residential developers paying a levy on each consented house and commercial developers a tariff on the increase in floorspace consented. The fee would be set by local authorities, with the charges to be fully costed and based on each council’s infrastructure needs. An element of the tariff would be pooled by the regional development agencies to fund regional infrastructure. Further information - Click here Estates Gazette 13.10.07
£2bn funding for neighbourhood renewal; the Comprehensive Spending Review says that there will be £2bn of funding to support efforts to turn around England’s most disadvantaged areas in the three years from 2008. The fund will support the continuing New Deal for Communities programme, but also contains a new programme to “strengthen communities during estate transformation” and a new “working neighbourhoods fund” to focus on improving the economic prospects of disadvantaged areas. Detailed allocations will be announced at a later date including how much will go into each fund and the amount each eligible authority will receive. This will follow a review of the Indices of Deprivation next month. Regeneration says that the Department of Communities and Local Government would not say whether the Neighbourhood Renewal Fund, worth £1.05bn in 2006-08, will continue in its current guise after 2008. On the local government front the funding for community cohesion projects will be massively increased to £50m over the next three years. Further information - Click here Regeneration 12.10.07
Middlesbrough is worst town to live; according to the Channel 4 programme, Location, Location, Location, Middlesbrough has topped this year’s league table as the worst place to live in the UK. It supplants Hackney, who topped last year’s table, but has now dropped to 12th. The researchers say that Middlesbrough has achieved its unwanted eminence through high crime, severe drug and health problems, and poor education results. Hull, Newham, Nottingham and Merthyr Tydfil are the other areas in the top five. Newham has risen one place to third, but Islington has dropped from fifth to seventh. Two other London boroughs in the top twenty are Barking and Dagenham (14th) and Haringey (18th). Edinburgh was declared the best place to live. Further information - Click here Evening Standard 15.10.07
Manchester is worst airport for queues; Manchester- not Heathrow- is the worst airport in the country for queues, according to a new website monitoring delays. Criticism of airport delays has concentrated on Heathrow and Gatwick. A recent Competition Commission report found “unacceptable delays” at the London airports and conditions “adverse to the public interest”. However, a snapshot of data from the website-www.ukairportdelays.com - showed that the average waiting times of 35 minutes for check-in, 32 minutes for security and 24 minutes for immigration at Manchester. The same queues took 39, 35 and 12 minutes at second placed Gatwick, and 20, 26 and 15 minutes at fourth-placed Heathrow. Leeds Bradford was third. Further information - Click here Financial Times 16.10.07
Darling stands firm against business groups to resist CGT changes; chancellor Alistair Darling has met Britain’s leading business groups in response to their warning that the pre-Budget report decision to scrap the 10 per cent rate of Capital Gains Tax (CGT) would damage enterprise. While he held out an olive branch by pledging to work with the four groups on measures to “improve the business environment” and “encourage entrepreneurship”, he refused to budge on the pressure to reverse the CGT reforms. The British Chambers of Commerce, CBI , Institute of Directors and the Federation of Small Businesses had joined forces in the period immediately after the announcement in the hope of putting pressure on the chancellor to reverse the decision. Many small businesses were dismayed by the changes, which saw the scrapping of taper relief that reduced the tax on a sliding scale from 40 per cent to 10 per cent, and replaced with a flat 18 per cent rate. The four organisations have described the changes as a “bolt out of the blue” and that “the net effect will be to set back the growth of the economy over coming years, by discouraging longer-term investment and risk-taking”. David Frost, director-general of the British Chambers of Commerce said: “Chancellor Gordon Brown always gave the impression that he understood business and commerce and oversaw 10 years of economic growth… [whereas Darling gives] no indication that he understands that a successful economy is dependent on having dynamic businesses”. The changes are scheduled for next April, leading to expectations that many business owners will sell up before then to avoid much larger tax bills. The CGT changes follow on from the decision to raise the rate of corporation tax for small businesses in the last Budget, from 19 to 22 per cent. Guardian 15.10.07, Financial Times 23.10.07
Government ditches Local Enterprise scheme; the Department for Communities and Local Government has admitted that under the Comprehensive Spending Review there will be no new funding round for the Local Enterprise Growth Initiative (LEGI) although existing projects would continue. LEGI was set up in 2005 to prevent business failure and attract investment into deprived areas. There have been two rounds of funding with £300m committed to 20 councils up to 2008. Regeneration 19.10.07
