Small
business; there were a number of announcements relating to small
business and enterprise. The long discussed proposals for stimulating enterprise
through summer camps, teaching enterprise in schools and scholarships to US
business schools will start this summer; the City Growth programme is to be
extended; there are changes to the finance schemes including Venture Capital
Trusts and Enterprise Capital Funds. The Chancellor also announced a dramatic
cull in the number of business support schemes, from 3,000 to “no more
than” 100 by 2010. Despite business criticism of the Regional Development
Agencies’ handling of Business Link services, the RDAs are to be given
increased scope to promote women’s enterprise.
Cities; a paper on England’s cities was published
alongside the Budget. It examines what measures need to be taken to close
the “persistent gaps” between regions and how the economic potential
of cities can be enhanced. It concentrates on the 8 core provincial cities
but there will be summits in smaller towns and cities in the run up to the
forthcoming local government white paper, which will look at restructuring
and reform of councils.
Further Education; in addition to the announcements about
schools there were a range of measures to strengthen further education and
re-training including a second chance programme for those who had struggled
at school, a programme aimed at “low-skilled women” and the Adult
Learning Grant, which, in an echo of Individual Learning Accounts, will give
bursaries to adults on low incomes. The White Paper on FE, which was launched
this week, gives young people from 19-25 a new right to free education to
A-level standard. Employers will work with education brokers to ensure that
courses are tailored to their needs and successful colleges will be encouraged
to expand to become centres of learning. The private sector may be brought
in to widen availability.
London issues; there were several London-specific items
in the Budget documents. In his speech the Chancellor announced a new body
to promote London as a financial centre to operate under the auspices of the
reformed UK Trade and Industry (UKTI), which will also have new roles in promoting
the UK as a home for technological investment as well as increasing trade
activities with China and India. The second London document is a study of
the London labour market. Additionally the Chancellor gave further details
on the plans for 20,000 civil service jobs to leave the capital by 2010.
North Sea oil revenues cut back; the small print of the Budget reveals that the Treasury has written off three-quarters of the extra revenue that it had hoped to raise from the oil companies in 2006-7 after its recent increase in North Sea oil taxation. The Budget red book shows that the Treasury has accepted that production is likely to fall in the next financial year and that the anticipated tax revenues need to be cut by £1.5bn - three-quarters of the £2bn that the Chancellor was expecting after doubling the supplementary corporation tax on North Sea oil profits. The change brings the Treasury into line with outside analysts who had forecast that the extra tax burden would impact on production levels. Financial Times 25.03.06
The
cost of caring for the elderly will double; the Sunday Times looks
at the likely findings of the report on caring for the elderly being undertaken
by Sir Derek Wanless for the King’s Fund. It says that spending on the
care of the elderly will have to double over the next 20 years to cope with
the surge in the numbers of sick and disabled old people. The report forecasts
that the number of people aged 85 and over will increase by two-thirds while
the figures for sick pensioners will rise even more steeply. Contrary to general
belief increases in the number of years of good health have not kept pace
with improvements in total life expectancy with the result that the number
of elderly sick people will rise by 57-69 per cent over the next 20 years.
Further information-King's Fund - Wanless Social Care Review Sunday Times
26.03.06
EU plans setting up a business within seven days; a new
EU plan to ensure that entrepreneurs should be able to start a business within
a week anywhere in Europe was adopted at the Council meeting held in Brussels
on March 23-24. Gunter Verheugen, the EU Enterprise Commissioner, said that
in the past the Union had been too concerned with helping big business and
paid too little attention to the needs of small companies. The heads of government
committed themselves to create a system of one-stop shops or similar arrangements
with start-up fees as low as possible and the recruitment of the first employee
not involving more than one public administration point. According to the
Centre for European Reform in London current start up times vary considerably
from less than two weeks in Denmark, Finland, France, Italy and the Netherlands,
to 54 days in Portugal and up to 60 days in Slovenia. Financial Times
21.03.06
Family firms ‘perform poorly’; a five-year study
of British competitiveness finds that half the difference between UK firms
and those in the US, France and Germany is accounted for by second or later
generation family firms. Indeed the results of the study, which was undertaken
by the Centre of Economics Performance at LSE and McKinsey, are so strong
that it has convinced Nick Bloom, one of the authors, that Gordon Brown should
scrap the 100 per cent inheritance tax relief given to large family businesses.
