Cllr Philippa Roe is the Leader of Westminster City Council.
By 2030 London is forecast to be home to over 10 million people. And central London will continue to be the magnet that draws in people to live, work and visit in huge numbers.
Each year there are over 200 million visits to the West End alone. The opening of Crossrail in 2018 is estimated by some studies to increase that number by a further 100 million annually.
Although Westminster is just one of the 33 local authorities in London, our businesses produce £48.5 billion GVA, on a par with the City, and over 300,000 people are employed in our borough, outnumbering our population of 232,000.
Providing the living space, the working space and the recreation space for so many people in such a relatively small area is major challenge. It’s particularly tricky because we need to protect the look and feel of Westminster which contribute hugely to its attraction.
So last night’s launch of the City and Westminster Property Associations’ first ever manifesto for property in central London at a reception at the House of Lords, co-hosted by those Associations, Westminster City Council and the City of London Corporation, was a timely event.
The Manifesto calls on all parties to provide certainty in the property industry and to commit to the infrastructure that is vital if central London is going to meet the needs of its growing residential and commercial populations while also retaining its pre-eminent position as a world destination for investment and business.
We have little capacity for physical growth to meet the huge demand for commercial floor space, but we are nevertheless working with the property sector and other stakeholders, such as the West End Partnership, to model how development can be absorbed that will help retain London’s status as a world city, with its rich diversity of small and large firms. We are looking at how we can do this by increasing density in certain areas and only in sensitive ways that reflect and maintain the unique character of Westminster.
One of the key measures in the manifesto is a reform of the business element of local government finance, along the lines proposed by the Mayor’s recent London Finance Commission report.
Currently Westminster has no real financial incentive to encourage growth. We do so because we believe strongly that it is the right thing to do. But there are many other pressures on our shrinking resources. What we need is a system that ties more closely the financial gains from local business growth to the resources available to local government.
Each year Westminster raises £1.8 billion in Non Domestic Business Rates which goes to central government for redistribution nationally. We receive back £73 million. That’s just 0.4 per cent of the Business Rate income that our businesses produce. Recent moves by the government to allow local authorities to retain, for a period, the marginal increases in business rates as a result of growth do little for Westminster as we cannot plan infrastructure and other long term investment against this small and short-term income. And potential benefits from individual revaluations are under constant threat because we have to carry all the risk of successful appeals, which eat into our £73 million grant.
We are further limited because the system recognises only growth in floorspace, not increases in rateable value generated through improvements to infrastructure and public realm. This reduces the potential for capturing and reinvesting the proceeds of growth in densely built-up areas such as Westminster.
That is why we fully support the manifesto’s call for greater financial autonomy for local authorities.
We also support the need for innovative thinking about housing provision. In the past five years we have seen nearly 4,000 new homes built in the close confines of Westminster. But there is huge pressure for more. We welcome the government’s increase in the cap on the Housing Revenue Account, announced in the 2013 Autumn Statement and the additional £8.5m that we secured as a result, but we would like to see this go further.
We have a huge asset in our housing stock that produces secure and predictable revenue streams against which we could leverage much needed funding for social, affordable and other housing supply in London. This would require a reform to the arbitrary HRA caps, such as recommended by the DCLG Select Committee when it last looked at this issue, and relate our housing role more closely with the system of prudential local authority borrowing.
There is also a link between Westminster’s growth agenda and our case for devolving further central government programmes, as can be demonstrated in the recently announced London Growth Deal with Government. We have devised an innovative pilot scheme in Westminster with the London LEP and other central London authorities, which is intended to design a possible successor to the Department for Work and Pensions’ Work Programme. This will help hard to reach unemployed people on Employment Allowance by providing a better range of support, training and job offers, to get them into sustainable employment. As the Growth Deal says, this could unlock a series of progressive steps towards further local service integration, which will better equip us to widen the benefits of growth to all communities and at the same time reduce the overall cost of public services.
Getting the balance right to provide the accommodation, infrastructure and public spaces for the increasing numbers of Westminster residents, workers and visitors is a major challenge for Westminster City Council. But we cannot do this alone. We need the resources of the private sector, not just their financial strength but their expertise, their innovation and their professionalism, to deliver the growth that our people will need over the decades to come. A good example of this partnership approach is how the Westminster Property Association has funded six additional staff in our planning team to handle some of the 13,000 planning applications we deal with annually (a figure equivalent to combined case load of the major metropolitan cities in England).
The central London property industry’s manifesto is a valuable contribution to the debate about how we can keep central London as one of the most desirable and accessible areas in the world. I commend it to all the major political parties and hope that many of its proposals will find their way into their own manifestos.