What happens when developers pay planners for pre-planning “advice”?

Guardian letters today. We also have this “premium service” – our prices go from £150 (inc VAT) to £900:

Click to access pre-app-charging-schedule-jan-2017.pdf

The letter:

“Further to Simon Jenkins’ article (Wine and dine democracy is now on trial – and about time, 23 February), there is another facet of this situation. Milton Keynes council now offers its residents and prospective developers the possibility of a premium planning service. If we wish to ease the planning and development process we can peruse the biographies of its planning staff on the council website and pick a suitable one. Prices on the site range from £150 to £7,500 plus VAT. The council is “dedicated to building relationships with our customers and therefore have found that some Applicants and Agents like to have the continuity of working with specific Planning Officers”.

This may work very well in some cases by improving planning efficiency, but where is the oversight if Milton Keynes residents find that neighbourhood plans are ignored? The ethos of our initially well-planned town is disappearing while developers who ignore the unique character of the place are helped to get planning permission by a planning authority that has enjoyed a close, paid-for relationship with them.

No doubt the planners show impeccable integrity but, if there is insufficient oversight, the temptations must be there.
Gill Boothy
Milton Keynes, Buckinghamshire”

https://www.theguardian.com/politics/2018/feb/26/the-dangers-of-paid-access-to-council-planning-officers

No vote allowed on May’s “cash for votes” for DUP

“Theresa May will hand out the £1bn in her “cash for votes” deal with the Democratic Unionist Party without MPs’ prior approval, The Independent can reveal, putting the Government at risk of legal action.

The Commons will only vote after slices of the funds have been allocated to Northern Ireland, and will be denied a single vote on the overall £1bn – despite the Government conceding last year that Parliament’s “authorisation” is needed.

The decision has been condemned for leaving MPs “cut out of approving the deal”, which gives Northern Ireland a huge spending boost in return for Ms May being propped up in power.” …

“South West ‘could suffer more than other regions’ after Brexit”

Good luck with that doubling of productivity, Local Enterprise Partnership! (see post below)

“The South West could be hit harder than other parts of England when the UK leaves the EU, according to panel members at a one-off Brexit discussion convened by CIPFA in Bristol.

High numbers of EU workers could be lost from industries in the region, which must get better at ‘fighting its own corner’, attendees at the event on Friday last week heard.

Kate Kennally, chief executive of Cornwall Council, pointed out the South West had a growing number of tech start-ups but it was not good at promoting its own industries.

“We have a big part of the UK that doesn’t have a big voice,” she said.

She added Cornwall voted leave because of “a sense of profound insecurities about public services” and that “this could be a moment where there needs to be a good deal of bravery”.

Kennally also pointed out: “Exeter, Bristol, Plymouth are the cities most reliant on exporting to the EU.”

Nigel Costley, regional secretary of the trade union federation the TUC, said: “I don’t think we are well equipped to respond to [Brexit].

“I fear we are going to be the losers in the South West. I do not see us fighting our corner very well. …”

http://www.publicfinance.co.uk/news/2018/02/south-west-could-suffer-more-other-regions-after-brexit

Our LEP expects our productivity to double – something never done anywhere else in the UK!

“… The Productivity Strategy aims to double productivity in the area over 20 years, focussing on themes including leadership, housing, connectivity, infrastructure, skills and training. It looks at growth, capitalising on the area’s distinctive assets and maximising the potential of digital technology.

Cllr Fothergill said: “We can do some of this ourselves but some aspects will need the support from Government which is why the Joint Committee is so important. …”

https://www.devonlive.com/news/devon-news/south-west-aims-double-productivity-1265805

Right! So, that’s ok then – the government will achieve something here they can’t achieve anywhere else!!!

Will dredging problems affect Exmouth’s water sports centre?

“Dredging from a marina in Exmouth is being halted after sands on Teignmouth’s beach turned black at the weekend.

The contamination was a shock to local residents and businesses ahead of the all-important Easter break.