Further information-Bad management practices in family firms: why we need
to reform the UK's inheritance tax - News - Press and Information Office -
LSE Financial Times 15.03.06
DTI may take control of magazine distribution; the FT says that the Department of Trade and industry (DTI) is considering taking control of how magazines are distributed away from the Office of Fair Trading. It is understood that the DTI has held talks with the National Federation of Retail newsagents over a possible industry solution based on a code of conduct within the newspaper and magazine distribution and publishing industries overseen by an ombudsman. In 2004 the magazine and newspaper publishers and distributors requested that the OFT look at the existing arrangements where there are a few wholesales, who in return for exclusive rights, provide universal delivery. There has been concern that this may fall foul of EU competition legislation but equally that any opening up of the market could result in the loss of 9,000-12,000 small and independent retailers. The OFT has been looking at the issue for two years although it did give a draft ruling that because of time sensitivity the arrangements could stay for newspapers but not for magazines. Financial Times 13.03.06
Red tape is a myth says the TUC; the TUC has hit out at
leading business groups who complain about red tape for exaggerating its cost
and for failing to state which regulations they want to see abolished. The
report, Slaying the Red Tape Myths, singles out the employers’ groups
complaints about the costs of the minimum wage and goes on to claim that they
are promoting a “red tape crisis” to dissuade the government from
improving working standards, consumer rights, decent business ethics and protection
for the environment and safety. Guardian 17.03.06
COMMUNITY AND BUSINESS AFFAIRS
Brussels
sides with business on CSR; the EU has sided with business in excluding
trade unions and NGOs from a new European corporate social responsibility
initiative launched on March 22. The pro-business European alliance for CSR
will be a loose “political umbrella for new and existing CSR initiatives
by large companies and small and medium-sized enterprises”. According
to Gunter Verheugen, the Industry Commissioner (pictured right), the Commission
has moved to a pro-business view on CSR over the past year. “Originally
the Commission’s plans were very different. The department responsible
wanted to publish naming-and-shaming lists (of companies) and to create a
monitoring system for the implementation of the CSR principles. I had to “halt
this enthusiasm for new regulations”, Paul de Clerk of Friends of the
Earth complained, “Originally the Commission wanted to improve social
standards but now it only wants to boost business competitiveness”.Financial
Times 13.03.06
Fund
manager’s report growing pressure on governance; a survey of
fund managers by Mercer Investment Consulting reports that there is growing
pressure from clients to integrate environmental, social and corporate governance
(ESG) issues into investment decisions. It says that almost two-thirds of
the 157 investment managers surveyed cited the environmental and social effects
of globalisation as the most important investment factors followed by corporate
governance and terrorism. Environmental issues are seen as growing in importance
over the next five years. Financial Times 13.03.06
Reputation
vital to financial results; the latest Return on Reputation survey
undertaken by Hill and Knowlton in conjunction with MORI says that 90 per
cent of analysts agree that a company that fails to look after its reputation
will ultimately suffer financially. On a global level quality of management
(53 per cent) and strategy (12 per cent) were the single most important factors
cited as driving reputation other than financial performance. However in Europe
the analysts gave more importance to chief executives with a focus on issues
in society and who act as industry spokespersons. Financial Times 20.03.06
Business groups seek OFR safeguards; leading business groups
have told the official consultation on narrative reporting that they need
legal safeguards to ensure that they can make meaningful statements on performance
and prospects. The 13 groups, that include the CBI, the Institute of Directors,
the National Association of Pension Funds and the Association of British Insurers,
say, “We are all agreed that the threat of litigation, whether real
or perceived, is a serious impediment to the delivery of meaningful narrative
reporting by company boards”. There is concern that listed companies
could resort to legalistic “boilerplate” statements if directors
are concerned about facing lawsuits for failing to identify risks or making
comments that turn out to be inaccurate. Another group, representing leading
investment trusts and pension funds, urges the government to make it clear
