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Sadiq Khan becomes mayor: industry reaction

Sadiq Khan is the new Mayor of London. Industry reaction makes clear he has his work cut out to deliver on the pledges of his manifesto. 

Sadiq Khan has been elected Mayor of London for the Labour Party with 57% of the vote; the biggest margin of victory in a London Mayoral election since Ken Livingstone's election in 2000. Khan now has responsibility for a £17bn annual budget including £3.6bn of the Metropolitan Police and £10.7bn for Transport for London.

From this week he has to start work to deliver on the promises of his election manifesto. It's a tough challenge in the wake of an austere funding settlement. These are the five key pledges made on housing, business, transport and infrastructure:

1. Tackle housing

This was the top priority according to the Khan campaign. London needs to double its current rate of housebuilding to 50,000 homes a year and it needs to make a lot more of them affordable and catering for social housing as former council estates are demolished and replaced with private investor led developments. Khan says he will target 50% of homes built as 'genuinely affordable'. The task is a big one given that local planning powers are held by the 33 London borough councils.

Khan has pledged to get around the problems by setting up a Homes for Londoners team at City Hall and building an alliance with London councils, housing associations, developers, investors and residents associations. 'Homes for Londoners will bring together all the Mayor’s housing, planning, funding, and land powers alongside new experts to raise investment, assemble land and make sure Londoners get a fair deal from developers', according to the Khan manifesto.

Aecom chief executive for the UK and Ireland, Patrick Flaherty, says Khan needs to build a more integrated strategy, with his alliance spanning across a wider geographical area: “London needs a proactive strategy for growth that integrates house-building with infrastructure development and employment opportunities. Addressing the housing crisis will require the new mayor to wield influence across a much wider region. He must collaborate with and influence local authorities surrounding the capital to share in economic growth and be prepared to look beyond their own local housing needs," Flaherty says.

The property investment services firm JLL says Khan faces a tough challenge to balance the needs of business and investors with those of social housing. JLL's head of residential research, Adam Challis, says: “Khan has said he will use mayoral planning powers to stop 'buy-to-leave' and vowed to stop homes being sold off in advance to foreign investors. Restricting demand is a quick way to compromise the viability and deliverability of new developments.  The industry is already signed up to the mayor’s ‘London first’ concordat for sales, which commits to give Londoners first option on new homes in the capital and which we wholeheartedly support.

“Action to restrict overseas investors would simply destroy the viability of most schemes, and would reduce, not increase, the level of affordable housing delivery.  We should remember that Ken Livingstone had this aim and never got close to implementing it."

2. Freeze transport fares

This will not be easy given that Transport for London has to find ways of cutting expenditure or raising funds to fill a £2.8bn reduction in its revenue funding settlement from central government. Khan has committed to freezing fares for the next four years, which he says he will do principally by making TfL a more efficient operation. Speaking to the London Assembly Budget Performance Committee earlier this year, transport commissioner Mike Brown said it is "highly unlikely" that fare freezes will be possible after efficiency savings have been made without cuts to TfL's programme of capital improvement projects .

London First infrastructure director David Leam says: "As Mayor, Sadiq Khan has difficult decisions to make and with the high cost of living in the capital, it's understandable that he would want to hold transport fares down, but then he has got to deliver on efficiency and cost cutting at TfL and London Underground and clealy there is more that can be done there.

"But it will not be painless. It might mean cutting back on headcount, merging functions and changing working practices at TfL.. Khan will have to prioritise projects and he won't be able to do everything that has a good business case unless he can find new ways of raising funding."

3. Be pro-business on skills, infrastructure and growth

"We are looking forward to working with the new Mayor. We have found him very accessible and openly engaging with our members. He has said all the right things on the big headline aspects of business, infrastructure and growth. The question now is how will he deliver to make it all happen," Leam says.