The town has worked hard to drive up bathing water quality standards in recent years but local people were annoyed when the Marine Management Organisation (MMO) granted a licence for the disposal of thousands of tonnes of silt from the marina in Exmouth close to their beach.

The MMO said it was suspending the licence “relating to the dredging of Exmouth Marina and disposal of materials at the Sprey Point site”.

It added: “The suspension will be active immediately once the notice is served on the licence holder.”

Heavy seas have washed away most of the black silt in the meantime.”

17.48 hrs
http://www.bbc.co.uk/news/live/uk-england-devon-43129090

Last legs for Thelma Hulbert gallery?

Owl says: The gallery, in Honiton, has swallowed up around £500,000 of our council tax money over the last few years. Could The Beehive (also a gobbler of funds in the past) perhaps house the gallery’s art and activities?

Or, here’s a thought: display it in the new £10 million HQ currently under construction in Honiton!

“Unprecedented increases in council tax starting in April will not offset cuts to services including children’s centres and libraries, local authorities have warned.

The Local Government Association (LGA) said councils in England would raise an estimated £1.1bn through higher council taxes in 2017-18, but this would not cover the £1.4bn lost through cuts to central government funding plus the higher wage bill of £1bn.

Nearly half of English councils with responsibility for providing social care for adults and children will increase council tax by the maximum 5.99% allowed – 2.99% for general council tax plus a further levy of up to 3% to pay for the care of older and disabled adults – but this will not prevent further cuts to services, according to the LGA.

Councils will continue to reduce or close services such as children’s centres, libraries, leisure centres, parks, museums and road repairs to plug growing gaps in adult and children’s social care and homelessness services, it says.

The widespread emergence of what some councillors have dubbed “pay more, get less” budget settlements comes as town halls struggle to balance the books after years of cuts in core government funding.

Northamptonshire county council effectively declared itself bankrupt earlier this month after admitting that rising costs and shrinking income made it unable to set a legal budget.

The council must set out revised plans for cuts at a meeting this week after an auditors report warned that its existing proposed budget plans were “not credibly achievable”.

Northamptonshire’s predicament highlights how councils are increasingly reliant on one-off measures such as dipping into reserves, or selling buildings and land, to meet the spiralling cost of social care. Those pressures are being compounded in some cases by the failure to deliver savings with existing cuts.

The LGA said 147 of the 152 English authorities that provide social care services would levy a 3% council tax precept from April to raise extra cash for the care of older and disabled adults. Although this will raise an extra £548m, it will be wiped out by the cost of meeting the national minimum wage.

These councils face additional costs estimated to be at least £400m over the next 12 months as result of a legal judgement that requires care employers to pay the minimum wage to carers working sleep-in shifts, backdated for six years.

Out of the 152 “social care” authorities, 108 also plan to increase general council tax by between 2.95% and the maximum 2.99% allowed. This will raise an estimated £548m. Five councils have said they will freeze council tax for 2018-19. …

… A spokesman for the Department of Housing, Communities and Local Government said: “As part of our finance settlement, we are delivering a real-terms increase in resources to councils over the next two years, more freedom and fairness, and greater certainty to plan and secure value for money.

“We want to work with local government to develop a new funding system for the future and encourage councils to submit responses to the review currently under way.”

England’s councils have experienced a 40% cut in central government funding since the start of the decade and face a £5bn funding gap by 2020.

The Local Government Information Unit thinktank warned this month that many English local authorities were teetering on the edge of financial crisis.”

https://www.theguardian.com/society/2018/feb/26/council-tax-hikes-will-not-stop-cuts-to-local-services-authorities-warn

“Extra council tax income in 2018/19 will not protect under-pressure local services”

“Communities across the country will see many of their local services face further reductions this year despite paying more council tax, the Local Government Association warns today. …

With local government facing an overall funding gap that will exceed £5 billion by 2020, the LGA is warning these council tax rises will not prevent the need for continued cutbacks to all local services this year. Councils will also have to continue to divert ever-dwindling resources from other local services, including filling potholes, maintaining our parks and green spaces and running children’s centres, leisure centres and libraries, to try and plug growing funding gaps in adult social care, children’s services and homelessness support.