Bradford is Britain’s greenest city; Bradford, the city more associated with dark satanic mills than rolling hills comes top of the environmental impact index in the latest Sustainable Cities Index published by the Forum for the Future. Brighton comes top overall in the index which measures environmental impact, quality of life for residents and “future proofing”- how well a city is doing in addressing issues such as climate change, recycling and biodiversity. In fact Brighton tops two of the constituent tables- Quality of Life and Future Proofing, with Bradford topping the remaining table. The overall table has Edinburgh, Bristol, Plymouth and Leeds in the positions after Brighton. Despite one of the most ambitious civic climate change action plans in the world, London came 10th, largely due to its pollution which brought it down to 17th in the green table. Further information - Click here Guardian 20.10.07
Non-EU migrants earn more; a Home Office report on the economic impact of immigration finds that immigrants from the Middle East, Africa and the Indian sub-continent earn more than the average UK-born resident. But immigrants from European states outside the original 15 EU members earn “noticeably” less than native Britons. The employment rate for foreign-born workers was 68 per cent in 2006 compared to 75 per cent for UK-born workers. The report also reveals that one in eight UK residents of working age is foreign-born- up from one in 13 ten years ago. It also concludes that inward migration has not had a negative effect on wage levels. It also rejects claims that eastern European migrants have led to an increase in unemployed people claiming benefits. Liam Byrne, the immigration minister, said that the findings would help ministers to “strike a new balance in Britain’s migration policy: weighing the economic benefits against the wider impacts”. He also reiterated the government’s plans to introduce a points-based immigration system. Further information - Click here Regeneration 19.10.07
Treasury select committee warns about skilled work; the Treasury select committee has warned that globalisation is going to affect high-skilled as well as low-skilled UK workers. It urges ministers to publish an annual review outlining global developments as it warns that growing protectionism poses a threat to both rich and poor nations. Further information - Click here Guardian 16.10.07
Employers welcome record of achievement for graduates; employers have welcomed proposals to give them more information about graduates’ academic and extra-mural records but are divided over whether the new approach should replace the established system of awarding graded degrees. A study group, commissioned by Universities UK and GuildHE and chaired by Robert Burgess, Vice Chancellor of Leicester University, has proposed that all higher education institutions should give students a standardised record of their achievements as well as a class mark. The record, known as Hears (Higher Education Achievement Reports), would include how students did in different exam papers, as well as extra-curricular activities carried out at university. The impetus for the report arose largely from employers’ complaints that grade inflation in degrees has made it harder to separate the wheat from the chaff. Last year 61 per cent of first-time degrees were firsts or 2:1, against 55 per cent in 2000. Professor Burgess said that, depending on acceptance by the universities, he would like Hears to start in 2010-11. The report was welcomed by the EEF although the Institute of Directors said that Hears “could be very useful”, but abolishing the current class mark system would impose an unacceptable burden on smaller businesses. Both Carl Gilleard of the Association of Graduate Recruiters and Stephen Isherwood, head of graduate recruitment at Ernst & Young, said that they hoped that if Hears proved robust, class marks might prove no longer necessary. Further information - Click here Financial Times 16.10.07
Ofsted warns of “alarming” threat to disadvantaged children; the first annual report of Ofsted, the education standards watchdog, says that the gap in performance between pupils from rich and poor backgrounds is “stark” and poses an “unacceptable” risk to life chances for disadvantaged children. Christine Gilbert, the chief schools inspector, focuses on the failure to close disparity in performance which was leading to an “alarming” threat that as many as 200,000 16 or 17-year-olds roaming the streets without a job or a full-time education or training place. Figures in the report show that youngsters from disadvantaged homes are five times less likely to get five top grade A* to C grade GCSEs than those from more affluent backgrounds. Schools in deprived areas were more likely to be failing- described as “inadequate”- than those serving leafier suburbs. The report also highlights continuing concern about the 10 per cent of secondaries and five per cent of primaries that failed their inspections. Nearly half of all secondary schools (49 per cent) failed to achieve anything more than a satisfactory rating- considered not good enough by the inspectors. However the overall percentage of failing schools fell from eight to six per cent. Further information - Click here Independent 18.10.07