what it regards as best practice in narrative reporting. The consultation
period ended on March 24th. Financial Times 24.03.06
Are the Tories investing too much in being ‘good’? the Guardian carries a small profile of Steve Hilton the marketing guru, who is advising the new Conservative Party Leader David Cameron. Written by James Harkin, the piece says that Hilton in his 2002 book Good Business argues that “Wouldn’t it be good business for business to be good” - meaning that brands can be used to reintroduce politicians to their electorate, and to engineer social change. Companies, for their part, might find that doing good works helps the company to stand out from the crowd and improves profitability. This was the thinking behind what the Guardian calls the ill-judged “Campaign for Capitalism” unveiled by Cameron last November. However if corporations are to become our moral guardians, is there room left for real citizens? The result is to outsource political activism to corporations in return for the price of their products. It is only because of the weakness of politics that brands such as Nike are able to intervene to pick up the pieces of our ethical life. Now, Harkin argues, the Tories are in the humiliating position of following their lead. Guardian 25.03.06
Cities
to go to the centre of the economic agenda; a joint ODPM-Treasury
paper on the economics of cities was published alongside the Budget on March
22. The paper, which will be the first in a series of urban policy announcements
over the next 18 months, is the first phase of the government’s response
to the State of the Cities report, which was published earlier in the month.
David Miliband, the Communities Minister (pictured right), announced the news
at the press conference for State of the Cities when he also announced a new
round of city summits for urban areas outside the 8 core cities. At the previous
summits, the core cities were invited to submit business cases covering plans
for transport, skills and employment designed to boost economic growth. The
ODPM will be reacting individually to the core cities in May, June and July.
It is planned to include the spending outcomes in the 2007 Comprehensive Spending
review. Commenting in the Estates Gazette, Tom Bloxham of Urban Splash, said,
“Clearly the city regions-places like Manchester and Birmingham are
the drivers of economic growth. But administrative boundaries don’t
always follow economic boundaries. It’s ridiculous that 10 different
councils are operating round Manchester city centre”. Regeneration
10.03.06, Times 23.03.06, Estates Gazette 25.03.06
Chambers get agitated by city plans; the British Chambers of Commerce have expressed concern about the proposals for city-regions arguing that they must have strong, accountable leadership rather than “cobbled together solutions”. In an interview with Regeneration, David Frost, the Director-General of the British Chambers, warns that nothing can be accomplished without significant changes to local government structures. Councils in Manchester and Birmingham whilst seeking greater powers and spending freedoms have rejected the idea of an elected city-regional mayor and called for a board of council leaders to run the proposed city regions. Although he does not formally endorse the idea of elected mayors, Frost comments favourably on the record of Ken Livingstone as London’s mayor. He also calls for greater involvement by business and argues that financial reimbursement should be considered. Regeneration 10.03.06
FT survey shows growing economic divide; a survey undertaken
by the FT of the latest official regional economic activity figures shows
that the gap between private sector growth in London and the South-East and
the rest of the country has grown so wide that surging public spending has
not stopped the north-south divide deepening. While Gordon Brown has been
Chancellor, annual real public sector growth has exceeded 4 per cent in Wales,
the North-East and the Midlands whilst private sector growth has lagged far
behind. In Scotland, Wales and the North-East, the private sector has expanded
by less than 1.6 per cent after inflation. In contrast, the high productivity
regions of London and the South-East have enjoyed average private sector growth
of more than 3.5 per cent for every year since 1997. The FT survey says that
with the rapid growth of public expenditure due to end in two years, the outlook
for the poorer regions of the UK is all the more problematic. Financial
Times 20.03.06
