Assembly amends Mayor’s budget

29 January 2014

The London Assembly today passed an amendment [1] to the Mayor of London’s budget designed to tackle significant issues facing the capital.

The amendment includes proposals to:

  • Establish a London Housing Corporation to directly commission house building for the Mayor;
  • Deliver a £66m boost spending on cycling improvements to London’s roads;
  • Guarantee the introduction of a part-time Travelcard;
  • Increase spending on apprenticeships in London by £10.3m; and
  • Freeze the Greater London Authority council tax at £303 per annum for a Band D household

Len Duvall AM, who proposed the amendment, said:

“Our amendment will make a real difference to the lives of Londoners. To tackle London’s housing crisis the Mayor must support private rented groups in each borough so tenants can get legal advice when rogue landlords take their money, and create a bad landlords register. To increase housing supply Boris must establish a London Housing Corporation to directly build homes and help fix the broken market for housing supply. Developers are deliberately slowing down the availability of new properties to drive up prices.

“The new London Housing Corporation would work with councils, housing associations and private developers to build truly mixed communities. The Mayor is falling well short of his house building targets. His new proposals say London must build 42,000 homes a year, but his own research shows the real need is actually up to 62,000. Boris has overseen a collapse in house building – numbers have been falling and in 2012/2013 there were only 18,000 new homes completed."

Jenny Jones AM, who seconded the amendment, said:

“The Mayor has set out a fine vision for cycling in London. Sadly he has consistently been too slow to deliver the real changes that are needed to improve safety and make cycling an even more attractive prospect.

“We have a unique opportunity to build on the public desire and political will to deliver a real cycling revolution in London, our budget amendment will ensure that opportunity is not missed.”

Caroline Pidgeon AM, who also seconded the amendment, said:

“It is time that the two million part-time workers in London and the South East are no longer penalised by an old fashioned fare structure; our budget amendment would guarantee the introduction of a part-time travel card that would be a real benefit to many of the poorest working households in the capital.

“We also need to ensure that young people obtain skills and enter the workforce. London lags behind other parts of the country in employing apprentices, our amendment will help turn that around by ensuring that an additional 80,000 apprenticeships are created by 2015.”

The full text of the amendment is:

This Assembly supports a package of emergency measures to make a real difference to the lives of Londoners in the following areas: housing, cycling, transport fares and apprenticeships. These measures will be funded by freezing the Mayoral Precept and through the reallocation of Retained Business Rates via the Transport for London budget. A further £10m would be drawn from TfL reserves to finance the cost of introducing a Travelcard scheme for part time workers from January 2015 with the ongoing costs being met from the savings generated from the use of contactless payment cards.

Housing

To tackle London’s housing crisis we propose to introduce measures to both improve standards in the private rented sector and increase housing supply.

To improve standards in the private rented sector we will match fund additional environmental health officers for councils to better enforce standards for London’s councils; establish a ‘Know Your Rights’ website for tenants; provide support for private rented groups; and establish a ‘bad landlords’ register.

To increase housing supply we will establish Homes for London to pull together all of the Mayor’s housing, land and planning work and drive forward housing delivery in the capital. This would include a London Housing Corporation to directly commission house building on behalf of the Mayor; establish a Housing Revenue Account headroom trading scheme to more efficiently allocate local authority borrowing to increase affordable housing supply; and fund a fast-assembly, modular, ultra-energy-efficient housing pilot.

Cycling

This Assembly supports the budget amendment already tabled and agreed that will increase TfL’s cycling budget by £66m to two per cent of its total budget for the year.

This Assembly supports the Mayor’s vision for cycling, but we are concerned that his budget for 2014-15 won’t deliver the substantial and transformative change the Mayor and Assembly wants.

The budget has been reduced from £127m to £107m, and follows a forecast underspend of £38m in 2013-14. The consequences of this underinvestment are becoming clear: the standard of the Cycle Superhighway programme has been improved, but the extra costs could lead to the length or number of the routes being curtailed; the Mini-Hollands could open up two million cycling journeys in outer London if every borough got the investment, but most of this potential will be missed; and the Better Junctions programme identified 100 junctions responsible for 302 serious injuries and fatalities in recent years, but 67 will be untouched by the Mayor’s plans.

