“HS2 rail chief Terry Morgan faces sack over spiralling costs”

The chairman of HS2 is facing the sack less than five months after his appointment because of fears that costs are spiralling out of control.

Sir Terry Morgan is also set to be removed as the chairman of Crossrail, the ambitious line linking east and west London, relieving him of leadership of two of the UK’s highest-profile infrastructure projects, according to a report.

Theresa May was expected to move against Morgan, who was described as “world-class” by Grayling when he appointed him in July to HS2, the planned high-speed rail link between London and Birmingham. A source said that Morgan was expected to leave both posts within weeks.

The news was first reported by the Financial Times on Friday. It is thought that both Grayling and the chancellor, Philip Hammond, had declared they had no confidence in Morgan’s leadership and urged May to remove him.

The FT quoted a government official close to HS2 as saying: “They told the prime minister they have no confidence in him and she agrees. It is only a question of finding the right moment to announce it.”

Downing Street, the Department for Transport and HS2 declined to comment. The DfT said: “We would not comment on personnel matters.” …

Grayling had allied himself closely to Morgan in the summer. “Sir Terry’s appointment as chair of HS2 ensures that we will continue to see world-class leadership in an exciting period for one of Europe’s most significant infrastructure projects, helping deliver huge economic growth and improvements for passengers across the country,” he said when he announced the decision.

Morgan, the transport secretary added, had a “wealth of experience and expertise”, as well as a “respected reputation and enthusiasm”. He cited Morgan’s work on previous infrastructure projects, including upgrading several London Underground lines and working at BAE Systems. Morgan said the appointment was a “privilege” and promised HS2 would “help transform this country”.

But concerns were raised about its direction after it emerged days after Morgan’s appointment at HS2 that Crossrail was running about £600m over budget. And, in August, the government’s infrastructure adviser said ministers should spend an extra £43bn on projects linked to HS2 in order to make it worthwhile.

In an article for the Sunday Telegraph, the chairman of the National Infrastructure Commission, Sir John Armitt, said the government “cannot simply construct a new high-speed rail line and leave it at that; to get the biggest bang for our buck, we need to think about the whole journey that passengers will take”.

He went on: “Once people reach the end of their HS2 journey and travel into the city they are visiting, on current form, they would in many cases face inadequate public transport links and congestion on the roads.” To deal with that, he suggested handing the cash to local areas to improve their infrastructure.

There were further reports that HS2’s budget could eventually spiral to £80bn. The Sunday Times said a leaked report had warned that the official budget of £56bn for the project may have to be significantly increased.”

https://www.theguardian.com/uk-news/2018/nov/30/hs2-rail-chief-terry-morgan-faces-sack-over-spiralling-costs

Construction groups in trouble as banks tighten lending

“Shares in the construction firm Kier, which is working on major infrastructure projects such as HS2 and Crossrail, have plunged by a third after it announced an emergency plan to raise £264m to cut its debt pile.

The company’s chief executive, Haydn Mursell, said it had been forced to act because banks had performed a “180-degree turn” since the failure of Carillion and were planning to reduce or stop lending to the construction sector.

Mursell warned that other construction companies could be caught out by the sudden credit freeze unless they also took action to strengthen their balance sheets.

Kier, which employs more than 16,000 people and took on Carillion’s share in HS2 and smart motorways upon its collapse, stunned the markets by warning that the risk posed by its £624m debt had increased, forcing it to raise money.

It would go to shareholders for the cash but has secured promises from a group of financial institutions including Santander, HSBC and Citigroup to buy shares if investors did not want them.

Its shares dived by 32.5% to 508p, cutting its stock market value by £329m to £492m.

Kier, in a statement to the stock market, said its debt position had become more risky amid greater reluctance among financial institutions to lend to the construction sector.

“Nothing has changed in our business, but everything has changed in our credit markets during the month of October,” said Mursell. “A lot of our banks were affected by Carillion and for a few months they were reeling from that. Over the summer they talked about wanting reduction.”

He said the banks’ loss of appetite for lending had accelerated recently to the point where they had taken a “180-degree turn” compared with last year, when Kier was able to extend lending facilities.

Mursell added that suppliers were already keeping a close eye on construction companies’ finances and seeking earlier payment where possible, putting further pressure on balance sheets. …”

https://www.theguardian.com/business/2018/nov/30/kier-construction-shares-lose-30-on-plan-to-raise-cash

Yet Another Planning Saga at Greendale!

