Economic development doesn’t just mean property (part 1)

By - Friday 31st January, 2014

In the first of a three part series, Sean Creighton assesses the success Croydon could achieve by taking new approaches to develop its economy

Image taken by Peter G Trimming and used under Creative Commons license.

After leading a history walk in early January at the heart of the property-development-feeding-frenzy in Vauxhall and Nine Elms, I read an article in the Evening Standard on the property business by Anthony Hilton, which reminds us of the fragility of the property development industry and its economic dangers. Then it was on to the Croydon Consortium meeting at which I drew attention to the article after someone had raised concern about the potential impact of the Westfield and Hammerson development. The commitment of both major political parties to the £1billion investment in the redevelopment of the Whitgift and Centrale shopping centres shows how they are both locked into seeing the private sector development industry as the way forward, blind to the warnings of Hilton.

There are grave doubts about whether the scheme will produce well paid jobs for local people, safeguard existing businesses operating in the centres, stimulate economic development elsewhere in the borough and help recycle money around the rest of the local economy as opposed to leeching it off elsewhere.

South Croydon Community Association (SCCA) understands from Westfield that there are no plans to train staff to develop online retail skills. SCCA wants really profitable shops in its area to have a strong online presence. Neither Hammerson or Westfield seem to be offering to make a contribution to a more cohesive borough. So it looks as if the proposed redevelopment is just another example of narrow thinking that will not help build a resilient local economy that can weather future economic challenges, such as the collapse and withdrawal of firms such as Allders and Nestlé. The redevelopment of Centrale shows how unsustainable developers schemes can be given that it was only completed in 2004.

The proposed redevelopment is just another example of narrow thinking that will not help build a resilient local economy

Whitgift’s previous partnership also proved unsustainable. In 2005 using £225million from the Anglo Irish Bank, investors bought 75% of the leasehold of the Whitgift Centre from the Foundation, which retained 25%. The investment was controlled by Howard Holdings plc (HH) which went into administration in 2010. The administrator of HH may well benefit because it is likely from Westfield’s purchase of 50% of Centrale from Hammerson is helping to fund the 25% purchase by Hammerson of the lease of the Whitgift Centre. The administrator is no doubt hoping to make a profit on HH’s other Croydon developments: Altitude 25, the Exchange and the Bridge.

So basing economic development on property development speculation is a risky business. It appears that we require new ways of thinking about Croydon’s economic development by the private sector, the council, the rest of the public sector and the NHS, and the community and voluntary sector. Some of this rethinking could well be based on the work of the Centre for Local Economic Strategies (CLES) done over the last three years.

CLES points out that “Local economies aren’t simply an isolated silo of private sector activity that can be encouraged and shaped. They are made up of a network of social, public and commercial economic activity. These aspects are interconnected and dependent on one another.”

CLES believes “elements within a system are in constant flux, unpredictable and highly complex. Many changes and events occur at very different timeframes and speeds. Traffic jams occur over minutes, stock markets crash over days and weeks, housing markets change over months and years, whilst urban regeneration can take decades. All of this means that the application of resilience is a challenge to a mechanical and linear approach to place making and shaping. Places need to be understood as an interconnected system; the policy application of resilience is a search for qualities and attributes of place which make it adaptable and able to thrive on change.”

We require new ways of thinking about Croydon’s economic development by the private sector

CLES’s work enables us to ask a few questions about Croydon, like how well has it been able to respond effectively to change and opportunities, whether they be economic, social, political or environmental? How well has it been able to withstand economic blows? And how good is it at learning from more successful action elsewhere?

The council’s Scrutiny and Overview Committee is supposed to be be holding a meeting to examine the details of the Westfield and Hammerson scheme. As well as undertaking resilience analysis, it should take into account issues identified by New Economics Foundation (NEF) about the requirements of the government’s National Planning Framework announced in early 2012. It instructs planning authorities to “recognise town centres as the heart of their communities and pursue policies to support their viability and vitality”. Town centres will have to demonstrate their ‘individuality’ and a ‘diverse’ retail offer. Markets have to be enhanced and, where they can be, re-introduced.

Bigger developments will require ‘impact assessments’ to see how they would affect “town centre vitality and viability” – not just now but five years ahead. NEF suggests that “in the right hands, an imaginative and far-sighted local council, this is a huge tilt of the balance of power away from the big retailers.” The Scrutiny and Oversight Committee will need to ensure that there are proper impact assessments as required under the Framework.

I’d also like it to usefully explore other questions such as what will happen to existing businesses when the property they rent is demolished – will they be offered temporary re-location at reduced rent? Will they be able to move back into new properties if rents are substantially higher? Will rental costs increase? Does Croydon really need more office space? How many jobs could be lost through redevelopment? How many new jobs will be in retails rather than construction? And what is the average wage of retail workers and how many retail workers have to claim benefits to have a living income?

In the second part of this article exploring alternative economic development I will look at the CLES’s ideas on Croydon’s local economy.

Sean Creighton

Sean Creighton

A former employee of and freelance project worker with community and voluntary organisations, Sean is active with Croydon Assembly and with the Planning and Transport Committee of the Love Norbury group of residents associations. He is Chair of the Norbury Community Land Trust. He is a historian of Croydon and South-West London, British black society, social action and the labour movement. He coordinates the Samuel Coleridge-Taylor and Croydon Radical History networks. He runs blog sites covering Croydon, Norbury and history events, issues and news. He runs a small scale publishing imprint called History & Social Action Publications. He gives talks on a range of history topics and leads history walks.

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