With much more over-programming and an increased budget, we believe TfL can deliver the necessary level of investment to realise the Mayor’s vision and manifesto promises. As TfL continue to underspend on budgets, this can be initially funded by reducing this year’s £177m contribution to reserves, which can in turn be replenished by savings found elsewhere in TfL’s budget.

Part-Time Travelcard

As the number of part-time workers has increased – with over two million people now working part-time across London and the South East – so too has the need to reform our fares and ticketing structure. Currently many part-time workers are forced to buy a weekly or monthly Travelcard despite not using the transport system every day. Introducing a part-time Travelcard would therefore reduce the cost of travel for thousands of hard-working Londoners, ensuring a fairer deal for those travelling less frequently.

Notwithstanding the Mayor’s commitment “to work on ticketing products which specifically address the needs of part-time workers”[2], this Assembly believes the Mayor’s offer is both too little and too late.

Transport for London (TfL) has estimated the cost of introducing a part-time Travelcard at £40million per annum. Introducing this scheme in January 2015 at the same time as the new year fares package would therefore require around £10 million.

In future years the full cost of providing part-time Travelcards could be met through the additional savings generated by contactless payment cards (estimated to be worth £24million per annum across the bus network) and further reductions in expenditure on consultants and advertising as necessary.

London Apprenticeships Campaign

Appearing before the Assembly’s Budget and Performance Committee on 14 January 2014, the Mayor of London confirmed that if he had another £10 million to allocate in his 2014/15 Budget he would look to provide more support for young Londoners through his apprenticeship programme: [3]

Stephen Knight AM (Deputy Chair): …If you had another £10 million to spend as part of this budget process, what would be your priority for spending it?

Boris Johnson (Mayor of London): I would want to make sure that we continue to fulfil our commitments and one of those is to get young Londoners into work. I am very keen to support the apprenticeship programme. If there is more that we can do there, that would attract me greatly.

This simple budget amendment makes good that commitment by freezing the Greater London Authority’s (GLA) share of council tax – releasing £10.3 million – and redirecting this sum to the Mayor’s Apprenticeships Campaign: a decision that puts the future of young Londoners ahead of a trivial 33 pence per month cut in council tax.

By doubling the apprenticeship grant available for employers of 16 to 24 year olds, and by increasing the marketing and communications resources available to promote the business benefits of taking on apprentices, we would support the creation of an additional 80,000 apprenticeships in 2014/15 – ensuring that the social and economic benefits of creating these apprenticeships is not lost to future years.

 

PROPOSALS

 

Match-funded environmental health officers

0.8

‘Know Your Rights’ website

0.072

Private tenants groups

3.2

Bad landlords register

0.072

Bad landlords register annual running cost

0.03

Homes for London

0.5

Housing Revenue Account headroom trading scheme

0.5

Fast-assembly, modular, ultra-energy-efficient housing pilot

2.8

Cycling

66.0

London Apprenticeship Campaign

10.0

Part-Time TravelCard

10.0

TOTAL

27.974

FUNDED BY:

 

Retained savings from 0% precept increase

10.297

Reallocation of Retained Business Rates from Transport for London

7.677

Use of TfL Reserves (offsetting reduced income from introduction of part time travelcard and using future underspends to fund cycling improvements)

76.00

Notes for Editors:

  1. The amendment was approved by 16 votes for to 9 against.
  2. Letter from Sir Edward Lister to John Biggs AM, 27.01.2014
  3. Transcript of the Mayor’s appearance before the Budget and Performance Committee on 14 January 2014:
  4. This meeting was the first part of a two-stage budget setting process. At the first stage amendments may be approved by simple majority and must be considered by the Mayor. The Assembly will consider the Mayor’s final budget at its meeting on 14 February; the final budget may be amended by a two-thirds majority.
  5. The budget setting process is set out in Schedule 6 of the GLA Act 1999 (as amended).
  6. As well as investigating issues that matter to Londoners, the London Assembly acts as a check and a balance on the Mayor.