The LGA said the Government needs to urgently address the growing funding gaps facing local services and provide the financial sustainability and certainty needed to protect the local services our communities rely on by committing to allow local government as a whole to keep every penny of business rates collected.

LGA Chairman Lord Porter said

“Since 2010, council tax bills have risen by less than inflation and other key household bills. But faced with severe funding pressures, many councils feel they are being left with little choice but to ask residents to pay more to help them try and protect their local services.

“The extra income this year will help offset some of the financial pressures they face but the reality is that many councils are now beyond the point where council tax income can be expected to plug the growing funding gaps they face. Extra social care funding will be wiped out by the significant cost pressures of paying for the Government’s National Living Wage and extra general council tax income will only replace a third of the central government funding they will lose this year.

“This means councils will have to continue to cutback services or stop some altogether to plug funding gaps.

“We have repeatedly warned of the serious consequences of funding pressures facing services caring for the elderly and disabled, protecting children and tackling homelessness for the people that rely on them and the financial sustainability of other services councils provide. It is unfair to shift the burden of tackling a national crisis onto councils and their residents.

“The need for adequate funding for local government is urgent. To maximise the potential of local government and protect local services from further cuts, funding gaps must be properly addressed and local government as a whole must be allowed to keep all of the business rates it collects locally each year to put it on a sustainable footing.”

https://www.local.gov.uk/about/news/extra-council-tax-income-201819-will-not-protect-under-pressure-local-services

“Party’s over for City jollies” but alas not for local government schmoozing

A short article in today’s Sunday Times Business section notes that new EU rules now forbid fund managers and analysts from accepting hospitality beyond a minimal level – it has to benefit “ordinary” customers and if over a reasonable limit it is considered “an inducement”. It goes on to say that most firms have set £100-150 a head as the maximum in London.

Fortunately, our local Tory councillors can rest easy as it does not apply to local government, so they can still take their Exeter Chiefs rugby tickets and their meals with developers and the like – which never seem to cost more than £25 a head when declared (where are they going – Nando’s or perhaps Frankie and Benny’s? And DEFINITELY t-total!).

Source: Sunday Times Business supplement (pay wall)

Dominic Lawson: Big bonuses the fault of former Chancellor and help-to-buy

Owl says: While Lawson blames Osborne it should be noted that May and Hammond have not closed the loophole … which could easily be done …

“At first he said he deserved his £110m bonus, and resisted all the pressure to assign a large chunk of it to charity. Then he said he would give some of it to good causes, but not how much (“a private matter”). Finally, on Friday, after three months of hectoring by the media and investors, he said he’d forgo . . . £25m.

I’m referring to Jeff Fairburn, chief executive of the housebuilder Persimmon and the principal beneficiary of a remarkably generous share-based incentive scheme that has sprinkled more than £500m of equity around 140 of the company’s “top individuals” as if from a fairy godmother’s wand. Except it doesn’t come out of thin air, but by diluting all the ordinary shareholders’ stakes in the business.

Their representatives — pension fund managers, principally — have spent those past three months moaning about it. But when the incentive scheme was drawn up in 2012 — linking the rewards to share price performance and dividend payments — it was approved by 85% of shareholders. So Fairburn’s resistance is understandable; and, indeed, Persimmon’s investors have done fine — since 2012 their shares have quadrupled in value.

But the main reason is not the ingenuity of Fairburn and his colleagues. No, if there was a fairy godmother in this, it was George Osborne. As chancellor, he launched the help-to-buy scheme, which economically crazy but politically astute subsidy supports about half of Persimmon’s recent house sales. We as taxpayers are not directly funding those £500m worth of bonuses, but we have underwritten the personal mortgages that made that colossal windfall possible. Don’t mention it, Jeff: happy to help.