Biggest jobless jump for 13 years; a much worse than anticipated set of unemployment figures for February caused concern amongst City analysts and doubts about the Bank of England’s optimistic forecasts for strengthening economic conditions. The leap of 14,600 in claimant unemployment was the twelfth monthly rise in the past 13 months and was the largest since the aftermath of the last recession in 1992. The increase took total unemployment to 919,700 - the highest claimant count since October 2003. Even the government’s preferred Labour Force Survey showed a rise of 37,500 to total 1.53m, or 5 per cent of the workforce. James Philpot, of the Chartered Institute of Personnel and Development, said that women had been the main casualties as “the effects of last year’s slowdown spread beyond manufacturing to consumer services…notably the retail and the hotel and restaurant sectors”. A leader in the FT said that the figures were a consequence of last year’s slowdown, when output grew at its slowest rate for 12 years with no decline in employment and that with signs of an increase in industrial output the figures should therefore be seen as evidence of necessary adjustments by employers. The level of 5 per cent is still one of the lowest in Europe and there are signs of buoyancy in the labour market, especially the over-50s. However unemployment has been creeping up amongst young people, especially 16-17-year-olds, over the last nine months. The Bank of England Monetary Policy Committee should resist calls for lower interest rates, unless what appears to be a blip turns out to be more serious - especially with strengthening indications of a revival in the housing market. (See also Tower Hamlets’ problems in London ) Financial Times 16.03.06
Fewer employers report skills gaps; the proportion of employers
reporting that employees lack crucial skills has fallen by over a quarter
over the past two years according to a Learning and Skills Council survey
of 70,000 companies. They attribute the change to increased investment by
employers and a rise in the number of young people taking FE and vocational
courses. According to the LSC “slightly fewer than 1.3m workers were
described as nit fully proficient” last year compared to 2.4m in 2003.
Financial Times 13.03.06
TUC
claim that men want flexi-time; a report prepared for the Trades
Union Congress (TUC) says that men are a substantial and fast-rising proportion
of those seeking their employer’s permission to work flexi-time with
shorter hours or fewer days. In the past two years 1.2m men, or around 10
per cent of the male workforce, have asked if they can work flexibly. These
figures are far less than the 2.3m women (19 per cent) who have made the same
request but are nonetheless a major increase on previous years. According
to the report, which has been written by three academics, four in ten of the
men are not granted all of the changed hours they have requested compared
to three in ten for the women. One in seven men and one in ten women have
their requests rejected completely. Observer 12.03.06
‘East Europeans shame idle Britons’; a report
produced by the Home Office says that Britain’s lazy and idle workers
are being put to shame by an army of highly motivated East European immigrants.
The report, Employers’ Use of Migrant Labour, says that “Migrant
workers ere considered by employers to have a number of advantages, most notably
their work ethic, which employers found more acceptable. They were cited as
harder working, more reliable and motivated than domestic workers. Without
them some businesses in the low-skill sector claimed they would not survive”.
More than 345,000 East Europeans have arrived since the EU expansion on May
1,2004- the largest group of 200,000 coming from Poland. Times 15.03.06
Mothers
face worst job prospects; according to a study commissioned by the
Equalities Review mothers face greater discrimination in finding a job than
disabled people, Asian women and the elderly. Women returning to work after
starting a family face the highest ‘personal employment penalty’
of any group in society - they are around 40 per cent less likely than the
average white, able-bodied man to be offered a post says the study that was
undertaken by Professor Richard Berthoud of Essex University. The Equalities
Review, was commissioned last year by the Prime Minister and is led by Trevor
Philips (pictured right), the Chairman of the Commission for Racial
Equality. Observer 19.03.06
Approval
for FE White Paper; despite trumpeting on its front page the Further
Education White Paper’s switch of funds away from evening classes to
help pay for a “crystal clear” focus on skills, the Times approves
of proposals in its leader column. It says that FE colleges play a largely
uncherished but important part in the lives of six million trainees, learners
and self-improvers. As such they perform a useful social role. Increasingly,
says the Times, that is not enough. It says that the starting point for the
Government were two studies that paint an alarming picture of the nation’s
skill’s gap. More than a third of working-age adults lack a school-leaving
qualification. One in six lacks the literacy skills expected of an eleven-year-old.
