Archive for the 'development' Category

Brighton & Hove’s local economy – reasons to be optimistic

Last week at our Full Council meeting we had a very interesting debate on the possible effects of reductions in public spending on the local economy. The Green Party, who put forward the motion for debate argued strongly that cuts to the public sector will have a damaging effect.

For my part, I argued that we have good reason to be optimistic here in Brighton & Hove and that talking the economy down in this way does nobody any good. By and large the driver for local (and national) economic growth is the private sector and in Brighton & Hove there are very encouraging signs:

  1. The Centre for Cities have once again singled Brighton & Hove out as performing strongly post-recession. One quote from their report explains why: “Cities with strong private sector economies and limited public spending cuts, such as Brighton and Cambridge, will be well placed to drive the UK’s economic recovery.”
  2. Just last week the Argus highlighted that recruitment specialists are reporting a surge in vacancies with firms returning to pre-recession staff levels. They also reported that the number of young people starting apprenticeships is rising faster in Brighton and Hove than anywhere else in the South East. Both very welcome pieces of news.
  3. Amex announced last week that they are looking to expand still further in Brighton by relocating a significant number of jobs from their Madrid office.
  4. And developers are still looking to invest in Brighton & Hove. For example, the exciting proposals for a new hotel on the old ice rink site in Queen’s Square.

So, although clearly there are going to be tough times ahead, particularly for us in the public sector, I do retain a sense of optimism about our future prospects.

And I have to say that what would really damage the local economy is the massive increases in taxes on business that the Greens advocate. Just last month, Caroline Lucas put forward proposals to introduce a new ‘business education tax’ on companies – supposedly to pay for free higher education. I’m sure that businesses would be delighted to have this extra burden imposed on them at this time. It would certainly ensure that there would be far fewer jobs for all the new graduates to go into!

And just think what the effect on local businesses would be if the Greens ever got to introduce their cherished congestion charge? As we have seen in London, a Green candidate for the Mayoral elections – Jenny Jones – wants it extended to cover the whole City and the charge to be raised to £50! This really would kill the economic recovery stone dead and I think it would be extremely bad for this City if they ever got the chance to bring it in.

UPDATE: Further good news yesterday on the jobs front. According to a survey by BrightonandHoveJobs.com, more than a third (36%) of local employers plan to create new jobs and take on new staff over the next 12 months, while 17% said they expected higher than average growth which could lead to new jobs. A mere 4.3% said they were looking to reduce staffing. Very encouraging.

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Localism – huge opportunities for communities

I was lucky enough to get an invite to a reception at Downing Street on Monday with other council leaders to discuss with the Prime Minister the Government’s proposals to give more power to local communities and councils. History is one of my great interests and so it was fascinating to see inside Number 10 where so many historical events and visits have taken place over the years!

The new powers for local communities are contained within the new Localism Bill – more information on which can be found here. I believe that there are some truly radical provisions within the Bill which will help to lay the foundations for the Big Society by transforming the relationships between central government, local government, communities and individuals. It aims to strengthen local democracy by handing new powers down to councils, establishing powerful new rights for local people to take on community assets, overhauling the planning system as well as making housing decisions fairer and supporting local business.

I very much hope that these changes will put an end to the hoarding of power within central Government and the top-down control of communities – something which has happened for many years under successive Governments. I am confident that they will allow local people the freedom to run their lives and neighbourhoods in their own way – something which I hope everyone would agree is a huge step forward.

Encouraging business start-ups in Brighton & Hove

Yesterday the Government announced welcome new plans to support 40,000 new business start-ups over the next two years by offering grants and loans to unemployed people who can show they have a robust business plan. The number is double that first targeted when the scheme – the New Enterprise Allowance – was first launched back in October. It is to be rolled out nationally by the autumn.

For anyone interested there are more details here. However, the bare bones are as follows: budding entrepreneurs seeing self-employment as a viable option will receive allowances equating to £1,275 over six months. They will be paired with “volunteer” mentors drawn from the local business communities who will vet business plans and if they prove strong enough, Jobcentre Plus will provide a loan of up to £1,000 to cover start-up costs.

The Government is very keen to stimulate private sector growth in the economy following the recent downturn and any measures to help business start ups are most welcome, particularly here in Brighton & Hove where we have a very vibrant independent small-business community.

New England House (photo courtesy of Chris Keene)

The changes will also complement very nicely some of the other local initiatives we are supporting such as our new Local Enterprise Partnership (Coast to Capital) and our plans for creating a creative and digital media industry ‘hub’ at New England House.

In spite of the dire state of the public finances, economic growth actually held up pretty well last year and small businesses have been at the heart of that. There are also encouraging signs for 2011- a recent survey for example found that almost half of the UK’s small businesses plan to hire new staff next year.

State control of the private rental market would be a big mistake

We had a very interesting Council meeting last week, which was dominated by debate over the Bright Start Nursery (I have blogged my statement on this below so won’t say anything more at this stage). But it was also particularly interesting in relation to a couple of housing matters.

Firstly, the Green Party and Labour Party united in coalition to support a notice of motion advocating state-control of the private rental market. In my view, this would be pure madness. Rent regulation has been tried before and failed. Economists from all sides of the political spectrum, have criticized rent regulation as economic illiteracy which, despite its good intentions, leads to the creation of less housing, raises prices, and increases urban blight. You can just imagine the stampede of private landlords out of the City if this was introduced – and in Brighton & Hove, which has one of the largest private rented sectors in the country, it would be disastrous for families and individuals who rely upon this type of housing.