The person most annoyed by this is actually a lot richer than Fairburn — and another housebuilding boss. Steve Morgan, the head of Redrow, complained: “For somebody who has not taken a salary for 20 years it sticks in the craw, being called a greedy housebuilder because of that one company.” And why has Mr Morgan not taken a salary for 20 years? Because he founded Redrow in the 1970s and is worth about £830m. He would be a billionaire (according to the compiler of The Sunday Times Rich List) had he not passed £226m of Redrow shares to his charity, the Steve Morgan Foundation, which supports disadvantaged and disabled people in north Wales and northwest England.

Here we see, in instructive proximity, the sort of wealth that compels admiration and the sort that provokes contempt. That stark divergence is not because Morgan has been philanthropic. It is because he has created his own business and, at the outset, would have been at personal risk if it had not worked out (perhaps, like so many entrepreneurs, he had offered whatever he owned as security for bank loans). Fairburn had a good story to tell, too: he began in the building trade as a youth training scheme apprentice, studying to become a quantity surveyor while mixing concrete. But he did not create the firm of which he is, after all, just another employee: he is taking the rewards of entrepreneurialism without the risks.

He is not, in the true sense of the word, a capitalist. But Morgan is. And the point is that while there has in the decade since the credit crunch been a gale blowing the sails of those who denounce “capitalism”, the public hostility is actually — and rightly — directed against those who are not capitalists (as Karl Marx defined them), but who have seized capital from its owners. After all, that is what the discredited banking executives, both here and in America, did. They leveraged the capital of which they were merely managers, to generate vast bonuses for themselves: when that blew up the banks, the exploded corporate balance sheets were rescued by the taxpayer . . . while the executives kept all their winnings.

In his latest book, Skin in the Game (which I review today) Nassim Nicholas Taleb calls this “the Bob Rubin trade”, in (dis)honour of the former US Treasury secretary who kept his $120m compensation from Citibank: “When the bank, literally insolvent, was rescued by the taxpayer, he didn’t write any cheque — he invoked uncertainty as an excuse.”

The risk — to the market system now under attack from the unreconstructed Marxists at the helm of the British Labour Party — is that the bonny baby of entrepreneurial endeavour will be thrown out with the dirty water of executive self-dealing.

Much of that self-dealing — which I first wrote about as long ago as 1989 in a Spectator cover piece titled “How the bosses help themselves” — is promoted by the argument that it makes senior managers behave more like proper owners, rather than mere time-servers. Specifically, the executive compensation committees of FTSE companies have argued that through the awards of share options, the interests of those managers are aligned with the investors who, collectively, own the businesses.

It is a theory generally accepted and, like many such established doctrines, false. The ordinary shareholders have actually paid for their equity, so if things go pear-shaped, they stand to lose what they have invested; and those who have created businesses can lose everything, even their homes. But share options are free. There is an upside, but as no capital is at risk, no real downside.

One result is that share option schemes have encouraged undue risk-taking by executives, for example by borrowing heavily to finance acquisitions — which is what happened at Carillion. It also encourages a more short-term approach to business-building than a true owner would adopt: share option schemes tend to last for a few years, not the decades that a good business should be measured in.

I should confess, at this point, to having been a beneficiary of just such a scheme. When I was an executive of the Telegraph group I was assigned, for the first and only time in my life, some share options . . . and within just a few months they were most unexpectedly realised when the majority shareholder decided to buy out everyone else. Without any effort on my part — other than just continuing to do my job of editing a newspaper — I was suddenly presented with a cheque sufficient to pay off my mortgage.

I was delighted, of course. But it also felt wrong, somehow. I suppose I might feel the same way if I won the national lottery, although that is most unlikely to happen, and not just because of the odds: I don’t enter it. At least the lottery winners have paid for their stake. We should expect our best-remunerated business leaders to have done the same.”

Source: Sunday Times (pay wall)