Top public school turned down as sponsor for Pimlico academy; a bid by Westminster School, which tops education league tables on a regular basis, to take over Pimlico School and turn it into a city academy has been turned down by the City of Westminster. They have opted for John Nash, a private equity tycoon, whose company, Sovereign Capital, owns for-profit schools operator Alpha Plus Group to take over Pimlico, which has been declared a failed school by Ofsted. Several weeks ago Lord Adonis, the schools minister, urged the annual conference of the independent school heads to become involved in the academy programme. Evening Standard 15.10.07
Academies are an expensive solution say MPs; the costs of building academy schools have shot out of control, with overspends commonly running at more than £3m per school, according to a report by the Public Accounts Committee. Edward Leigh, the committee’s chairman, said that it was too early to tell whether the academies were a success after five years. While GCSE results were improving faster in academies than other schools, this may be down to the “initial enthusiasm” found in a new school and “the high level of spending on buildings”. Academies are privately sponsored state schools, created in 2002 to replace failing comprehensives in the poorest parts of England. The report finds that 17 of 26 academies incurred cost overruns averaging £3.2m, or well over ten per cent of the initial budget. The report says that although literacy and numeracy levels among academy pupils are rising, they remain low. In 2006, 22 per cent of academy pupils achieved five good GCSEs, including English and maths- less than the national average of 45 per cent. Sixth forms at most academies have not performed well so far and the report concludes that, academies appear to be a “relatively costly means of tackling low attainment”. Further information - Click here Times 18.10.07
Record numbers enrol for university courses; a record number of students have enrolled at universities this autumn, which ministers see as evidence that the introduction of top-up fees is no longer seen as a deterrent. The University and College Admission Service (UCAS) says that a total of 411,971 applications have been accepted- a rise of 5.8 per cent on last year and higher than the previous record year in 2005. A breakdown of the figures also shows an increase in applications and acceptances for maths, physics, chemistry and modern foreign language courses. In chemistry, in particular, there has been a 28 per cent increase in student numbers over the past three years. Further information - Click here Independent 18.10.07
US companies planning to offer UK degrees; profit-making US companies are planning to offer degrees in the UK, tempted by the introduction of top-up fees and the attractiveness of Britain to foreign students. Andrew Clark, chief executive of Bridgepoint Education, plans to offer degree courses in Britain “in 18 to 24 months”, and expects “a mixture of Americans and Britons and perhaps even people from other countries”. The news that Bridgepoint, whose leading shareholder is private equity company Warburg Pincus, and another US company, Kaplan, are planning to offer degrees will infuriate much of the education sector. There were many complaints when a subsidiary of the UK education company BPP became the first profit-making company to gain degree-awarding powers. Bridgepoint and Kaplan, which have US universities, plan to concentrate at first on offering postgraduate business-related degrees, where higher existing UK fees will give them greater competitive advantage. Universities UK estimate that postgrad fees payable by students average about £15,000 a year. Although employers or funding bodies pay some fees, many students have to rely on bank loans. Both Bridgepoint and Kaplan think they can undercut this. Kaplan think they can offer a “high-quality” postgraduate education for between £6,000 and £11,000 a year. Bridgepoint believes that it can keep the fees as low as £6,400. Sceptics say that the companies will struggle to make headway in the UK because they lack the prestige of US institutions such as Harvard. Financial Times 12.10.07
