-David Fell (economy)

I have arranged my comments – which are predominantly concerned with the economic aspects of the Plan – under five headings:

  • over-arching remarks
  • remarks regarding the ‘Strategic Overview’ (chapter one) of the Plan
  • remarks concerning the analysis presented in chapter four (‘London’s Economy) of the plan
  • suggestions in respect of the policies proposed in chapter four
  • additional remarks concerning the links between the London Plan and the Economic Development Strategy

Over-arching remarks

I make four general comments:

Firstly, I should like to congratulate the team that prepared the current draft document. It is, in many respects, an extremely impressive document and many issues I consider to be important to the long term future of London are given detailed attention. In particular, the attention to both climate change and quality of life are significant.

Secondly, the public consultation draft, particular those elements concerned with London’s economy, seems genuinely to have developed since the Assembly consultation draft: coverage is now broader and deeper, particular pieces of argument seem to have been enhanced in key places, and certain issues that had been absent from the previous draft have been incorporated. Again, those responsible are to be congratulated for both the willingness and the effort required to make these changes.

Thirdly, and from a different perspective, the Replacement London Plan continues a commitment towards mainstream economic growth in the short, medium and longer term. The rationale for this is set out in paragraphs 1.15 through 1.23, and includes the statement that “Without economic growth, the situation would be dire for London”.

It is understandable, given the prevailing orthodoxy, that the Plan should adopt this position; and if London is to make a case for its ‘fair share’ of public investment in the next few years then it obviously needs to be seen to be needing that investment. There are increasing reasons to suppose, however, that quality of life and environmental sustainability are not, in fact, compatible with endless economic growth[1], and that if we are looking forward over a twenty year horizon we should be at least considering alternatives. As the attached paper argues, the pattern of London’s development over the next few years will significantly determine its trajectory out to 2050, a point by which very significant changes in our lifestyles and economy will have to have taken place if catastrophic climate change is to be averted. It remains, in my view, a responsibility for London to be exploring what this future economy might need to be like, and this is a responsibility that the present Replacement London Plan has avoided.

Fourthly, there is a significant mismatch throughout the Replacement London Plan between some of the analysis and commentary in the main body of the text, and the propositions that appear as prospective policies. There are, for example, some propositions in the main body of the text – “tackling the unacceptable health inequalities that exist” and “making sure all Londoners can have access to good quality and healthy food” [1.42] – that either fail to appear at all in terms of policies, or appear only in the very blandest of forms.

This is, potentially, a significant issue. Officers making use of the Plan once it is adopted (particularly those at local level) and organisations seeking to bring forward plans and projects (such as community groups or NGOs) will be guided not by the surrounding rubric in the Plan but by the particular detail of the policies. Unless the policies make clear and specific reference to – for example – the Mayor’s aspirations on quality of life, it is difficult to see how they could conceivably be effected in any serious way.

Chapter one – Strategic overview

The Strategic Overview section of the Plan nicely illustrates the points just made: it is well-crafted, but disconnected.

Population growth and employment growth are both presented as somehow inevitable, and the inference is that policies must accommodate that growth. This passive liberalism contrasts, curiously, with other aspects of the Overview. The re-positioning of outer London, for example (“this part of the capital might not be realising its full potential to contribute to London’s success” [1.23]) seems to imply an ‘interventionist’ approach; the “decisions… that will have profound consequences for the future of the planet” [1.34] which “are likely to drive a shift to a low carbon economy” [ibid] mean (the Plan says) “energy issues, including resilience, security of supply and infrastructure provision are likely to be increasingly important in the years to 2031” [1.35], which would also seem to imply interventions of some kind; while in 1.47 it is explicitly acknowledged that if growth is “to ensure that it contributes to London’s sustained and sustainable development” a “step change” is required. The kind of step change required is not articulated, but it seems obvious that this step change is not simply going to happen of its own accord.

On the social side it is acknowledged that “London is an increasingly polarised city” [1.25] and that “employment [in London] is increasingly skewed towards occupations needing higher level skills and qualifications”. The proposed solution is “making sure Londoners can get better access to the jobs in their city” [1.26] rather than – say – a ‘step change’ in the kinds of jobs that are available to Londoners, or – say – the kinds of enterprises that create and provide those jobs.

Finally, it is to be welcomed that the Plan wishes “to promote and support innovation and to ensure there are policies in place that allow [new and growing enterprises] the space to grow in places meeting their needs” [1.46]. Again, however, there is room to go further: should this growth only meet the needs of enterprises? Why not the needs of Londoners? And are all enterprises equal, or are some more equal than others? Community-owned enterprises, for example, or social enterprises, are likely to have a significant role to play in the more sustainable London of the future, but they continue to need special support in the shorter and medium term. Their absence from the Plan (both generally and in this specific instance) is not merely a missed opportunity, but potentially damaging to their and London’s future.