In their motion, the Greens claimed that rents in the private sector have gone up so much in recent months that it is effectively pricing tenants out of the market. But what they don’t mention is that for most of 2008 and 2009, rental prices for 2 and 3 bedroom properties fell considerably due to the recession. In addition, if you look at the wider trend since 2001, rent rises have been on average lower than inflation over the same period.

It is also worth pointing out that for private tenants who claim housing benefit (or Local Housing Allowance as it is now called), it is the independent rent assessor who determines the level of benefit they can receive. The Government’s proposed reforms to housing benefit (much criticised by the Greens and Labour) – to effectively cap how much tenants can receive – are partly designed to bear down on private sector rent levels. This is because there is plenty of evidence to suggest that landlords push up their rents for housing benefit tenants because they know it will be covered by the public purse.

I am also slightly puzzled at the Labour Party’s support for the motion. For it was back in 2008 that the then Labour Government commissioned a review into the private rented sector – the ‘Rugg Review’. At no stage did this review consider that capping private sector rents would be advantageous. In fact, they identified the 1988 Housing Act, which lifted rent controls, as one of the main factors in the huge increase in supply of private sector rented properties over recent years. I don’t recall the Labour Group at the time making any representations on rent capping so it is a bit opportunist for them now to be jumping on the bandwagon!

Secondly, I asked our representative on the Sussex Police Authority – Green Party councillor Ben Duncan – what representations he had made on behalf of the residents of the City about squatters and van dwellers, issues which I know cause considerable concern and anger in our communities. His answer was very telling – he said that the Police put too many resources into dealing with these problems and that they should concentrate on other ‘priorities’. In other words, the Green’s position, were they ever to take control of the Council, would be to effectively turn a blind eye to these unlawful activities. Not for the first time (here and here) they have demonstrated a worrying contempt for the basic principles of law and order

New local growth proposals will benefit Brighton & Hove

The announcement that our proposal for setting up a new Local Enterprise Partnership – “Coast to Capital” – had been successful grabbed most of the headlines this week. But there were also a number of other important pro-business proposals announced as part of the Local Growth White Paper which passed under the radar somewhat and which I would like to highlight.

In particular, I warmly welcome the proposals around restoring a degree of local accountability to business rates.

Under the current system councils such as Brighton & Hove collect business rates but they are then passed straight to central Government who redistribute them to all local authorities according to a complicated ‘needs’ formula. Over £20bn of business rates collected by councils are pooled and redistributed in this way. The result is that whilst councils have a vital role in supporting the local economy, we have very little financial incentive for encouraging new business start ups.

So, the Government is now proposing that we be allowed to keep the money we raise in new business rates, thereby giving us a more direct stake in the future of our local economies and access to funding to deliver services that our communities (and businesses) need. This is not a full relocalisation of business rates that many people are calling for but it is nevertheless an important step forward and emphasises once again the Coalition Government’s ‘localist’ credentials.

Hand in hand with this is the proposal to introduce new powers for councils to borrow money for regeneration schemes against the future business rate revenues that the redevelopment would bring in. This so-called Tax Increment Financing is widespread in many other countries, in particular, the USA, and I would warmly welcome this in Brighton & Hove. Finding funding for major projects is never easy, particularly in the current economic climate and this would give us another viable option for business redevelopments.

Brighton Marina – clarification

A story which appeared in Tuesday’s Argus newspaper claimed that discussions were going on ‘behind the scenes’ between Brighton & Hove City Council and Explore Living over their proposals to redevelop part of the Marina. I would like to make it clear to residents in the area that this is categorically not the case.

As far as I am concerned, the decision back in July by the Secretary of State, Eric Pickles, to dismiss Explore Living’s plans is the final word on this matter. They are, of course, entitled to submit a fresh application but as yet, I am not aware that one is forthcoming.

Undoubtedly, the Marina is a very important site for future development, for providing housing and employment, and we are looking forward to working with developers who can offer a first class scheme that will work well for the area. Our aim is to make sure that the regeneration of the Marina enhances the site and is of lasting benefit to residents. This will form the basis of any future negotiations about the site.

Brighton & Hove must not become a ‘clone town’

The report by the New Economics Foundation (‘Re-imagining the high street’) makes for interesting reading.

It takes an in-depth look at the effects of the increasing domination of large chain stores in our towns and cities and argues that so-called ‘clone towns’ are not only less attractive to consumers but that they are also much more vulnerable to economic downturns, such as the one we are currently in.

There is no doubt that a proliferation of one kind of company or a single type of retailer can create a feeling of sameness. That feeling of sameness and similarity can erode the character and individuality of a given location and this in turn can deter commerce and alienate residents. If you don’t recognise or value the place you live in, how can we expect community and business to flourish?

As I have blogged before, Brighton & Hove has a unique character and individuality which itself attracts many businesses and people to be here. We cannot afford to let that selling point be diminished by high-street homogeneity.

I have been working hard with cabinet colleagues and officers to raise the profile of this issue – throughout the year we have been supporting local businesses and encouraging people to think about their spending – and keep it local.

This appears to be an approach that is working; we fare well in the NEF report, with Hove just outside the ‘Home Town’ ranking.  Brighton, I can only assume is not included because it is too large … or perhaps it could be that we do so well, we are not considered at risk!

National and international retailers obviously have a key part to play in our economy (not least through the local people they employ). However, by definition, a lot of the money spent in them by residents and visitors does leave the City.

Money spent locally boosts our economy, supports trade and benefits communities. A diverse, rich and varied high street not only protects against the consequences of losing a major player (Woolworths etc.) but supports the City by attracting a mixed economy of people into the town centre.

I don’t often encourage people to read lengthy papers – and I can’t say I agree with all the findings of NEF –  but do take a moment to have a look. The summary at least will give you food for thought and perhaps a flavour of the challenges that the City faces as the economic situation remains tough.


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