Small US schools tackle under-achievement; the Guardian reviews the small school movement in the USA and, in particular, the North Star Academy in Newark, America’s second poorest city. It practices what some call extreme education: ten-hour days, parental contracts and zero tolerance behaviour policies in small 200-pupil academies. The result, seen in an evolving breed of US school, is 100 per cent college acceptance, test scores to rival private schools, and south Bronx teenagers who play the viola like their Manhattan neighbours. The movement has been accused of undoing decades of progressive education. But its greatest proponents claim to be part of a new civil rights movement working to free America’s underclass from a cycle of under-achievement. At North Star some 85 per cent of pupils are African American and 90 per cent get free school meals. Last year 80 per cent were graded “proficient or advanced” in maths compared to 28 per cent in the local neighbourhood schools. Every child who attends the Kipp (Knowledge is Power Programme) academy in south Bronx, New York, play in its orchestra, the best school ensemble in the city. North Star and Kipp academy have evolved from the 3,500-strong charter school movement, who like academies in the UK, are independent schools funded by the state and allowed the freedom to set policies, including admissions procedures. North Star runs a lottery for admissions and currently has 1,800 on the waiting list. Further information - Click here Guardian 22.10.07
UK to get its first carbon-capture plant; RWE NPower has announced that it is to build the first carbon-capturing plant at a coal-fired power station at Aberthaw in Wales. NPower said that the plant, which is to open in 2010, will be a small 1MW plant costing £8.4m with further investment planned for a capture and storage demonstrator plant of at least 25MW. Carbon capture and storage technology is one of the few ways of cutting emissions from coal-fired power stations. The technology is largely unproven and there are no power stations capturing and storing their carbon dioxide at present. The government is due to launch a competition for a carbon and storage plant in November, which will use post-combustion carbon, capture technology. The government suffered a severe blow when BP pulled out of its planned plant, the most advanced in planning, citing the government’s refusal to confirm that it would provide subsidies as the reason for scrapping it. Further information - Click here Financial Times 10.10.07
UK could lead in offshore wind power generation; the British Wind Energy Association (BWEA) has claimed that the UK will become the world leader in offshore wind energy generation next year if projects now in planning go ahead. Denmark is the world leader but the UK has half of the world’s installed wind power plants currently in construction. For instance the London Array, which will be made up of 271 turbines generating one gigawatt of electricity near the mouth of the Thames was recently given the go ahead. A project involving 140 turbines is to be built off the coast of East Anglia. However the BWEA identifies two problems. One is the supply of turbines, where suppliers cannot cope with growing demand. The second is the uncertainty surrounding government subsidies and difficulties getting planning permission. Further information - Click here Financial Times 10.10.07
New study says oil production peaked in 2006; the Energy Watch Group (EWG) has produced a report claiming that oil production peaked in 2006 and will fall by half as soon as 2030. It predicts that extreme shortages of fossil fuels will lead to war and social breakdown. The claims contrast with the projections by the International Energy Agency, which says that there is little reason to worry about oil supplies at the moment. However, the EWG study relies more on actual oil production data, which, it says, are more reliable than estimates of reserves still in the ground. The group says that official industry estimates put global reserves at about 1.255 gigabarrels - equivalent to 42 years’ supply at current consumption rates. But it thinks the figure is only two thirds of that. Global oil production is currently 81m barrels a day- EWG predicts that this will fall to 39m by 2030. It also predicts significant falls in gas, coal and uranium as those energy sources are used up. According to Hans-Josef Fell, EWG’s founder and the German MP behind the country’s successful support system for renewable energy: “The world soon will not be able to produce all the oil it needs as demand is rising as supply is falling.” Mr Fell said that the world had to move quickly towards the massive deployment of renewable energy and to a dramatic increase in energy efficiency, both as a way to combat climate change and to ensure the lights stayed on. He attacked the British government for talking about climate change but failing to bring in the proper policies to drive up the use of renewables. The German policy, which guarantees above-market payments to producers of renewable power, is being adopted in many countries- but not Britain, where renewables generate about four per cent of the country’s electricity needs and two per cent of its overall energy needs. Further information - Click here Guardian 22.10.07
Crossrail go-ahead could endanger City Airport; Manny Lewis, chief executive of the London Development Agency (LDA), has claimed that the decision to go ahead with Crossrail puts the future of the London City Airport in question. The LDA is refusing to sell the airport - a parcel of land it owns at Albert Island - which has been earmarked for staff facilities and Manny Lewis says: “They can’t expand without the LDA land”. The airport has announced expansion plans to expand from almost 3m passengers a year to 8m by 2030 by doubling the number of annual flights to 143,000. However Crossrail, due to open in 2017, would cut journey times between Canary Wharf and Heathrow to 43 minutes and between the City and Heathrow to about 25 minutes. Mr Lewis said: “It raises questions about the City airport’s long-term viability. We also have this issue about our own housing agenda- we don’t want development in the Royal Docks stymied by the rapid growth of the airport, with the noise and environmental aspects”. Evening Standard 12.10.07