In summary, the Strategic Overview typifies the Plan as a whole: an underlying liberal approach to the economy is peppered with interventionist elements that are, if not random, incomplete and ill-connected. A more ‘joined up’ Plan would both extend its realm of proposed interventions (why not attempt to steer the economy in a more overt fashion in the direction of green industries? Why not use the opportunity to de-centralise economic activity to outer London to simultaneously manage population growth? Why not expressly support community and third sector organisations and enterprises that are more likely to address the challenges of a ‘polarised city’?) and would also ensure greater consistency (‘tackling the unacceptable health inequalities’ [1.42] is as much associated with employment as it is with formal work by the health sector).

Chapter four – analysis

As already inferred, there are many aspects of the draft Replacement London Plan that are commendable, and the analysis presented in chapter four is no exception. The acknowledgement that “economic and population growth [should happen in a way] that ensure[s] a sustainable good and improving life for all Londoners and helps tackle the huge issue of inequality among Londoners” and the idea that “these policies will support development of London’s diverse economy over the years to 2031 and enable it to… provide Londoners with the goods, services and job opportunities they will need” [4.1, my emphases] are both laudable. Similarly positive are the ideas that “the role of planning is to facilitate that change in ways which ensure… all kinds of enterprises can flourish” [4.3]; that “the Mayor is strongly committed to driving a fundamental shift in London’s economy towards a low carbon future” [4.6]; that “less high-value activities [are] crucial to sustaining the city’s metabolism” [4.17]; and that “the Mayor is promoting a ‘Green Enterprise District’ in the Thames Gateway” [4.53].

As previously, however, the failure would appear to be two-fold: there are many issues that are not addressed at all; and many disconnections between things that are said in one place but not another. A non-exhaustive list of issues raised but not addressed by the Plan is as follows:

· If it is acknowledged [4.1] that Londoners will need ‘job opportunities’, why is there no analysis of what sorts of jobs Londoners might actually need (rather than, as at present, a passive presumption that certain kinds of jobs will simply come into being and that Londoners will have to equip themselves for whatever jobs become available)?

· What does a ‘fundamental shift’ [4.6] towards a low carbon future actually look like? Is it consistent with financial and retail sectors predicated on sustained excess debt and consumption? Which sectors of the economy, performing in what kinds of ways and creating what kinds of jobs are consistent with this fundamental shift? Are any of these activities going to be things that Londoners ‘need’?

· Are all enterprises equally likely to be able to take the opportunities to ‘flourish’ implied by paragraph 4.3? Many micro, third sector, ethnically-led or ‘alternative’ enterprises require very particular kinds of help in order to flourish; and they have the potential to make significant contributions to economic, social, environmental and quality of life outcomes for all Londoners in the short, medium and longer term. The failure of the Plan to make any reference to such enterprises is a significant failing.

· Having raised the issues of “fundamental shifts” and “step change”, the Plan explains that “This does not mean trying to ‘pick winners’ in the way the Government tried in the 1960s and 1970s” [4.5]. Whilst accepting that the State has no privileged insight into the likely success or failure of any given enterprise or sub-sector, it is uniquely positioned to set the parameters within which innovation and enterprise will take place, and there is no reason in principle why the Plan should not attempt to steer or nudge the market in particular directions: attempting to shift economic activity towards outer London is a very clear example of this.

But much more could be done. Broad-brush definitions of ‘green industry’ or ‘low carbon economic activity’, for example, could be used in the Plan to prioritise some activities over others without ‘picking winners’; particular types or sizes of enterprise could be identified as having particular occupancy or locational needs; particular types of occupation or employment structure that are more likely to meet Londoners needs could be highlighted (there appears to be nothing about the balance between full and part time work, for example). The scale of the ‘shadow economy’ is ignored, too: London’s ‘visible’ economy is critically dependent on a swathe of voluntary groups, individual effort, informal care and support networks which, in a spatial strategy, ought to receive both proper attention and support.

Achieving a sustainable low carbon economy is not simply a case of improving resource efficiency and cutting down on energy consumption: it will require – the Plan acknowledges! – a fundamental shift in how our economy operates, and intervention to achieve this will undoubtedly be required. The Plan, at present says nothing about this.

· While several policies (see below) highlight a range of factors that needs to be considered when implementing the Plan, social and environmental issues are conspicuous by their systematic absence. Why, for example, in Policy 4.2 Ba should LDFs only “enhance the environment and offer of London’s office locations in terms of physical attributives, amenities, ancillary and supporting activities as well as services, accessibility, safety and security” without referencing energy or climate change? Why, in Policy 4.2 Bb, should LDFs “work with the LDA, investors, developers, landowners and potential occupiers” but not citizens or communities?

· When considering the needs of “less high-value activities” [4.17 onwards] some sectors are picked for attention – “manufacturing and maintenance, waste management and recycling, wholesale and logistics” – but others are omitted. Two in particular warrant comment: food and energy. In the case of the former, not only is the food manufacturing sector in London one of the largest manufacturing sub-sectors remaining in the capital, but paragraph 1.42 makes it clear that “Londoners [should] have access to good quality and healthy food”. Provision for the food sector would seem to be a straightforward case for specific inclusion in the Plan, in terms of catering for its occupancy and locational needs, with positive knock-on effects in terms of health, environmental sustainability and economic activity.