"Continuing with the Tube upgrades is critical. We have seen enormous benefits of reliability and capacity where upgrades have been done so far but there is still a long way to go with this. We need to see clear intention and dates set by a programme for modernisation of the Picadilly Line and others."

One of the first things Khan can do to give a clear positive sign for infrastructure and growth is to press go for the start of the Silvertown Tunnel project at Greenwich, Leam says. The circa £1bn Silvertown project will do a lot increase capacity and connectivity by relieving the congested Blackwall Tunnels, it will "send a strong early signal" of seriousness of intention, Leams says, and it stands to be funded through tolls levied through the Silvertown and Blackwall tunnels.

Other major projects that need Khan's attention for funding include Crossrail 2 – "the aspiration should be to have a funding package agreed with government, business and local boroughs by the end of Khan's four year term", Leam says – plus three foot and cycleway bridges over the Thames and further new road crossings in east London. "Bridges such as those explored for Gallions Reach near Thamesmead are essential for the connectivity needed for jobs and housing. Whether they are bridges or tunnels, we need to see a strong plan committing funding to a timetable of delivery. The frustration with Boris Johnson was that nothing really happened," Leam says.

4. Air quality

Khan has pledged to bring air quality within safe and legal limits. This is another tough asignment due to emissions from vehicles and numerous other contributing factors which will not be easy to restrict or bring under greater regulatory control.

"This is by far the biggest environmental challenge for the new Mayor and arguably his greatest challenge of all," says executive director of the Environmental Industries Commission, Matthew Farrow.

"Khan does not have a track record on environment, but he has promised to bring forward London's ultra-low emission zone including tougher vehicle standards. Let's see thatstraight away, plus a scrappage scheme for older diesel engines. He will need something like that, plus conversion of fleets to LPG (liquified petroleum gas), with a subsidy grant for business, which could make progress."

Khan has not mentioned toughening up of the regulatory regime for diesel engines on construction sites, which account for around 15% of all emissions in London, says Farrow.  "The concern is that current regulations are not tough enough and it's not clear how they are to be enforced."

Air quality cannot be discussed without consideration of aviation policy, but the two are not necessarily at odds. Industry commentators including Aecom's Patrick Flaherty have warned of the damage to UK prosperity caused by further delay to expansion of airport capacity in the south east. Khan has backed Gatwick to avoid Londoners' objection to Heathrow.

However, some 50-60% of air pollution recorded around Heathrow comes from traffic serving and surrounding the airport, says Farrow. If Khan can come up with the answers to air quality on London's tsreets, he will be able to solve much of the issues of additional pollution from a third runway at Heathrow.

5. Walking and cycling

'My aim is to make London a byword for cycling around the world – with a plan to make cycling and walking safer and easier in the capital,' says Khan's manifesto. He plans to do this with an uplift of funding,  more Cycle Superhighways,  prioritising quietways and a range of other walking and cycling initiatives, including backing the £80m Rotherhithe-Canary Wharf bridge.

Senior policy and development office for the London Cycling campaign, Tom Bogdanowicz, says: "We want three things from the new Mayor.

"We want to see a trebling of safe, segregated cycling routes, which is achievable. There really are not many protected cycle tracks in London.

"We want cycle friendly town centres in every London Borough – a real commitment to extension of the Mini-Holland concept.

"And we want safer lorries, which we are now starting to see, but we need to see more to create safe conditions for cyclists."

 

ACE chief executive officer Dr Nelson Ogunshakin OBE added: “I would like to add my congratulations to Sadiq on his election to be Mayor of London. The next four years promise to be challenging as London experiences considerable population growth that will put a strain on London’s existing infrastructure. As a member of the London Development Board, I can confidently say that we have a plan guided by expertise in the field to help meet these challenges. Our industry hopes that the new mayor will consult with experts to best meet these challenges and I look forward to working with him to help deliver better infrastructure for Londoners.”

 

If you would like to contact Jon Masters about this, or any other story, please email jmasters@infrastructure-intelligence.com.