City plans business levy to fund Crossrail; the City of London Corporation is putting together plans for a £150m levy on large companies across London to help pay for the much-delayed £16bn Crossrail project. Negotiations between the government and business were only concluded earlier this month when the Corporation agreed to find £350m for the scheme, which is seen as a vital addition to the capital’s infrastructure. The Corporation, which will provide £200m of the sum from its own coffers, and will act as a neutral, apolitical honest broker to raise the remaining £150m from business. As things stand it is estimated that 100-150 companies will be asked to provide the extra funds, the cost proportionate to their respective sizes. It will probably be based on rateable value although retailers with multiple branches will be exempt. The Times says that although the thinking at the Guildhall is that the levy, which it is hoped will average about £1m, will not attract opposition. However there is a little-noticed sentence in the Comprehensive Spending Review that if the money is not forthcoming, compulsion could be used. However the Evening Standard says that large retailers are worried about the levy and, in particular, how long a period they will have to pay it and whether it will be capped. They are assuming 25 years and a cap of two per cent. Times 22.10.07, Evening Standard 22.10.07
500,000 new jobs for London; in spite of the turmoil in the financial markets Oxford Economics is forecasting that London is set to create 500,000 new jobs in the next decade. They also calculate that the capital makes a £12.7bn net contribution to public finances and spend £123bn on goods and services imported from other parts of the UK. It creates far more wealth relative to public expenditure than any other region. The City of London said that the Oxford Economics’ study underlined the “ever increasing requirement for more investment in infrastructure and public services”. Further information - Click here Financial Times 17.10.07
London has largest number of lone parent families; a report published by the Mayor says that 28 per cent of London’s children live in lone parent households, compared with 23 per cent in England as a whole. In inner London the proportion is even higher at 36 per cent. High levels of income deprivation and unemployment in London have a significant effect on many children’s prospects and particular groups, such as those in refugee and asylum-seeking families face even greater levels of inequality. Further information - Click here Regeneration 12.10.07
Cooper wins battle for Crossrail spur; Housing minister Yvette Cooper fought a rearguard action to stop the Treasury’s attempt to push back the south east section of the Crossrail project. A source tells Regeneration that the Treasury wanted to delay the creation of the Abbey Wood spur to save cash for future spending rounds. The late bid enraged senior government regeneration figures, who see the Abbey Wood spur as crucial to driving the renewal of that section of the Thames gateway. Regeneration 12.10.07
London faces the sharpest quandary on immigration; Tony Travers looks at the two reports on immigration and how they apply to London. He says that as a country we are addicted to immigration while simultaneously rejecting it. There has been no serious attempt to explain to the electorate why immigration is both inevitable and – if properly managed- beneficial. He looks at Gordon Brown’s “a British job for every British worker” and how it would apply in London. London has both intractable unemployment (and low employment rates) and the UK’s highest concentration of new migrants. Shortages of town planners, IT experts and nurses would have to be solved by taking on the long-term unemployed from Hackney, Tower Hamlets and Newham. Years of intervention by government has failed to help a significant minority. Some Labour politicians in London have expressed exasperation with getting many of the non-employed into work. Sir Robin Wales, the mayor of Newham, now believes that there needs to be radical reform to the social security and housing systems if unemployment is to be tackled. Reducing the number of migrants will simply create labour shortages and pay inflation. The demand on councils and other providers, highlighted by the Migration Impacts Forum report, arise because in areas that benefit from higher GDP growth derived from the employment of migrants, any additional taxation generated by them is scooped by the Treasury who take 95 per cent of all UK taxes. Ageing Britain will need as many immigrants in the future as in the recent past. New arrivals fill posts that the education system has failed to provide British people with the skills to do. Migrants pay taxes that could fund local services, but don’t because the exchequer keeps the cash. Migration and the £6bn economic growth that it brings would be more acceptable if politicians would convince the voters. Guardian 18.10.07
