The normally bone-dry topic of asset management has been at the centre of some fiery quarrels in City Hall in recent months. The Mayor proposed selling fire stations below market value for free schools, was accused of corruption when selling the Royal Albert Docks, and depending on who you believe either flogged off police buildings too cheaply or put huge cash receipts ahead of affordable housing.
The trouble is that the Mayor hasn’t set a consistent strategy across the GLA Group (including City Hall as well as the police, fire and transport services), leaving each deputy mayor or commissioner to chase their own aims when reviewing their assets. That’s a huge missed opportunity, because a visionary Mayor could help meet the growing need for school places, or set-up a network of community-owned housing, or even build a property empire generating a big income each year.
The GLA’s asset strategy aims “to influence and deliver the stimulation of new homes, regeneration and economic growth”, theoretically putting these above getting income from rents, leases and sales.
How consistently is this applied? Not very. The GLA is selling off land at the Royal Albert Dock, but for a pretty conventional big business development with very little affordable housing and low cost workspace. By contrast, the GLA crowbarred London’s first Community Land Trust into its St Clements Hospital site in Tower Hamlets, after much lobbying from London Citizens and Jenny Jones, among others.
The Mayor has been content to let MOPAC and TfL plough their own furrows.
Under Stephen Greenhalgh, MOPAC has chased big cash receipts by selling off police buildings it deems surplus to requirements. They are using this cash to plug a growing hole in the police budget. I’m worried that this demand on the cash is motivating a rush to dispose of assets that might still be operationally useful, or that could be used for something better
Why not sell former police buildings to housing associations or co-operatives at rock-bottom prices to provide new social rented housing? Why not sell them at below market value to councils to help with the provision of school places?
The Mayor is doing just that with fire stations, asking LFEPA to sell Southwark fire station on the cheap to a free school. I don’t object in principle, but did he talk to the local council about all the available options, or push for this to meet his pledge of setting up 10 free schools?
TfL is aiming to build its property empire into a cash cow, bringing in £1.1bn up to 2025 through private sector partnerships. This will help them to “bear down” on fares, as the Mayor put it, and fund infrastructure.
A lot of this will just be a continuation of leasing space to shopkeepers and office providers. But this means they are likely to prioritise income over other possible ends. Just as Network Rail have been evicting small local businesses from railway arches across London (now causing a storm of protest in Brixton), so TfL could easily become a money-grubbing landlord rather than a valued partner for small enterprise and the local economy.
TfL is also following the GLA in setting up a small panel of pre-approved partners. This entrenches the power of a cartel of big builders and property companies who have been taking an ever-growing share of the cake in London over recent decades. The Mayor’s housing strategy talks about the need to diversify the industry, so why is he doing the opposite with his own assets?
These are just a few examples of the contradictions and missed opportunities in the GLA group’s approach to assets under this Mayor.
It’s no easy business working out the right balance between the many competing aims. But the Mayor needs to ensure there is more consistency across his ward. He alone can bring together these disparate responsibilities for housing, policing, fire safety and transport into a coherent and consistent approach, getting the most out of public assets.