DD2704 The impact of affordable housing on London’s economic productivity

1.1.    Making housing in London more affordable is a key Mayoral commitment. More recently, the London Partnership Board stressed the need for further research on housing affordability’s economic and social impacts, looking in particular at numerically estimating the percentage growth in productivity that affordability measures (e.g., investment in social housing or shared ownership arrangements) would contribute.
1.2.    London Councils and GLA Economics are leading this collaborative effort to enhance the existing database. In October 2023, London Councils presented a paper jointly authored with GLAE that included a framework on how affordability pressures impact productivity. 
1.3.    To date, there has been no analysis that empirically measures the extent to which investment in housing affordability (e.g., investment in social housing) would boost the city’s economic productivity and growth. This is the basis on which the procurement highlighted in DD2682 was made (see Appendix A for details).
1.4.    This decision requests approval for up to £75,866.40 for the commission of empirical modelling of affordable housing’s effect on economic productivity in London. The work is expected to start in June and conclude by August 2024. This amount is £15,866 higher than the £60,000 originally approved in DD2682 because NERA are now committing additional resources to ensure that the results are robust, while also committing to providing the GLA with a report that highlights the results and explains in detail the methodology and the analysis underlying them.
 

2.1.    The key objective of this work is to arrive at a London-specific measure of the extent to which making housing more affordable boosts productivity and growth. 
2.2.    A second objective of the work is to model the difference in impacts that alternative housing affordability arrangements (e.g., social housing vs. shared ownership) would have on productivity. This would permit us to compare which strategy is more cost-effective in promoting London’s productivity and growth.
 

3.1.    Please refer to DD2682 (appendix A) for further details

4.1.    Please refer to DD2682 (appendix A) for further details.

5.1.    The total procurement amount of £75,866.40 will be partly funded by the GLA’s City Intelligence Unit in the Strategy and Communications Directorate (£36,866.40), as well as a contribution from London Councils (£24,000) and the G15 (£15,000). Therefore, it is expected that the GLA contribution is likely to be 48.5% of the total cost, and therefore a maximum of £36,866.40. 
5.2.    There is sufficient budget within the GLA’s City Intelligence Unit in this financial year to cover this cost. 
 

6.1.    The foregoing sections of this report indicate that the decisions requested of the Executive Director of Strategy and Communications concern the exercise of the GLA’s general powers, falling within the GLA’s statutory powers to do such things considered to further – or that are facilitative of, or conductive or incidental to – the promotion of economic development and wealth creation, social development or improvement of the environment, in Greater London.
6.2.    In implementing the proposals in respect of which a decision is sought, officers should comply with the GLA’s related statutory duties to:
•    pay due regard to the principle that there should be equality of opportunity for all people
•    consider how the proposals will promote the improvement of health of persons, health inequalities between persons and to contribute towards the achievement of sustainable development in the United Kingdom
•    consult with appropriate bodies.
6.3.    In taking the decisions requested, as noted in section 3 above, the Executive Director of Strategy and Communications must have due regard to the Public Sector Equality Duty under section 149 of the Equality Act 2010, namely the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by the Equality Act 2010; to advance equality of opportunity between persons who share a relevant protected characteristic (race, disability, age, sex, sexual orientation, religion or belief, pregnancy and maternity, and gender reassignment) and persons who do not share it; and to foster good relations between persons who share a relevant protected characteristic and persons who do not share it. To this end, the Executive Director of Strategy and Communications should have particular regard to section 3 (above) of this report.
6.4.    Section 1 of this report indicates that part of the sought budget will amount to the provision of services. The services required should be procured in accordance with the Code. Officers must ensure that an appropriate contract documentation is put in place and executed by the GLA (with the assistance of TfL Legal) before the commencement of services. 
6.5.    The procurement to commission consultancy services is valued at £60,000, whereby the GLA’s payment for services will be covered by the overall expenditure requested under this DD.  Section 9 of the GLA’s Contracts and Funding Code requires that the Authority undertake a formal tender process or make a call off from an accessible framework for procurements with a value between £10,000 and £150,000.  
 

Appendix A - DD2682