Britain ranks 24th out of 29 developed nations regarding the proportion of
young people staying in school or training post-16. The plethora of fascinating
courses offered by the average FE college is impressive…but faced with
the economic challenges of the coming decades, such a level of generosity
looks misguided. The thrust of the White Paper - that FE colleges should replace
the “pleasure and leisure” with a “core economic mission”
is strategically correct. Times 28.03.06
Schools
face headteacher crisis; a former aide to Charles Clarke, when he
was Education Secretary, and also to the No 10 Policy Unit has warned that
a major leadership crisis is facing Britain’s secondary schools. Robert
Hill is quoted in the Observer as saying that with growing pressures more
and more headteachers were leaving their posts or retiring early. A third
of headteachers’ jobs were currently being readvertised because schools
were unable to fill the posts and one in five schools were without a permanent
head. The data is taken from a report that Hill has prepared for the Association
of School and College Leaders. Observer 12.03.06
UK in emissions battle with Brussels; the UK government looks set to provoke a row with the EU over greenhouse gas emissions by deliberately missing the deadline for allocating emission allowances to UK firms. Under the terms of the EU emissions trading scheme, all member states must submit drafts of their “national allocation plans”, detailing the amount of carbon dioxide they propose to allow businesses to emit for the second phase of the scheme, by the end of June. However the UK government has said that it will submit its plan later in the summer. UK companies have been told that they have until June 6 to submit their data on carbon emissions to DEFRA. The UK wants to raise the amount of carbon dioxide British business can emit under the first phase of the scheme that began in 2005. It believes that the UK has been put at a disadvantage by being the first to submit its plan in Phase 1 whilst other member states submitted far looser limits. The EU Commission, which launched legal proceedings against countries that missed the deadline for Phase 1, is concerned that other member states will seek to bend the rules if the UK succeeds in doing so. Financial Times 13.03.06
Emissions
targets for business missing in review; after nearly a year’s
delay the government has published its climate change programme review. but
without any targets for business to cut greenhouse gas emissions, although
it still insists that it could still fulfill its Kyoto protocol pledge to
cut its commitment to cut emissions of a basket of greenhouse gas emissions
by 12.5 per cent by 2012. The dispute is alleged to be on the level of annual
CO² emissions by industry. Margaret Beckett, the Environment Secretary
(pictured right), wants a 3m tonne ceiling whilst Alan Johnson, the Trade
and Industry Secretary, is backing a ceiling of 9m tonnes. Speaking on the
Jonathan Dimbleby programme Margaret Beckett said, “We are not abandoning
our 20 per cent. We do believe that it is something we can achieve”.
However she added that although the review would “certainly move us
very much in the right direction” it was “very much not the last
word” on climate change. Rather than give any clear signals the new
paper outlines a series of policy options. The DTI has already called for
a broadening of the emissions trading scheme after 2012 to include surface
transport. Guardian 27.03.06, Financial Times 27.03.06
Microgeneration
strategy; the Department of Trade and Industry have published proposals
for a microgeneration strategy alongside the climate change review. Giving
details of the proposals Malcolm Wicks, the energy minister, sees millions
of homes, schools and other public buildings being turned into mini power
stations which would, in turn, promote renewable energy. Householders, schools
and businesses would be offered grants to install wind turbines, solar panels,
“ground source heat pumps” (devices that can extract energy from
under lawns and flower beds) and other systems to generate their own electricity
and export it to the national grid. The proposals follow on the chancellor’s
proposals to spend £50m on low carbon buildings. The overall aim is
the microgeneration could provide up to 40 per cent of the UK’s electricity
needs by 2050. Sunday Times 26.03.06, Financial Times 27.03.06
Almost half of London’s businesses support air travel levy; the London Chamber of Commerce and Industry has revealed that 44 per cent of its member companies support the idea of higher taxes on the cost of flights. They support the taxes being placed on aviation fuel and air tickets to alleviate the environmental damage wreaked by aircraft. Ironically the news comes as London businesses are lobbying for an expansion at Heathrow to prevent Britain’s biggest airport losing ground to European rivals. The government has told BAA that Heathrow has to lower its pollution levels before it can consider a third runway. It has emerged that Heathrow has been overtaken by Munich in terms of destinations served and now lies fifth behind Frankfurt, Paris and Amsterdam. Guardian 21.03.06