Clearly FWS Carter and Sons, the owners of Greendale Business Park are not taking “no” for an answer!

They have submitted two further retrospective planning applications 18/2661/COU and 18/2660/COU for two compounds on Hogsbrook Lane between Greendale Business Park and their farm at Hogsbrook.

There is a very long history going back 12 years for these two Industrial Compounds known as Compound East 6 at Greendale Business Park.

The area was an agricultural field up to 2007 when a Gas Pipeline Contractor building a new Gas Main through Devon used a “permitted development rights” application to construct a service yard for contractor’s equipment and storage, but with an agreed condition that it had to be returned to agricultural use following the completion of the project.

However, FWS Carter and Sons submitted a planning application APP 09/0099/FUL for the retention of hard standing and security fence for growing fruit! The retention was claimed by the applicant to be justified as fruit growing was an agricultural use and the project needed security fencing and a hard standing.

However, immediately after the approval, the site was used for the storage of scrapped vehicles by Woodbury Carbreakers. As the site did not have the appropriate planning nor Environment Agency permit a court case followed against the tenant and the site was eventually cleared after 3 years.

The Site Owners then used it for commercial and industrial purposes and finally submitted a retrospective planning application App 16/0568/FUL for Storage of HGVs in the Fruit Farm Enclosure. However, this application was refused. East Devon District Council were informed that the applicant would appeal. The applicant had 6 months up to 23/11/2016 to lodge an appeal, but no appeal was submitted, but the industrial use continued.

During this time EDDC Local Plan was approved in 2016 which included Policy E7 which allows extensions to Employment sites (except Greendale and Hill Barton that were considered too large for their rural locations). The East Devon Villages Plans approved in Feb 2018 also included a section on the “Greendale Employment Area” which excludes these specific locations off Hogsbrook Lane.

FWS Carter and sons in 2017 then applied for a Planning Variation order 17/2350/VAR to remove a planning condition to the original 2009 application which required the security fence and hardstanding to be removed if the fruit farm business failed. This application was held up for approximately 12 months due to legal matters. The Application was finally agreed in Oct 2018 but with a condition stating that the use must remain agricultural.
East of Compound 6 and further from the Hogsbrook Lane is an area that over the years has become a storage area for Industrial and agricultural products and equipment. It was originally used for the Gas Pipe line contractors and following their departure in 2009 it has been used by the landowners and their tenants.

In 2017 the owners submitted a Certificate of Lawfulness 17/2441/CPE. These Certificates are used by landowners who have used a specific area for more than 10 years without the correct planning permission and therefore are able to claim that the current use is now “lawful” after 10 years illegal use.

However, it was highlighted to the Planning Authority by the local “Woodbury Salterton Residents Association” that some of the use was agricultural and anyway the Gas Pipe Line Compound was “permitted development”, so the application failed the 10-year time requirement. Therefore, the submission failed.

It is normal practice that a planning Authority would inform landowners that an “Enforcement Notice” would eventually be served in cases like this where there has been breaches in planning regulations.

To presumably delay the Enforcement Notice, FWS Carter and sons have now submitted two further retrospective applications for a change of use application 18/2661/COU at compound East 6 and a further application 18/2660/COU for the compound relating to the failed “Certificate of Lawfulness”

Therefore, the Enforcement Notices will not be served whilst these applications are considered, with the decision to serve the Enforcement Notices being subject to the decision on these latest two applications.

The Saga of Hogsbrook Lane therefore continues!

A parish councillor says planning system is broken

Guardian letters:

“The planning system is broken. At the London launch this week of Nick Raynsford’s Review of Planning in England, speakers described demoralised councillors and planners; frustration over constant changes of policy; and anger that the system is not delivering what people want. Parish councils are at the sharp end of this failure to reform the system. Communities here in Kent and across Britain are facing the threat of opportunistic, unplanned development. Landowners and developers are exploiting the fact that it takes time to prepare, consult on and get approval for a new local plan, to bring forward applications for housing development on unsuitable sites.

Additionally, where a local authority does not have a five-year “housing supply” (an arbitrary figure and a rather nebulous concept as the number of houses in the pipeline fluctuates continually), the new national planning policy framework (NPPF) dictates that councils must grant permission, unless there are overriding reasons to refuse. A developer-led planning process, crude housing targets, no joined-up regional thinking, and flawed “consultation” has resulted in communities being pitted against each other as they try to protect the environment and their health.

