DD2532 London Business Rates Pool -Industrial Intensification Delivery

1.1. The Mayor, the London boroughs and the City of London Corporation, with the agreement of the government, established the London Business Rates Pool for 2018-19. The Mayor’s agreement to the GLA’s participation in the pool was set out in MD2217. The main financial benefit of the pool is that London retains 100 per cent of any growth in business rates income over and above the business rates baseline set by central government.

1.2. It was agreed by the Mayor and the government that he would commit all of the GLA’s share of the net additional benefit of pooling on strategic investment projects. In accordance with this agreement, the Mayor has created a £112 million Strategic Investment Fund (SIF) that he will use to fund strategic investment projects.

1.3. MD2363 (Sept 2018) approved an allocation of £90.89 million from the Strategic Investment Fund. The Industrial Intensification Delivery Strategies were awarded £1 million of funding to enable the development of modern industrial floorspace and new affordable homes.

1.4. The Delivery Strategies provide a deliverable framework and design proposition for how sites on industrial land (designated and non-designated) can be intensified and consolidated to protect and enhance its capacity, whilst allowing for release in parts to accommodate housing delivery to meet the multiple objectives across six pilot sites.

1.5. The strategies are intended to build planning confidence of partners to deliver projects through industrial intensification, in accordance with policy E7 of the adopted London Plan. The strategies support London Boroughs and GLA colleagues to implement policy, realise affordable housing and deliver intensified industrial capacity to serve London’s economy.

1.6. The GLA procured Avison Young through the TfL’s Property Consultancy and Development Framework to act as a multi-disciplinary Commercial Consultant across the Delivery Strategies. Since October 2018, Avison Young have provided commercial services to support the design evolution of the spatial strategies, ensuring that proposals are market-facing, viable and deliverable.

1.7. The pilot sites are advancing beyond the commissioned works of the design team, supporting potential land acquisitions and land assembly proposals. Further commercial advice is required to support strategic masterplanning proposals through local governance processes and determine final delivery strategies and any public sector intervention required to realise project objectives.

1.8. The services will remain the same as the previously agreed Commission, approved by DD2283. The supplier would still be bound to the obligations within the contract through the variation to the contract date and contract value.

1.9. Officers have agreed the principle of the contract extension with the supplier and TfL procurement colleagues, the value of the extension has been agreed by procurement. To request a different supplier to undertake this extension would carry substantial financial and resourcing implications.

2.1. The objectives of the Industrial Intensification Delivery Strategies are to:

• generate realistic and deliverable propositions for the intensification and consolidation of designated industrial land, to support areas of release for housing delivery and co-location;

• support boroughs to plan for sustainable mixed-use growth through Industrial Intensification to protect their industrial capacity, while helping to deliver their housing targets. The Strategies could inform and support Plan-making;

• provide comfort to GLA investment partners to manage planning and development risk for Industrial Intensification projects on designated industrial land; and

• demonstrate best practice for industrial intensification strategic masterplanning, in accordance with policy E7 of the London Plan.

2.2. Avison Young will continue to provide agency, viability and delivery advice across the pilot sites that are advancing to investible propositions, and where further support is required to turn the delivery strategies into public-facing documents and/or reports for decisions on public sector intervention to optimise the delivery of new homes, new public realm and new industrial space.

3.1. Under section 149 of the Equality Act 2010, as public authorities, the Mayor and the GLA are subject to a public-sector equality duty and must have ‘due regard’ to the need to (i) eliminate unlawful discrimination, harassment and victimisation; (ii) advance equality of opportunity between people who share a relevant protected characteristic and those who do not; and (iii) foster good relations between people who share a relevant protected characteristic and those who do not. Protected characteristics under section 149 of the Equality Act are age, disability, gender re-assignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation, and marriage or civil partnership status.

3.2. Throughout the decision-making process, due regard has been had to the ‘three needs’ outlined above. The industrial sector employs hundreds of thousands of people in London; potential intensification of industrial land use will protect jobs in the industrial sector and retain a resilient economy that serves Londoners. The housing shortage in London disproportionately negatively affects people with certain protected characteristics; increasing the supply of housing and affordable housing will help to achieve positive impacts in line with the ‘three needs’.

Links to Mayoral strategies and priorities

4.1. Good Growth -protection of London’s industrial sector is pivotal to the success of London’s economy, in serving residents and businesses as well as creating value through production of goods. The Delivery Strategies would meet all the key pillars of Good Growth; through making the best use of land, growing a good economy that is resilient to change and delivering homes in an integrated and sustainable way that meets London’s need. The commercial advice is fundamental in ensuring the spatial strategies are brought forward for delivery, to the next stage of detail.

4.2. Industrial protection and intensification -Within the London Plan a key priority is policy E7. The commercial advice is fundamental in ensuring these strategies are deliverable.

4.3. Affordable housing delivery - The commercial advice is on planning, values and delivery to aid the maximisation of affordable housing.

Impact assessments and consultations

4.4. There has not been any impact assessment or consultation, beyond the input and advice received from procurement colleagues.

4.5. No officer involved in the drafting or clearing of this Mayoral Decision has any interests to declare.

5.1. This decision requests approval for expenditure funding of up to £50,000 to appoint a commercial consultant to advise on delivery and viability across the pilot sites. DD2283 approved expenditure of £260,883 and this additional £50,000 will result in a new increased contract value of £310,883.

5.2. The expenditure is within the budget of the £1m allocation under MD2363 and will be incurred during 20/21 and 21/22 financial years.

5.3 The forecast spend to date is £659,088 (2018-19 £26,088 , 2019-20 £236,000 and 2020-21 £397,000) with a balance of £340,912 uncommitted against the £1m allocation. Previous decisions submitted based on contracted work include DD2283 (£260,883), DD2393 (£93,800), DD2435 (£84,450), DD 2469 (£107,379) and DD2487 (£84,812).

6.1. Under section 30(1) of the Greater London Authority Act 1999 (as amended) (“GLA Act”), the GLA has the power to provide the funding for the proposed intervention providing it considers that doing so will further one or more of its principal purposes of: promoting economic development and wealth creation, social development, and the improvement of the environment in Greater London.

6.2. In exercising the power contained in section 30(1) of the GLA Act, the GLA must have regard to the matters set out in sections 30(3-5) including the impact on health, health inequalities, sustainable development and climate change and its consequences and equality under section 33 of the GLA Act and section 149 of the Equality Act 2010, which is set out above.

6.3. Transport for London (TfL) are managing the contract variation on behalf of the GLA. The contract variation will increase the contract value by £50,000 and increase the contract period up to March 2022.