Tower Hamlets has lowest employment rate in the UK; only 54 per cent of the working age population of Tower Hamlets is in employment compared to a national average of 74.5 per cent- the lowest employment rate in the UK. A feature article in the FT that it is one of the ironies of life in the borough that some of Britain’s most deprived communities reside next door to Canary Wharf and the City of London. Over a quarter of the population have no qualifications, compared to a national average of 15 per cent, whilst some 46.7 per cent are from ethnic minorities and 55 per cent of those are under the age of 25. Over 50 per cent of the borough’s population lives in social housing. According to local employment advisers, low aspirations can be added and one of the main problems is to convince youngsters that there are opportunities for them in places like Canary Wharf. Another problem is that large numbers regularly move in and out of the borough making it difficult to forge long-term relationships with employers. FinancialTimes 16.03.06
Motor Show returns to London after 30 years; General Motors have announced that they are to stage the global launch of the new Corsa at the London Motor Show being held at the ExCel exhibition centre in Docklands from July 20-30. At the same time GM said that one of the reasons for choosing London was that it is “the most exciting city in Europe”. The absence of new car launches had been one of the reasons given for the attendance dropping by half to 450,000 during the show’s time in Birmingham. BMW, Mazda and Ford’s Land Rover subsidiary are also known to be considering launches in London and taken together with plans for late-night pop concerts and live motoring shows the organisers are hoping to attract at least 500,000. To give the event additional status the Prime Minister and the Mayor are to host a reception for motor industry chiefs on the press day. Financial times 25.03.06
King’s Cross gets the go-ahead; plans for the regeneration of 67 acres of one of the most neglected and rundown areas of London to the north of King’s Cross have been given the go ahead by Camden Council. The scheme, which comprises 4.5m sq ft of new offices, 1,946 flats and other facilities including two swimming pools, two new schools, two health centres, a nursery and a crèche, will not be completed until 2020. Roger Madelin, Chief Executive of Argent (pictured right), the private property company carrying out the development on land owned by London and Continental Railways and Excel, said, “We’re going to be carrying out the largest new build in central London on one contiguous site for more than 150 years”. Other features will include the restoration of 20 historic buildings, the new Eurostar terminal at St Pancras as well as a new station extension for the Midland Mainline and a through station for Thameslink. Financial Times 11.03.06
Retailing starts to pick up; there have been a number of
mixed signals on the state of the London economy. Retailing sales figures
for London show a 9.6 per cent increase for February compared to the previous
year according to the London Retail Consortium. This is the biggest increase
since the survey began in October 2002 and compares with a national figure
of 0.6 per cent. This figure was backed up the latest report on headline business
activity from the Royal Bank of Scotland, which showed London at 60.8 compared
to a national average of 57.5. On the other side of the coin the Bank of Scotland
warned that London’s economic growth could slow to about 2.6 per cent
in the second half of the year whilst the London Chamber said the recovery
was encouraging but coming from a very low base. Further information-London
Retail Consortium - News Evening Standard 13.03.06
Savile Row tailors mount a demonstration; over 200 tailors based in Savile Row have mounted a demonstration to protest about plans for rising rents and for a commercial free-for-all, which would mean that the street lost its unique status. Independent on Sunday 26.03.06
Waterloo
set for £1.3bn facelift; Network Rail have announced plans
for a £1.3bn redevelopment for Waterloo station which would see the
concourse moved to below the present platforms, the platforms extended and
the track outside the station remodelled to give greater flexibility. It is
estimated that over the next 10 years passenger traffic will increase by 20
per cent and even with the longer platforms and the integration of the former
Eurostar terminal the plans only allow for an increase of 10,000 passengers
in the rush hour. To counter this the revamped station will also make use
of new ticketing technology to allow passengers travelling into Waterloo outside
8am-9am to pay lower fares. Independent 22.03.06
More
jobs in the City than during dotcom boom; the Centre for Economics
and Business Research (CEBR) says that the number of “City-type”
jobs, in financial and professional services rose by 11,600 last year to reach
327,600- beating the record established at the height of the dotcom boom.
