Draft Replacement London Plan / Economic Development Strategy
Comment and objection from Michael Edwards
(UCL Bartlett School of Planning / King’s Cross Railway Lands Group / Just Space Network, but here writing as an individual, not on behalf of any of these organisations.)
This submission relates only to the four most important topics on which I consider the draft Plan is deficient:
- the growth objective and the growth assumptions
- diversification and sectoral emphasis
- land/property markets
- balance between local services and centres
The paragraphs are indexed to sections of the London Plan but equally affect the EDS. It is therefore submitted as a response to both.
The plan rightly aspires to reduce the inequalities afflicting London and to drive towards a low carbon economy. However in its actual provisions it is simply tinkering and gives inadequate leadership towards a different future.
The last 30 years have been a disaster for low- and middle-income people in London who saw their real incomes static or falling while wealth accumulated upwards, partly at their expense, and the quality and security of their jobs worsened dramatically.
The economic crisis is very serious. London’s economy was cushioned from early employment impacts by its low reliance on manufacture compared with some other regions (as Ian Gordon and others pointed out) but we are very dependent on public spending – current and capital. And within the next few years government seems likely to impose severe cuts in the social wage in order to lower public debt in conformity with the Maastricht / Convergence criteria. The recession is thus likely to be long and hard.
Talking about the London Plan in that context feels a bit like arranging deck chairs on the Titanic. But I don’t think it is: it’s worth taking every opportunity to open people’s eyes to what has been happening and to explore alternatives. The urgency of the global warming issues further helps create an atmosphere in which people want to think about a future different from the past. Tinkering with the ‘back to normal’ assumptions is all the Draft Plan (and the EDS) does.
Chapter 1 generally, and chapter 4
Pursuing growth of GVA is a badly-specified objective. All versions of the LP have aimed for growth in GDP / GVA but the twin crises in the economy and environment make it imperative that we re-think this desideratum because:
- It omits environmental costs and other externalities
- It ignores voluntary work and unpaid domestic labour, both huge in London
- It shows illusory growth where we just pay more for the same goods or services – notably housing and other ‘positional goods’ 
- It over-values the work of (for example) bankers
- It under-values the output of most public service work
- It disregards changes in inequality.
If the Mayor is serious about the importance of ‘quality of life’, and about ‘driving towards a low carbon economy’ this way of measuring success has to change.
The approach to growth forecasting.
All the Mayor’s strategies share an approach to the economic crisis which must be wrong. The common Evidence Base presents (in fig 4.2) a number of expert forecasts, all of which acknowledge and foresee a major downturn followed by renewed growth. The same figure shows that the Mayor’s strategies have chosen to ignore the crisis and plan on the basis of uninterrupted growth.
The planning team defend their decision by saying (a) that there would be severe damage caused by under-estimating infrastructure needs if optimistic forecasts turned out right and the plan had been based on pessimistic forecasts, and (b) that one role of the plans is as a basis for negotiating funds with government, so it helps to have high levels of need embodied in the plan.
The GLA held an alternative economic scenarios seminar in the summer but it was a “closed” event and the feedback we have is that the focus was narrow, only looking at small differences in growth rates as sketched in the IIA. This does not meet the requirement. We need our Mayor to unite Londoners around a radical strategy to deal with the economic and environmental crisis through the pursuit of broadly defined growth of social output.
These strategies of 2010 (LP, EDS. TfL) can serve Londoners best by acknowledging the severity of the economic crisis and focusing on how to build recovery, protect the vulnerable and take advantage of the special opportunities which the crisis may present. I consider the present draft London Plan not fit for purpose and would like to see it sent back for re-working on more pessimistic economic assumptions, or at least with both optimistic and pessimistic scenarios included. Since the planners have suceeded in reviewing the plan every few years, forecasting mistakes can be picked up in the next revision.
Policy 4.10 New and Emerging Sectors (and chapter 4 more generally)
The Plan is still too preoccupied with glamorous sectors, those producing high GVA per capita. If we are serious about poverty (or even just about recovery of GDP) we need to target the non-sexy sectors in which low pay is the norm and look for ways to raise productivity there, and thus wages, support those firms and public+private services, especially the ones which offer entry-level jobs to those without much qualification, and progression thereafter. Retaining and encouraging existing enterprises is just as important as seeking inward investment and encouraging startups.
It is good to see a slight change of emphasis in this direction in the EDS and good also to see that ‘innovation’ is to be targeted especially at SMEs. However these appear to be slight changes in sentiment only and are not carried through into policy, especially in the London Plan.
Meeting with the London Plan team in July 2009, the Just Space Network said (and followed up with a written statement) how important it was for the research programme to look carefully at the needs and potentials of each sector at a fine grain level. Of all our suggestions, this was the top priority (see appendix) but there is no sign of this work being done. Even if it were right for London to be pursuing maximum GVA (which I dispute – see above), it is illogical to do so just by further efforts to expand the high-GVA/worker sectors. The poorest employed Londoners are in the other half of the economy: retailing, cleaning, security, transport and vehicle maintenance, elderly and child care. Innovation policies and supportive planning policies which raise productivity (and thus potentially pay) in those sectors could make major contributions to GVA and to poverty reduction.