The Raynsford review makes 24 recommendations to create a simpler, fairer system. These include strategic regional planning, a (limited) community right to challenge in an attempt to redress the balance of power, and a duty on local authorities to plan for high-quality and genuinely affordable homes. I hope the government will listen carefully to the arguments for reform. Change is desperately needed.
Richard Byatt
Chair, planning committee, West Malling parish council, Kent”

https://www.theguardian.com/society/2018/nov/30/our-broken-housing-market-urgently-needs-fixing

“‘Staggering’ £2million spent on gagging former staff at Devon County Council”

“A Freedom of Information Request submitted by the Exmouth Journal has revealed between 2013 and 2017 the council (DCC) spent £1,965,370 on 145 separate settlement agreements, often referred to as gagging orders.

The confidentiality clauses in these agreements are usually agreed when an employee leaves an organisation due to a disagreement, workplace issue or redundancy.

None of the settlement agreements into which DCC entered in the last five years were for staff being made redundant. …”

https://www.exmouthjournal.co.uk/news/2million-gagging-staff-at-devon-county-council-1-5801603

Swire – right place, right time …?

“City lawyers told to target emerging economies in developing countries post Brexit”

City lawyers should sell their services to emerging economic powers such as Nigeria and Kazakhstan to generate “vital” earnings for the UK after Brexit, the Justice Secretary has told legal chiefs. …”

https://www.standard.co.uk/news/london/city-lawyers-told-to-target-emerging-economies-in-developing-countries-post-brexit-a4004466.html

What does this have to do with East Devon? Nothing.

What does it have to do with our MP, Hugo Swire? Everything.

The (currently non-trading) company he took such a long while to put on his Register of Interests (co-director, ex-Energy Minister and spokesperson for Russian oligarch Oleg Deripaska) has been set up to get involved with …..
drumroll ….. emerging economies!

https://eastdevonwatch.org/2018/06/24/swires-mate-and-co-director-continues-to-court-the-wrong-kind-of-controversy/

Why falling house prices can be a bad thing

“… An analysis released this week by the property firm Savills spelled out just one of the reasons why [a downturn in property prices could be a bad thing].

A property downturn could, it estimated, reduce the number of affordable homes being built by a quarter. When prices fall, developers’ profits shrink and they retreat from the market. And when developers stop building, promises to stop future buyers being locked out of the market by building 300,000 new homes a year aren’t worth the manifestos they were written on.

What was striking about the former cabinet minister Oliver Letwin’s recent report on land banking – the much-hyped practice of developers buying up land and sitting on it while it rises in value – was that he found precious little evidence of it happening. What he did find was developers building on their sites painfully slowly, over the course of several years, because they won’t do anything that causes neighbourhood property prices to fall. A glut of for-sale boards going up all at once means buyers can take their pick and haggle hard over prices. This may be exactly what first-time buyers need but it’s what developers are primed to avoid.

The problem with relying on the market to provide is that the market works to ration the one thing voters hope mass housebuilding programmes will deliver. And that’s in good times; imagine what happens when everyone is scrabbling frantically to protect their investment in a downturn. …”

https://www.theguardian.com/commentisfree/2018/nov/30/if-house-price-crash-sounds-like-good-news-think-again

“‘£65,000 prefab homes go into production” [but buyers will pay at least £200,000]

So, reading the article, they will REALLY cost buyers about £200,000 minimum each – but with less need for skilled trades developers will make more profit! Neat!

“The UK is entering a new era of prefab homes with the opening of a Yorkshire factory that will build fully-fitted three-bedroom homes with a price tag as low as £65,000.

Eight houses fitted with kitchens and bathrooms will roll off the production line every day in Knaresborough, to be loaded on to lorries for delivery across the country. Experts have hailed it a revolution in British housebuilding that would slash the 40 weeks it could take to build a traditional home to just 10 days.

The factory cost of a two or three-bedroom home would be from £65,000 to £79,000, although that excludes the cost of land, on-site assembly and connecting the home to services, which could double or triple the final price.

The plant, operated by the UK company Ilke Homes, said it would produce 2,000 houses a year, rising eventually to 5,000, which would catapult it into the top echelon of volume housebuilders in the country.

Meanwhile, the insurance company Legal & General has built a vast factory outside Leeds which it said would build 3,500 homes a year, with the first two and three-bedroom homes being delivered in the past few weeks. It said it intended to build similar factories in locations across the UK, which would turn L&G into a bigger builder than Persimmon or Barratt Developments.