The CEBR also forecasts that the number of jobs will increase this year and
next. Jonathan Said of CEBR says, “The City has continued to strengthen
its position as the home for European merger and acquisition activity”.
The big growth areas in City jobs are in investment banking as well as equities
and bonds, professional services and corporate finance. Another CEBR report
forecasts a 7.1 per cent rise in London house prices this year - partly due
to the ripple effect of the boom in the City. In a separate report undertaken
by the Financial Times on the New City (see below) 10 per cent of the professional
staff come from outside the EU and the US, the proportion from continental
Europe is 20-25 per cent and less than 10 per cent for US nationals. UK nationals
on average account for around half the banks’ workforce. Sunday
Times 26.03.06
The
New City as an engine of growth; the FT publishes a special supplement
on what it calls “the New City” as it starts a whole week of features
on the theme. It says that there is a certain swagger about the City of London
these days as it strengthens its position as Europe’s leading financial
centre and as a magnet for capital and talent from around the world. This
is manifest both in the changing skyline and the way that the City has grown
geographically to the West End and to Dockland’s new East End. However
it cannot afford to be smug and that is one of the reasons why the Chancellor
announced a new initiative to bolster the City’s international position
in last week’s Budget. Financial Times 27.03.06
Delivery contractor can expect £100m turnover; David Higgins, Chief Executive-Designate of the Olympic Delivery Authority (pictured right) has revealed that over 60 companies have been in contact over the contract to manage the delivery of the planning, design, construction, commissioning and maintenance of the Olympic venues and park. He has also estimated that the value of the work will probably be £100m in turnover over the six years of the contract. The winner will be asked to commit to keeping important personnel in place and also to rule themselves out of bidding for subsequent construction contracts. David Higgins points out that “they can’t police themselves”. The details of the contract will keep well clear of fixed-pricing and the culture of penalising failure, which have plagued the construction of the new Wembley stadium. Financial Times 13.03.06
Ken gets upset about Stratford (again); speaking at the MIPIM exhibition in Cannes Ken Livingstone, the Mayor, again expressed his anxieties about the consortium due to build Stratford City, which is due to house the majority of the Olympic Village. He absolved most of the partners including Westfield, the Australian shopping centre giant, which owns 25 per cent, as well as Stanhope and Sir Stuart Lipton, who hold 12.5 per cent each. His fire was directed towards the Reuben Brothers who own 50 per cent of the 180 acre site. The worry seems to be that as yet there is no sight of the detailed proposals for the first phase of Stratford City, which Newham Council originally expected in January. The date has been put back to March 31 following the negotiations about the Olympic athlete accommodation. Livingstone reminded his audience that the GLA had reserve CPO powers and that “If any part of the consortium looks like it’s going to fail to deliver we will step in and we will take over”. Estates Gazette 18.03.06
Reuben
Brothers ‘outraged’ by Livingstone’s remarks; the
Sunday Times gives a different version of the row. It says that the alarm
bells started ringing following a meeting at Newham Town Hall when Westfield
said that they were unable to work with Reuben Brothers. Following the meeting
Sir Robin Wales, Mayor of Newham, said, “There are clearly tensions.