New railway station undersize and over budget; a new railway station at Shepherd’s Bush needs millions of pounds of extra work- because the platform is 18 inches too narrow. The station, which has cost £12m to build, is being built in preparation for the opening of the new Westfield Shopping complex at the White City, which is due to open next year. Only when work was completed was it discovered that the platforms were 18 inches too narrow and would not be able to cope with the volume of passengers. One explanation was that planners had failed to take into account the numbers of passengers that would switch from the tube on to the new station on the West London Line, which links Clapham Junction with Willesden Junction. Now a wall will have to be demolished at a cost of £7m to allow the Western platform to be extended. Westfield Shopping Town said: “We are working with Network Rail to resolve the situation and are confident that we will be able to do so”. Westfield London, which will be spread over three floors, will have boutiques, more than 40 restaurants, dozens of cafes and bars, a 14-screen cinema complex, an atrium for the arts, a medical centre, a spa and a citizens advice bureau. There are plans for 200 affordable houses, an overhaul of Shepherd’s Bush Green and a £170m upgrade of local transport links. Over 60 per cent of the units have been let. Evening Standard 12.10.07
Parliament will have to debate refit consequences; parliamentarians may be forced to decamp to alternative premises for three years to allow for vital structural works on the Palace of Westminster- the home of the Houses of Parliament. The House of Commons Commission is considering the merits of either allowing the builders to work around MPs and Lords, which could take three decades, or a faster, three-year option of convening parliament outside the palace for the first time since the second world war. It is thought that there is a ten per cent chance that the parliamentarians will be evicted. The authorities are reviewing four possible options: the QE2 conference centre; Methodist Central Hall; Church House; and the former GLC building on the south bank. Financial Times 15.10.07
Olympic foot bridge architect chosen; designs for the 55-metre wide footbridge that will provide the link between the various venues at the 2012 Olympic Park have been unveiled. The bridge, which it is estimated will take 500,000 visitors every day, has been designed by Irish architects Heneghan Pegg, who are also designing the Grand Egyptian Museum near the Pyramids and the Giant’s Causeway visitors centre in Northern Ireland. It will provide a crossing over the River Lea and link the main stadium, the aquatic centre and the basketball arena. After the Games, a central multi-coloured section of the bridge will be removed to create more green space in the park. Stepped slopes on either side of the bridge will improve access to the river. It will be one of 30 temporary or permanent walkways needed because the site is crossed by the river and various other waterways linked to the area’s industrial past. The most prominent will be a 200 metre long structure that will form the main entrance to the Games, running from Stratford town centre onto the roof of the aquatics centre. Further information - Click here Evening Standard 19.10.07
2012 Press centre could become retail depot; the media centre complex for the 2012 Games is at the centre of a row about conflicting legacy plans. Hackney Council wants the futuristic building to become a ‘digital city’ after the Games but claims that the Olympic Delivery Authority is considering plans for it to become a distribution depot and to this end has approached Sainsbury’s. There have also been suggestions that Billingsgate Fish Market could move from Poplar. Hackney is building up a campaign over the alleged plan and is desperate to prevent the high-tech facility from turning into a “brownfield” factory area. The futuristic 1.3m sq ft building, which will be divided into the International Broadcast Centre and the Main Press Centre, will house more than 20,000 journalists during the Games. Hackney are trying to lure big business as well as working on attracting Soho’s cluster of media production houses. The ODA is currently negotiating on who should build the centre with a shortlist of three: Bouygues/Development Securities; Babcock and Brown; and Carillion/Igloo. They have also denied that they have been negotiating with Sainsbury’s. Evening Standard 12.10.07
Major broadcasters join Hackney legacy group; several major broadcasters have indicated interest in becoming tenants in the Olympic media village if becomes a permanent digital hub after the Games. Virgin, Sky, Tiscali and the BBC (who have announced plans to sell the TV Centre in Wood Land) are understood to have teamed up with Hackney Council to form London 2012 Legacy to back the establishment of a media village on the contentious site. Estates Gazette 20.10.07
