As the London Borough of Newham gears up to host the 2012 Olympic Games it is also intent on transforming itself into one of the key drivers of the UK’s economic recovery. Antony Oliver finds out what all the fuss is about.
London Mayor Boris Johnson last month trumpeted a £30M investment by technology firm Siemens to construct a new high-tech headquarters in Newham, east London.
The building, in the once derelict Royal Docks area was, he said, the “flagship” for the capital’s new Green Enterprise District which he hopes will stretch across East London.
It will, he added, attract new investment in low carbon technologies, create up to 6000 new jobs and position London as a global leader of the low carbon economy.
It is no accident that Newham finds itself at the heart of this low carbon revolution. The £9bn being spent on the Olympic Park is just one of the many potential regeneration sites across the borough with the potential to lever in over £20bn of private sector investment.
The latest Mayoral fanfare is the result of a major and very well thought out strategy by the borough to use the momentum provided by the Games to create new jobs, wealth and optimism in a deprived part of the capital.
At the heart of the challenge is Joe Duckworth, chief executive of Newham Borough Council and a real force for change. Even as the fi rst wave of Treasury cuts start to bite local government budgets, he remains totally committed to the investment needed to fulfil the potential of Newham as key to the capital’s future.
“There is a huge commitment to socio-economic change in this part of East London,” he says. He points out that, alongside the 2012 Olympic Park, Newham currently has developments 10 times the size of the hugely successful Canary Wharf area.
“We do see ourselves as strategically very important for London,” he adds. “The Olympics is primarily an accelerant for what was going to happen anyway. What was going to take five to 10 years now has the opportunity to be done in two to five years.”
Clearly this is a massive undertaking and to assist, Duckworth has assembled a strong planning and engineering team. It is led by former Birmingham City Council director of regeneration Clive Dutton, the man responsible for Birmingham’s hugely successful regeneration over the last five years.
Since arriving last July, the team has been revamping the borough’s development plan and has focused on key issues such as how developments like the Olympic Park, Stratford City, the Lower Lea Valley, Canning Town, Custom House and the Royal Docks actually fit together.
With potentially billions of pounds of investment at stake, the key is to define what the plan is trying to achieve.
Duckworth is clear that he is not interested in turning Newham into another Canary Wharf-style business development where only around 6,000 of 110,000 workers actually live in the area. That, he says, is not a recipe for sustained development.
“This is about doing something much more radical about the link between business, schools and education,” he says.
“In terms of economic development we want to attract high added value, high skill jobs here. But we want to create a more balanced sustainable community. We generate a middle class every year and it is about keeping them here.”
Right now he says that in some of Newham’s wards the population churn is over 30% each year − a figure that prevents communities from forming and becoming established.
Because while Newham may be London’s number one regeneration priority and at the heart of the massive, nationally significant Thames Gateway development project, right now it has some of the UK’s most deprived neighbourhoods and residents.
Unemployment is high, the population is very young and also culturally diverse. The birth rate has doubled since 2006 so that 41% are now under 25 years old and over 100 languages are spoken.
Without the right investment, Duckworth fears that people will continue to see the area as somewhere they pass through, rather than stay, and build a life.
“There have been false dawns here in this part of East London,” explains Dutton referring to the huge plans for investment that never really materialised over the last decade across the Thames Gateway region.
“We are adamant that we will have a much more sophisticated approach. Quality will be the watch word. We want the best developments and the best companies here.”
He points to firms such as Westfield, leading the development at Stratford City, Excel which has created a world class exhibition centre and the City Airport as “trailblazers” and the kind of investment partners that he wants to encourage.
“It isn’t just about saying yes to the back offices of Canary Wharf − although some of that would be gratefully received − and it isn’t just saying yes to government department relocations,” he says highlighting the fact that his team is deliberately taking its time now to get the plan and message to developers right.
“It’s about being straight with people from the start,” he adds. “What’s important is that the next baby steps (of the planning and development) set the tone and the tenor and raise the bar for what will follow.”
Of course the recession has also naturally slowed progress and allowed the priority developments to be focused on three areas for clarity − Metropolitan Stratford, Canning Town and the Royal Docks.
Duckworth agrees that forming quality partnerships in these development areas is critical to the success of the plan. “The recession has given us a pause to assess what we are doing particularly on the quality issue,” he explains.
“We don’t want loads of sheds built. We have had some offers like that and we’ve said no. “If you are coming here we expect us to be friends and neighbours for many years and you need to be a friend and neighbour to the community.”
For both Duckworth and Dutton, the key to the success of the whole regeneration of Newham starts with the infrastructure. While there is work to do to close the current power demand gap, transport links are certainly very well established.
In fact with a clutch of London Underground lines, Docklands Light Railway, overground commuter and international trains, plus significant new interchange hubs at Stratford and Canning Town and the rapidly expanding City Airport, Newham is one of the best connected parts of the UK.
Being just seven minutes by train from central London and minutes from flights to Europe and beyond makes the area hugely attractive to businesses. Many, like Siemens, will soon be moving as London expands eastwards.
But alongside the creation of jobs, housing is also a critical issue and Newham plans to build 55,000 new homes in the next 10 years.
However, Duckworth intends to work closely with property developers to ensure first that the right properties are built and then that they are properly rented and managed.
“We are not against the private rented sector − we just want a well managed private sector,” he explains. “We will be working with property developers to agree proportions of buy to let. While developers come and go we are here all the time. We have to make communities cohesive and standing on their own two feet.”
Of course all this realising of potential will require significant public sector investment to prime the path for the private sector to follow and the Newham team is acutely aware that public sector finances are going to go into a period of severe restraint.
Duckworth highlights that he is planning for a 20% reduction in funding and is expecting 50% cuts in overall government capital expenditure but underlines that switching off investment in an area such as Newham would be a false economy.
“Its about spending to save. The more that you spend here in the short term − especially with the Olympics here − the more that you can save the public purse by getting people in to work and off benefits,” he says. “And with a cohesive community your policing and healthcare costs also go down. It’s a no brainer.”