“Land now 51% of UK’s net worth – a huge transfer of wealth to landowners, say campaigners”

“A dramatic rise in land values pushed Britain’s wealth to a fresh high of more than £10tn last year, highlighting the huge gains made by developers in property hotspots across the UK.

From London and the home counties to Cambridge and popular parts of Devon and Cornwall, land values have become the single largest element of wealth, dwarfing household wealth locked up in property and financial savings.

Official figures showed that the UK’s net worth rose by £492bn between 2016 and 2017 to £10.2tn, with the lion’s share of the increase accounted for by a £450bn jump in the value of land.

The rise continues a trend since 2012 that has pushed the average assets held by each Briton to £155,000, up £6,000 from 2016.

The Office for National Statistics said consistent increases in the value of land meant it accounted for 51% of the UK’s net worth in 2016, higher than any other G7 country that produces similar statistics.

In France, which has a land mass twice the size of the UK, land values account for 41% of wealth while in Germany they account for only 26%.

This week several landowners have outlined plans for developments, including the Duke of Westminster’s Grosvenor Group, which said it was taking a growing interest in residential property outside central London.

It said it would build thousands of homes on greenfield sites around Oxford and Cambridge, which are to benefit from Treasury plans to connect the two university towns with a cross-country rail link.

Analysts said much of the increase in land values was in response to Britain’s rising population, which has put pressure on the government to back house builders seeking to develop green field sites and farmland in south-east England and other development hotspots around the country.

The price of farmland can increase by 100 times when developers succeed in persuading ministers to re-designate it for housing. Areas of London that were previously derelict, especially in the east of the capital, have seen huge rises in values as regeneration efforts and improved transport links have fed into property prices.

Commercial property has also enjoyed an upswing in value since Britain’s recovery following the 2008 banking crash, more than offsetting recent declines in much of the retail sector.

The ONS figures go beyond a study last year by Lloyds bank that showed that Britain’s net worth had climbed above £10tn for the first time, but did not single out the value of land.

The steady increase in land values is expected to trigger further calls for a land value tax or new rules allowing local authorities to reap the rise in values by allowing them buy land earmarked for development.

A growing number of thinktanks and politicians support imposing a tax that would take a slice of rising land values.

The Institute for Fiscal Studies has urged the Treasury to develop a scheme, while the Green party co-leader, Caroline Lucas, has tabled a private member’s bill proposing a land value tax. Labour said in its 2017 election manifesto that it would consider a similar tax.

Mark Wadsworth, the head of the Campaign for Land Value Taxation, said: “The minority with a vested interest in high land values will no doubt celebrate higher values, saying that is shows the importance of land to the UK economy.

“In truth, land values are not a net addition to national wealth, they merely represent the benefits that accrue to landowners because of government spending on public services funded out of general taxation; land values are actually just a measure of ongoing transfers of wealth from taxpayers to landowners and a zero-sum game.”

https://www.theguardian.com/business/2018/aug/29/uks-wealth-rises-as-land-values-soar-by-450bn-in-a-year

Greater Exeter Strategic Plan: consultation about consultation and Skinner has a pet project other councils are ignoring

Correctiin: headline changed from Diviani to Skinner as it is assumed it is new Deputy Leader who wants a sports venue. Well, he is known to be a rugby fan!

“The vision is about to start to decide specific issues in October, with the aim to prepare a draft plan for consultation in the summer of 2019 after the local elections.” …

For the GESP area, 2,600 homes a year are needed, meaning over the 20 years of the plan to 2040, around 57,200 new homes will be built. …

[Here follows a masterpiece of shooting down Diviani’s idea for a “major sporting venue” ncely!]

“In previous discussions regarding the GESP, the Deputy Leader of East Devon District Council has put forward the idea of developing a regionally or nationally significant sports arena and concert venue within the GESP area.

The consultation does not specifically refer to this concept as work in understanding the need for such a facility and how it could be delivered are at an early stage as it is focusesd at high level issues and does not talk in any detail about specific proposals.

It is however considered that the consultation asks about public aspirations for the delivery of infrastructure thus enabling respondents to raise the opportunity for such a facility and make suggestions for what it would be. …”

https://www.devonlive.com/news/devon-news/could-57000-new-homes-exeter-1948541

Dis-unitisation: Bankrupt Tory council splits in two

Owl says: do debts go 50/50?

“Stricken Northamptonshire County Council has voted to abolish itself in the first of a series of meetings due this week to settle the authority’s fate.
Councillors backed the proposal to replace the county and its districts with two new unitary councils. These would be North Northamptonshire, covering Corby, East Northamptonshire, Kettering and Wellingborough, and West Northamptonshire comprising Daventry, Northampton and South Northamptonshire.

Each district has a meeting due this week to vote on the proposal, which will then go to communities secretary James Brokenshire.

A report to the county council noted that Max Caller, the inspector appointed to report to the government on Northamptonshire’s financial plight, had said: “The problems faced by NCC are now so deep and ingrained that it is not possible to promote a recovery plan that could bring the council back to stability and safety in a reasonable timescale” and that a unitary reorganisation should follow.

This week’s report said: “The county, borough and district councils are making this [unitary] proposal – not out of a positive ambition for this radical structural change, but instead out of a pragmatic and responsible approach to the Government’s clearly-signalled direction of travel.” It warned too that unitary reorganisation would not in itself solve the county’s financial problems.

“There is currently a very significant imbalance between revenue income and expenditure at NCC, and this will have an impact on sustainability of the new unitaries if the current financial position is inherited by them in 2020-21,” it said.

“It is essential that NCC delivers a balanced revenue position and sustainable services that can be inherited from day one. “

Northamptonshire in July took the rare step of issuing a second section 114 notice to limit spending.