The term prefab has been shunned by the new housebuilders. The new buzz phrase, with its connotation of low-quality, postwar emergency housing,has instead been described as “modular construction”. Developers have been promising homes built to higher standards than those using traditional methods. They also claim energy bills would be half that of a conventional home due to better insulation.

The housing secretary, James Brokenshire, speaking at the opening of the Knaresborough site on Thursday, said the factory would help the government reach an annual target of 300,000 new homes in England. Last year nearly 220,000 homes were built in England. “This is about challenging the ways we have done things in the past. We want to see 300,000 homes being delivered by the mid-2020s, so we need to scale up and build more, better and faster. And that is precisely what this facility is about,” he said. …”

https://www.theguardian.com/society/2018/nov/30/uk-housebuilding-revolution-65000-prefab-homes-go-into-production

“Tory-run Northamptonshire county council bailed out by government”

Owl says: just as well it is a Tory council that’s allowed to break the rules!

“Permission granted to spend £60m cash received from sale of HQ.

The government has in effect bailed out Tory-run Northamptonshire county council after giving it unprecedented permission to spend up to £60m of cash received from the sale of its HQ on funding day-to-day services.

The highly unusual move – accounting rules normally prevent councils using capital receipts in this way – means the crisis-hit authority is likely to escape falling into insolvency for the third time in less than a year.

Ministers gave the go-ahead for the bailout after commissioners sent in to run the council issued a stark warning that without a cash injection, Northamptonshire would be unable to meet its legal duties to run core services such as social care.

Opposition councillors called it a political move to save ministers from having to directly bail out the council. Labour group leader Mick Scrimshaw said: “It is clearly politics. The Conservative government did not want the political embarrassment and for that reason they have been allowed to use these capital receipts.”

Northamptonshire declared itself effectively bankrupt in February after it realised it could not balance its books. It declared insolvency again in July after a review revealed it had understated the extent of its financial problems. It must make good a £70m deficit by the end of March to avoid insolvency for a third time.

Although the council has already set in train a draconian cuts programme for the current financial year to try and overturn the £70m budget shortfall, the commissioners said this alone would not be enough to prevent insolvency.

In a report to the communities secretary, James Brokenshire, the commissioners Brian Roberts and Tony McArdle said the “extraordinary” scale of cuts to services needed in one year to fill the funding gap would breach councils’ legal obligations.

The report said: “Considered against the concomitant need to maintain the integrity of critical public service delivery, it is a challenge that is beyond being met in a single year. We are compelled to the view that the finding of an alternative mechanism for addressing this legacy will be unavoidable.”

The report notes that the council has been dysfunctional and that morale is poor among “long suffering” staff. It also criticises its “lack of credible leadership and direction over many years”, though it notes there have been some improvements in culture and management over the past few months.

The council’s leader, Matt Golby, said: “I am delighted the commissioners have been successful in their request for a capital dispensation. This will enable us to use our own resources to tackle the £35m deficit from 2017-18 and replenish our reserves to put us on a sustainable financial position.” The council is hoping to save a further a £35m this year from its cuts programme.

Rob Whiteman, the chief executive of the Chartered Institute of Public Finance and Accountancy, said the move was effectively a bail out for Northamptonshire. Although it went against accepted accountancy rules and practice, it could be justified on the grounds that the council was being abolished.

Northamptonshire is to be replaced by two unitary authorities under plans approved by ministers earlier this year after the inspectors’ report concluded that the council’s management and financial problems were so deep-rooted it could not be easily turned around.

Enabling the council to convert some of the £60m it received from the fire sale of its new state-of-the-art HQ earlier this year – just months after it moved in – will allow it to clear an underlying £35m revenue deficit, and removes the need for ministers to pump money into the council directly.

Ironically, a highly critical inspectors’ report in March was scathing of the council’s preparedness to compromise generally accepted accounting principles to present the councils’ finances in a better light. Earlier this month a task force was sent into oversee its failing child protection services.

Brokenshire said: “Clearly, the situation in Northamptonshire is very serious. I am grateful to the commissioners for uncovering the council’s true financial position and the robust steps they have taken to improve its financial management and governance.”

https://www.theguardian.com/society/2018/nov/29/tory-run-northamptonshire-county-council-bailed-out-by-government