Policy 4.4 Employment Land, and with implications elsewhere, especially on Density Policy 3.4 and housing
We must find ways to lower expectations of land value growth, especially for housing. Clearly the surge of money towards the acquisition of land and buildings has pushed land prices in the UK (and especially London) to dangerous levels, diverting investment from productive channels, excluding people from housing, lowering the quality of new housing, redistributing wealth upwards and – through its immense fragility – now contributing to the economic crisis.
The London Plan / EDS alone cannot bring about the massive re-structuring of the economy which is required to produce a sustainable future: many measures will have to be devised and taken at supra-national and national levels. However there are things which can and must be done to mitigate some of the effects in London.
One pressing need is to reverse the almost-open-ended incentive for residential densification which has grown up over the last decade. This has contributed to raising residential land values and developer and landowner expectations and thus, among its many effects, displacing almost everything else. Land prices for residential development in London were so high in the decade up to 2007/8 that other uses could scarcely ever compete. This powered the attrition of industrial and employment floorspace and provided a basis for naive neo-classical economists to argue that many other uses, notably suburban office, industrial and workshop buildings, were ‘non-viable’. Housing densities regularly exceeded those permitted in the density matrix and apparently continued to do so in 2008. The highest densities have been the subject of strong attack for their urban design effects, for their effects on play space and family living quality (and the draft Plan goes some way to dealing with these criticisms). However this effect via the land market – on displacing economic activity – has not received attention and should do so for the way it impacts in thousands of small developments across most of London with strategically-damaging cumulative effects. At the very least this means that the maxima set in the density matrix must be strictly enforced, with no provisions for further density increments to be sanctioned for any reason at all.
Policy 2.15 Town Centres, 3.7 Large Developments, passim
Decentralise. Overturn the Plan’s obsession with centres as the places where everything has to happen. It’s good for corporate real estate values perhaps but it’s very old fashioned. Furthermore the plan is still imprisoned (on the centres topic) by an implicit concept that only BIG things are strategic although other areas (density controls, open space) it acknowledges that the cumulative effect of many small decisions are the proper concern of a strategic plan.
The “lifetime neighbourhoods” concept comes to our aid here, as does the imperative to reduce the need to travel. Lifetime neighbourhoods calls for us all to have, within walking distance of home, a set of basic facilities – shop, post office or somewhere to collect internet and mail-order parcels, a chemist, child-care and other services.
If activities generate a lot of employment or longer-distance movement or trip-chaining they need to be on public transport routes but they don’t all have to be in ‘centres’. There are no agglomeration economies to be had in car repairs or care homes or builders merchants or primary schools; quite the reverse.
All of this calls for a complete change in the GLA’s approach to services, including retailing, from a top-down to a bottom-up (or more precisely a multi-scalar) approach. This will call for modernisation of technical approaches to take advantage of the rich understanding now available of local behaviour patterns in relation to wider scales  and would permit the development of a strategic planning tool comparable in value to the density matrix.
In the meantime, however, there is much that could be done.
It is good to see that the OLC and the London Plan have decided against the suburban mega-centre idea. But the plan should go further and positively encourage the dispersal of additional comparison goods shopping (where agglomeration economies are important) among London’s centres in the interest of shortening trips (especially car trips) to such centres. It is particularly important to shorten the long and toxic trips which many of us make by car to Bluewater or Westfield and the best way to do that is to ensure there are attractive shopping centres nearer home.
For certain kinds of retailing – heavy/bulky goods – car trips will be impossible to eradicate and, for these, policy should favour the creation of new stores in areas not already well-served, purely in the interests of shortening trips.
More generally, the support for local services needs to have a higher priority in policies for street management and parking to enable enterprises to load and unload more readily. And to level the playing field between local services and malls/superstores, and reduce the incentive to drive, the Mayor should use his powers to tax parking spaces on private land.
 The £ 850 bn the UK has spent on bailing out the banks is going to be recouped from all of us through tax and service cuts. Thus the social wage will be savagely cut, adding insult to injury for a great majority of the population. There will also be direct and indirect job losses as the negative multiplier effects work through. It has cost British people about £14,000 per capita to play host to these banks
 Hirsch, F (1977) The Social Limits to Growth, London: Routledge
 The only GLA research on how GVA is measured seems to have been a study which attempts to massage upwards the productivity estimates for ‘financial intermediation’ to boost the Crossrail CBA (GLAE WP23 2007). For a (rather crude) contrasting approach see Steed, S, H Kersley and E Lawlor (2009) A bit rich: calculating the real value to society of different professions, London: NEF http://www.neweconomics.org/publications/bit-rich
 The recent work of Barrass has shown how normal is the boom and bust process in London and how counter-productive it is just to think in terms of underlying trends. Barrass, R (2009) Building Cycles: Growth and Instability, London: Wiley
 Vaughan, L, K Jones, S Griffiths and M Haclay (2009) The Spatial Signature of Suburban [London] ‘Active’ Centres, Seventh International Space Syntax Symposium, Stockholm http://eprints.ucl.ac.uk/15021 ; Alain Chiaradia and Christian Schwander IVALUL project with LB Tower Hamlets, Urban Buzz, London 2009.