We suggested they go away and resolve this very quickly. If they don’t,
there has to be protection for the Olympics”. Worried about any delays
in the development of the site Livingstone then made his remarks praising
Westfield and attacking the Reuben Brothers. However London and Continental
Railways (LCR), which owns the land and has a development agreement with each
of the three main shareholders has come out in defence of the Reubens saying
they can’t understand why they have been singled out. Both the Reubens
and Westfield have offered to buy out the other partners with the prize being
a £3.5bn scheme including 4,500 houses - 2,000 of which will be used
as the Olympic Village - offices, hotels and a huge shopping centre. NM Rothschild
has been asked to mediate and, if necessary, organise a ”shoot-out”
where the scheme would go to the highest bidder. However in yet a further
twist the auction has been postponed following remarks about the Reuben Brothers
by the Mayor which have been described as “destructive and offensive”
by Stephen Jones, managing director of LCR. Sunday Times 19.03.06, Evening
Standard 20.03.06, Estates Gazette 25.03.06
Multiplex
win 43-storey tower at the Elephant; Multiplex, the Australian property
group building the new Wembley stadium, has been given approval to build a
43-storey residential tower at the Elephant & Castle. The tower, which
is being developed with Espalier on the site of Castle House in Walworth Road,
will be a crucial element in Southwark Council’s £1.5bn regeneration
plans for the area. There will be another 9 apartments in an adjacent five-storey
pavilion. It will include 399 apartments and will have wind turbines, which
will reduce energy costs by 40 per cent for each flat. A second scheme by
Oakmayne Properties, was also approved in New Kent Road. This will include
a 214-bedroom hotel, a five-screen cinema, 219 homes, restaurants and shops,
which will spill out on to a new market square. It will also offer retail
space for existing businesses in the Elephant & Castle. Work on both projects
is due to start by the end of the year. A decision on the choice of a preferred
partner for the large-scale residential and commercial developments to replace
the shopping centre and surrounding area will be made in September. Times
23.03.09, Estates Gazette 25.03.06
London has the most expensive flats in the world; according
to research by Knight Frank prime new-build flats in London are selling for
the highest price per square foot in the world. They estimate that new-build
or refurbished flats in good locations sell for £1,744 per sq ft in
London - £200 per sq ft more than the second most expensive location,
Monaco and 70 per cent more expensive than New York. Estates Gazette 11.03.06
Tall buildings provide ‘nightmare scenarios’; a leading security expert has warned that London’s new skyscrapers are making business more vulnerable to terrorist attack. Pete Brown, senior risk auditor with G4S Security, said, “These very tall new buildings made of mirror glass cause a headache from the counter-terrorist point of view”. He added that tall buildings still represented a potential “iconic” target, and both the scale and the multi-tenancy occupancy complicated effective command and control evacuation procedures. However another security adviser, John Wyatt of the SDS Group, said that the risk of terrorist attack should “not be exaggerated”. Current regulations meant that the design and construction of tall buildings in the UK, as in the US, were more robust and responsive to safety needs. Financial Times 20.03.06
Plans to redevelop “Threepenny Bit”; St Martins Corporation, the property arm of the Kuwait Investment Office, has announced that it is working up plans to redevelop the so-called Threepenny bit office building next to St Paul’s tube station. The proposal, which depends on acquiring additional land next to the building from the Corporation of London and the Crown, is for a 100,000sq ft six-storey scheme to be designed by John McAslam and Partners. Estates Gazette 18.03.06
Canary
Wharf gains more corporate HQs; KPMG has announced that it is take
a 400,000 sq ft bespoke headquarters at Canary Wharf in 2009. The news follows
the decision by BP to move to Canary Wharf by the end of the year. Estates
Gazette 25.03.06
Swiss Centre to be transformed; Northern Irish developer McAleer & Rushe has submitted plans to transform the Swiss Centre in Leicester Square into a glass-fronted, 10-storey hotel, retail and leisure complex. However even though the developers say that their plans are in line with Westminster Council’s vision for Leicester Square their plans do not include a Chinese community centre, which was called for in the 2002 planning brief. The lease of the existing centre expires in 2008. Estates Gazette 18.03.06
40-storey residential block for Isle of Dogs; Chalegrove Properties have been granted planning permission to develop a 40-storey residential tower at 22 Marsh Wall on the Isle of Dogs. The scheme comprises 700 flats in two tall blocks of 40 and 27 storeys, as well as two eight-storey blocks. There will be 25,200 sq ft of offices and shops. The Greater London Authority concluded that “the very high design quality of the development will be a positive marker for further regeneration of the Isle of Dogs, and is a high-quality scheme in all respects”. Estates Gazette 11.03.06
Dickens
and Jones to split into four shops; the Shearer Property Group, which
has taken over the 30-year lease of Dickens and Jones department store in
Regent Street, plans to split the retail element into four shops. H&M
have already been confirmed and it is believed that the other three tenants
will be Jigsaw, Nokia and Uniqlo. Estates Gazette 11.03.06
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