Implementation

This is one of a number of pages/topics about the work of Just Space groups preparing positions and demands for what goes in the next London Plan. A list of the topics is here.

This working group will span issues about how the various policies in the Plan would be put into effect, how the effectiveness of policies is measured and how the results of monitoring the state of London will feed into later revisions of the Plan.

Some of the materials from the July community conference will be relevant.

Just Space Working Group: Implementation briefing for 4 February 2016

Background: Some issues with the current Implementation of the London Plan

Financing

Evidence prepared for the London Infrastructure Plan 2050 outlines a significant funding gap in the infrastructural needs of London’s future development. For example, the funding gap for schools, based on population growth predictions very similar to those used by the Mayor’s team for the last London Plan, indicate a 33% shortfall in funding for this essential public service. The Mayor has proposed significantly enhanced devolution of funding to London government. While an expanded capacity for metropolitan wide financing of development might solve some of the significant problems associated with London’s current project based development model (where the actual provision of and/or the funds for social/societal elements of a project must come from the added value to be realised in that project), this proposal exposes the democratic deficit in the current rather weak arrangements for accountability in London (a London Assembly which essentially only reviews and has a very limited veto power).

The problems with the project based financing model which has dominated in London for some decades are currently exacerbated by the large scale and dense developments planned across London in Opportunity Areas and Mayoral Development Corporations which rest on very expensive infrastructure requirements (for example, Vauxhall Nine Elms; Old Oak Park Royal; and developments across LB Southwark). Under the current funding model, sourcing these extensive infrastructure costs (such as the £1billion extension to the Northern line) from within the project through developer contributions (Community Infrastructure Levy (CIL) and ‘planning gain’ S106), as well as through the borrowing through Tax Increment Financing (TIFs) based on business rates uplift places an undue burden on the capacity of the relevant authority to deliver social and environmental sustainability. In the short term, using CIL funds for transport infrastructure undermines the capacity of London Boroughs to provide local social and community services and affordable housing. In some developments the CIL rate has anyway been set at a zero rate of levy. In the longer term, borrowing against future income streams undermines the ability of future generations of Londoners to provide for themselves. This model of development is not able to deliver a sustainable future for London.

 

As illustrations of the effects of this funding model, the Southwark Council schedule for Opportunity Area funding in that borough shows social, health and educational needs to be largely unfunded; and in the Vauxhall-Nine Elms development there was a substantial rolling back of commitments to social-rented and affordable housing. Too often viability agreements are produced secretively and enable developers to avoid the expected obligations; too much risk is assumed by the public purse and the social benefits of developments are eroded. An open book principle on development financing arrangements should be agreed across London.

 

We are concerned that CILs are being used effectively to fund developer gains (as infrastructure investments allow developers to build at scale and height and enhance their overall absolute gains in profit) rather than to support social and environmental requirements for the large new areas of London which will be built out over the next decades. We also point out the risk-related and inter-generational consequences of further borrowing against business rates uplift are significant, potentially undermining the capacity to deliver on the London Plan in future years. Business rates uplift depends on maintaining growth in economic activity, and there is significant jeopardy of repeating borrowing on this basis across London as it is an integrated functional economic area, where interdependent fortunes mean any downturn will potentially undermine the feasibility of all TIFs across the city at the same time.

 

Delivery

Statements in the London Plan regarding participation from different stakeholders currently have neither guidance as to effective participation, nor monitoring to ensure its implementation; a strong statement regarding principles and procedures of effective community engagement needs to be included in the London Plan. The GLA assumes a larger role in planning in collaboration with London Boroughs in Opportunity Areas; and assumes planning authority in Mayoral Development Corporations. Strong lines of democratic representation need to be maintained in all cases, including in relation to London Boroughs and their democratically agreed plans, and in relation to meeting the expectations of our proposed principles of community involvement. The provisions for assuming these responsibilities – whether to demarcate an Opportunity Area or to establish a Mayoral Development Corporation – should meet the standards of public involvement and the statutory purposes and duties of the GLA and Mayor laid out in the GLA Acts. These should be in line with the criteria of the GLA Acts i.e. promoting environmental and social sustainability, equality of opportunity, not causing harm to the health and wellbeing of Londoners, taking a balanced approach regarding economy, social needs and the environment; and in line with the agreed strategic aims of the London Plan e.g. valuing London’s diverse population and lively neighbourhoods.

Some Points for Debate:

  1. A sustainable funding model for development should be considered, with effective use of public assets (land) to support affordable housing provision; an open book approach to viability assessments; and the front-loading of social infrastructure and affordable housing in all developments. Borrowing against future uplift should be strictly limited and CIL and business rates should be used to ensure the delivery of socially and financially sustainable developments, rather than for expansive infrastructure delivery which only enhances developer profits.

 

  1. Governance arrangements for delivery of the London Plan, demarcating OAs and establishing MDCs, should meet expectations for public consultation and in the purposes and duties of the GLA Acts, and conform to agreed principles of effective public involvement.

 

  1. Key Performance Indicators (KPIs) within the London Plan as monitoring measures need to ensure that principles of community involvement are addressed.

 

  1. The impact of the delivery mechanisms (Opportunity Areas; MDCs; financial models) should be routinely evaluated through KPIs. Evidence is currently not prepared to evaluate e.g. the vast social and health impacts of Opportunity Areas in terms of social displacement and lack of affordable housing.

 

Questions

  1. Should there be a Key Performance Indicator (KPI) to monitor effective community participation in the preparation and implementation of the London Plan?
  2. Should financing models be reviewed and options sought which meet the required balanced goals of the GLA Acts, which are sustainable in the long term and which enable delivery of sufficient affordable housing and social facilities?
  3. Should the governance arrangements for delivery of strategic large scale development be aligned with the expectations of the GLA Acts in terms of consultation with members of the public and the achievement of sustainable development etc.; effective working with democratically elected boroughs and their plans for the areas; and early effective public participation in planning and delivery?

 

 

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