Olympic stadium to nearly double costs- but “in line with budget”; John Armitt, the new chairman of the Olympic Delivery Agency, has told the London Assembly that the budget for the Olympic Stadium is now £466m, a 77 per cent increase on the figures in London’s original bid document but according to Armitt “exactly in line with budget”. He said that the original bid was based on 2004 prices and did not allow for inflation or the inclusion of VAT. Designs for the stadium are due to be published later this month, but it remains unclear what uses the stadium will have after the Games. There is uncertainty too over the final cost of the Zaha Hadid-designed aquatic centre. Designs for the facility have been radically overhauled with a large pedestrian bridge incorporated into the roof structure. Only one contractor, Balfour Beatty, is interested in bidding for the contract. Asked if the costs would exceed £150m Armitt said: “I’m not sure where we are going to finish up. The important thing is that it does the job that is required. The bid book was the bid book, but the reality is we are where we are and we have to work within the budget approved by the government”. The Guardian says that the revelations will revive the debate about the accuracy of the initial budget forecasts. Guardian 11.10.07
Credit crunch takes its toll on office market; a review of the City office market says that increasing uncertainty has resulted in potential deals falling through as headline rents are seen as being too high and doubts about lending on speculative schemes increased. Examples included the withdrawal from sale of Nomura House at St Martin-le-Grand and the further delay in construction of the Shard of Glass at London Bridge due to unconfirmed funding. Estates Gazette
Elephant secures its first major tenant; Lend Lease, the developer for the revival of Elephant & Castle has secured its first major signing. It will build a 500,000sq ft campus for the London College of Fashion. The London College of Communications, which is already based in the Elephant, will also move its 9,000 students to the new campus. South Bank University is in discussions about moving. The signings will be seen as something of a coup for the developer. The Colleges of Fashion and Communications are part of the University of the Arts London who had previously signed up for two of its other colleges- St Martins and Chelsea- to move to Argent’s King’s Cross Central. Further information - Click here Estates Gazette 20.10.07
Underground cinema complex for South Bank? the National Film Theatre and the British Film Institute (BFI) have shortlisted the underground Hungerford Bridge car park as a potential venue for a new film centre. The Shell Centre is also on the shortlist. By going underground the project team, led by Drivers Jonas, hope to avoid problems with stringent viewing corridor restrictions. The centre is likely to include film theatres, a library, studios, access to the BFI archive, flexible exhibition space, seminar and education facilities, BFI offices and shops. Estates Gazette 20.10.07
Somerset House bidder drops out; Alrov Group, the Israeli investor that put the Pennethorne wing of the Grade 1 listed Somerset House under offer, has walked away. It had offered £58m for the wing of the landmark building that it had wanted to turn into a “six-star” 140-bedroom hotel overlooking the Thames. The decision is only the latest high-profile investment deal to collapse in recent weeks. Other buildings have been withdrawn from sale because of lack of interest. Estates Gazette 13.10.07
English Heritage intensifies Smithfield battle; English Heritage (EH) has outlined its opposition of Thornfield Properties’ proposals for a 380,000 sq ft office development on the site of the west wing of Smithfield market. EH are claiming that a building in a conservation area can only be demolished if the developer had failed to find alternative uses for the existing buildings. Steven Bee, EH director of planning and development, said that Thornfield had failed to “market test” the site. “We know there are viable uses for the buildings, as we have spoken to developers who could bring forward proposals. They involve reusing the buildings for other uses- whether retail, leisure or catering”. Thornfield said that the site was completely derelict and that a full-scale redevelopment of the General Market building was the only financially viable option. EH has launched an exhibition to promote alternative plans for the market. Further information - Click here Estates Gazette 13.10.07
Oval hotel turned down; Surrey County Cricket Club has its proposal for a 170-bedroom hotel at the Oval turned down by Lambeth Council. The scheme, which was a joint venture with Arora Hotels, was part of the development of a 1,600-seat stand. The Health & Safety Executive had advised Lambeth of the risk of a major incident because of the scheme’s proximity to the Kennington gas holder, there was also opposition from a local resident’s group. Surrey plans to appeal. Estates Gazette 20.10.07
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Next issue on 8th November 2007
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