In terms of energy, whilst the various provisions and propositions elsewhere in the Plan (specifically focusing on climate change) are to be welcomed, the fact is that there is a very real possibility of the need for a large number of neighbourhood level energy-generation facilities over the lifetime of the Plan, the majority of which could (indeed should) be located on industrial or quasi-industrial sites. Energy facilities should, perforce, have the same status in the Plan as ‘waste management and recycling’ (as in the instance of paragraph 4.20, for example.)

The Plan suggests that [Policy 4.9] “planning obligations [should] support the provision of affordable shop units suitable for small or independent retailers”. This is to be applauded, but again highlights the selective nature of the interventions proposed. If this kind of intervention is considered feasible in the case of retail, then (a) why is the principle not extended to other use types (small office space made available through planning gain to small or independent businesses), and (b) why is the principle not extended to other classes of enterprise (that is, as well as citing small or independent, cite ‘community owned’ and/or ‘voluntary sector’)? This could certainly be extended further: paragraph 4.61 explains that “planning can help to remove many barriers to employment and training opportunities by: … providing for business start up units”. Just business? Should not special provision be made for other forms of enterprise that might be better able to meet the full gamut of social, environmental and quality of life objectives set out in the Plan?

Policy 4.5, Ba, requiring that “at least 10 per cent of bedrooms are wheelchair accessible” is yet further evidence of inconsistency. This is clearly an intervention by the planning system to achieve a social goal, clearly indicating the willingness of those responsible for the Plan to intervene when they judge it appropriate. If 10% of hotel rooms, then there is no reason – in principle – why there should not be, for example, targets for the proportion of new start up units that are made available to the not-for-profit sector.

Specific policy propositions

In light of the above, I make the following suggestions for possible amendments to policy statements in chapter 4 (new text is in bold):

Policy 4.1 Aa to read “promote and enable the development of a resilient and adaptable economy across all parts of London, ensuring the availability of sufficient and suitable workspaces in terms of type, size and cost, supporting infrastructure and suitable environments for larger employers and small and medium sized enterprises, as well as enterprises from both the for-profit and not-for-profit sectors”

Policy 4.2 Aa to read “support the management and mixed use development and redevelopment of office provision to improve London’s economic well-being and its environmental sustainability, and…”

Ac to read “encourage renewal and modernisation of the existing office stock in viable locations to improve its quality, flexibility and environmental performance”

Ba to include specific reference to environmental performance

Policy 4.3 Aa to read “…increases in office floorspace should provide for a mix of uses including housing and other social infrastructure, unless…”

Policy 4.4 Bd to include specific mention of the food sector and distributed energy systems

Policy 4.6 B to include specific requirement to meet minimum carbon efficiency and/or energy consumption criteria [applies more generally, too]

Policy 4.7 Ba to read “the scale of retail, commercial and leisure development should be related to the size, role and function of a town centre, the quality of life of its users and the needs of communities dependent on the town centre for their social and economic well-being”

Policy 4.9 As above, this principle should be extended to cover other use types.

Links between the Replacement London Plan and the Economic Development Strategy

Although it undoubtedly places a special burden on those producing and responding to Mayoral strategies, the decision to consult simultaneously on multiple strategies is to be commended: it maximises the chance that policies will be truly ‘joined up’.

Sadly, a problem that I have argued characterises the Plan (that is, the mismatch between the calibre of elements of the argument and the rubric, on the one hand, and the specificity and precision of the proposed policies, on the other) appears even more extreme in the case of the EDS. Chapter 6 of the EDS, which draws together the policies set out in the preceding chapters, is extraordinarily vague; and it is extremely difficult to deduce what the LDA (or a successor) would actually do on specific projects or opportunities once the Strategy was in effect.

Given the distinctions and overlaps between the Plan and the EDS (in terms of the tools at their respective disposal to influence the London economy), the following ought, in my view, to be considered in one or other place:

the scope for developing a shared (across sectors) method for calculating social and environmental returns on investment, better to enable the LDA to evaluate proposals from the not-for-profit sector, needs to be explored

specific consideration should be given to the issue of asset ownership, as regards land or other facilities owned by the private, public, third or community sector, so as to enable more effective partnership working and the meeting of complex social, economic, environmental and quality of life objectives

acknowledgement that it is London’s poor who will bear the brunt of economic, social and environmental failures and that there is therefore a strong moral case for significantly re-balancing the strategic framework in favour of those that are least able to ensure their own ‘flourishing’

that issues of income and wealth disparity are legitimate matters of economic concern, with profound links to health, well-being and quality of life, and that their comprehensive omission from the Plan and the EDS is unacceptable

that whilst ‘new and emerging’ sectors of the economy certainly need to be enabled and encouraged, the ‘dull and boring’ bits of the economy need nurturing too

ENDS HERE


I shall tweak over the weekend, and will be including the June paper as an Appendix. Please feel free to post it on the Just Space site if you would like to; and any and all comments gratefully received.

Best wishes

David

[1] See Appendix which is here (Paper from June 09)

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