The government in May imposed commissioners to run parts of the council after Mr Caller’s report highlighted serious flaws in its operation.”

http://localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=36537%3Anorthamptonshire-councillors-vote-for-plan-to-split-county-into-unitaries&catid=59&Itemid=27

“Grant Thornton [EDDC’s past and present auditor] in record fine as auditing scandal spreads”

“The scandal around City auditors spread beyond the big four on Wednesday as Grant Thornton was slapped with a major fine for serious conflicts of interest with two audit clients.

The Financial Reporting Council fined the professional services firm £4 million, reduced to £3 million after a settlement discount. Three senior staffers and a former partner had admitted misconduct in the handling of financial audits for Vimto drinks-maker Nichols and the University of Salford.

The ex-partner, Eric Healey, was slammed for “reckless” behaviour after taking jobs on the audit committees of Nichols and the university despite continuing to work as a consultant to Grant Thornton after retirement. The accountancy firm continued as auditor to both, creating “serious familiarity and self-interest threats”.

The FRC delivered the damning verdicts five years after it opened the probes, which cover 2010 to 2013.

The £4 million penalty is the largest imposed on an accountancy firm outside of the big four — PwC, KPMG, Deloitte and EY. The costs will come out of partner profits.

It is the latest in a series of reprimands for Britain’s biggest auditing firms — just last week KPMG was fined £3 million for its audits of Ted Baker — as the FRC faces calls to reduce the big four’s dominance.

Healey’s simultaneous engagement with Grant Thornton, Nichols and the University of Salford “resulted in the loss of independence in respect of eight audits over the course of four years,” said the FRC.

It added: “The case also revealed widespread and serious inadequacies in the control environment in Grant Thornton’s Manchester office over the period as well as firm-wide deficiencies in policies and procedures relating to retiring partners.”

Healey, who retired from Grant Thornton in 2009, joined the audit committees of the University of Salford and AIM-listed Nichols in 2010 and 2011 respectively. The former role was unpaid and he got £22,000 per year for the latter.

The FRC said it has issued a £200,000 fine (discounted for settlement to £150,000) to Healey and excluded him from the Institute of Chartered Accountants in England and Wales for five years.

Three senior statutory auditors at Grant Thornton, Kevin Engel, David Barnes, and Joanne Kearns, were reprimanded and fined £75,000, £52,500 and £45,000 respectively (after discount for settlements).

Grant Thornton said: “Whilst the focus of the investigation was not on our technical competence in carrying out either of these audit assignments, the matter of ethical conduct and independence is equally of critical importance in ensuring the quality of our work and it is regrettable that we fell short of the standards expected of us on this occasion. As we have since made significant investments in our people and processes and remain committed to continuous improvement in this regard, we are confident that such a situation should not arise in the future.”

Source: Evening Standard

Barclays refuses mortgages on controversial Taylor Wimpey new homes – and Taylor Wimpey share price INCREASES!

“Scandal hit Taylor Wimpey has suffered a blow after Barclays refused to offer mortgages at a flagship development because of fears over leaseholds.

The housebuilder is seeking buyers for its Chobham Manor site in the Queen Elizabeth Olympic Park in London but the properties come with complicated leases.

Barclays told one family looking at a property they could not have a mortgage because of a clause which might mean the lease was terminated if one of Taylor Wimpey’s subsidiaries went bust.

If that happened the bank would be unable to get its money back.

Taylor Wimpey has pledged to fix the problem but would not say how many properties were affected at the site, where prices are as high as £1million.

The firm has been criticised for selling leasehold homes with unaffordable ground rents.

Shares rose 1.1% or 1.85p to 170.65p.”

http://www.thisismoney.co.uk/money/markets/article-6108205/Taylor-Wimpey-hit-leasehold-woes.html

“England’s means-testing for care is the world’s harshest”

“Older people in England who need long-term care have to pass one of the harshest means tests in the developed world to gain state support, a study found.

Older people and their families are more likely than their counterparts in many other countries to pay large care bills because of the way social care is funded. A generation of elderly people missed out on better long-term care as successive governments ducked reform, leaving England “the poor man of Europe” for social care, it said. England also fared badly when compared with Japan.

The report by Incisive Health, a consultancy, for Age UK looked at the funding and effectiveness of social care in developed countries with similar demographic challenges to England of an ageing population and falling birth rate. The government plans to publish reforms to England’s social care this autumn, while cash-strapped councils have cut the fees they pay for care, leaving many care homes struggling.

The study concluded that England’s social care system was behind Germany, Japan and France, whose governments define national entitlements, and Spain and Italy where services vary by region. These countries each provide some basic support to elderly people regardless of wealth, use a flexible means test or limit total costs. In England care costs must be met in full by anyone with assets above £23,250.

France had the most progressive social care system, funded by national insurance, Incisive Health concluded. Payments are collected as part of income tax with top-up payments from individuals using a gradual means test or the private insurance market.

Germany’s system was judged the best funded, paid for by an income tax levy of 2.55 per cent, of which half is paid by employers.

The study praised Japan for expanding support to its ageing population, with half the funding from general taxation and a third from an additional levy on people aged between 40 and 65. People are also required to pay 10 per cent of their care costs.

The authors said that social care in Spain, which is organised and funded regionally with some national taxation, had been good until its government made cuts when the economy stalled.

Italy has a highly localised system, with many areas paying cash directly to families but the report said that in poorer parts of southern Italy these payments were often used to supplement incomes rather than for care.

Caroline Abrahams, Age UK’s charity director, said: “Sadly, this report shows that England has been left behind in the race to update the funding of care for older people, compared to some other similar nations. As a result, our older people and their families are paying more and bearing a lot more of the risk of needing expensive long-term care.”

Source: Times, pay wall