Change of control in City of Westminster transforms public affairs landscape for developers

By Murad Qureshi, Associate Director, Cogitamus Limited

After a hard day knocking the doors of residents in Little Venice Ward on polling day and making my way to the count to see the results of the local elections in City of Westminster at just after midnight, I immediately encountered three Conservative councillors of Hyde Park Ward storming out of the hall.  When I asked what that was all about, I discovered the trio had just been informed they would lose their seats. Only then did I realised the scale of the defeat the incumbent leaders of the City of Westminster were going to face during the night at Labour’s hands. 

The heartland of Labour support in the City of Westminster is Paddington in the north west – where the party had been expected to make gains in Bayswater ward – and efforts had been made in Lancaster Gate and Little Venice wards.  In the event, Labour managed to win an additional five councillors from those three wards.  But no one had expected Hyde Park ward to change hands – including the Labour candidates. 

Postal votes were clearly influenced by the ‘Partygate’ issue as they had become available in voters’ homes at the same time as the scandal was at its height.  It was noticeable at the count when the postal votes were opened how many were Labour votes from areas where this was not usually the case. 

Hearts and minds in the West End ward were probably won by Labour even before polling day when in the previous week the Soho Society and ex-Conservative councillors came out to support the Labour candidates. This was clearly a sign of things to come. 

In the South Labour managed to gain two seats, one in South Pimlico that should never have been lost last time and, remarkably, gaining one in Vincent Square ward to the credit of the candidate.  Who knows whether, next time, St James’s ward – where Buckingham Palace can be found – could gain Labour councillors?

So, all in all, the substantial swing to Labour in the City of Westminster secured them 31 seats, winning their holy grail of victory and making it possible for them to say that the Prime Minister of the day is the first to live under a Labour council at 10 Downing Street.  

The City of Westminster is a major location for developers’ activities, probably second only to the City of London for office schemes and the first for major residential projects in the country.  Yet l am not sure the major developers operating in Westminster ever foresaw this sudden change of guard at City Hall along Victoria Street SW1.  Maybe it could have been envisaged over a number of local election cycles but never in one swift move. 

So it was not surprising to hear that the Westminster Property Association (WPA) – representing all the major developers and estates in the City – was the first one  to write to the new Leader of the Council. 

The Westminster Labour Group whilst in opposition had of course made it quite clear that things were going to change in the event of them taking power, particularly in response to one of the previous chairs of Planning having found fame for attending numerous lunches and dinners covering 500 declared hospitality dates and gifts over a 3 year period, many from property developers.

Such levels of schmoozing were considered unacceptable many years before Labour’s eventual electoral victory in May 2022, and new ways of working are already being instituted by Westminster’s Labour Cabinet.  Developers will, therefore, have to learn new and more transparent means of engaging with the Council and responding to the requirements of the Labour Group’s manifesto.

To be on side with residents, the Labour manifesto made clear the need to put their needs before those of developers in the planning system,ending the cosy ‘business as usual’ relationship with the sector to build the homes needed to make housing fairer in the City.  Thus, making building new council (social) and lower rent homes is the Council’s top policy priority, with all regeneration having to be supported by the local residents it aims to help and seeking to access more funding from the Mayor of London and central government to supplement the Council’s own financial resources.

The new ruling Labour Group is committed to introducing an urgent Affordable Housing Supplementary Planning Document (SPD) ahead of the launch of a new City Plan to reform Westminster’s policies towards building the homes needed, taking action towards meeting the Mayor’s long-term strategic 50% affordable housing target.  It will include the key commitments listed below:

  • Raise the proportion of affordable housing Westminster delivers from private developments using best practice from across London – this will include closely watching whether Islington’s ambitious housing commitments in their draft local plan are able to be approved by the Government’s planning inspectors;
  • Introduce innovative methods of delivering more green and affordable housing, such as affordable housing and sustainability bonds;
  • Create a requirement for a ‘small sites’ affordable contribution modelled on policies in place in Islington that make high value developments under 10 units in size provide a contribution to affordable housing in Westminster;
  • Restore the requirement for at least 60% of affordable housing built in Westminster to be for social rent (reversing the Conservative decision to make 60% intermediate) and introduce an expectation that, on public land, the proportion of affordable housing will be split 70% social rent and 30% intermediate rent (subject to the reforms to intermediate rent set out below) to help reduce the horrendous waiting lists families face for secure housing in Westminster;
  • Ensure that rent levels on any new intermediate housing provided on public land in Westminster are at or below the London Living Rent (LLR);
  • Labour will also require intermediate rent levels on private land in Westminster to comply with the London Plan maximum required household income of £60,000 per year, unlike the current policies which encourage homes only affordable to those on incomes of up to £79,000 per year (and have allowed up to £90,000 per year in the past); and
  • Create a new type of ‘Westminster Key Worker Homes’, built on Council-owned land, to refocus the Council’s intermediate housing offer towards the City’s long-term residents and essential workers and ensure that these Westminster Key Worker Homes are affordable for those on average (median) incomes or less.

We will see similar changes critically on the environmental front, with demolition no longer being the first or only option for regeneration schemes.  Reuse and retrofit options will always be fully considered using the retrofit test set out in Labour’s 2021 Green New Deal paper.  The new Westminster Council leadership is adopting the policies this article sets out to increase energy efficiency and meet Net Zero on major developments, finally implementing the findings of the Mayor of London’s upcoming guidance on whole-life-cycle carbon assessments.

All of these changes are being highlighted with the Marks & Spencer proposal to develop its flagship site on Oxford Street.  Here, the Labour Group will welcome the public inquiry into the owner’s plans for the site just announced by the Secretary of State as earlier campaigned for by celebrities like Griff Rhys Jones who called for M&S to rethink its plans back in the November planning meeting dealing with the application.  There is a quite clear direction of travel towards renovating old buildings rather than demolishing them.  

Clearly, this all beckons a new dawn for developers who want to continue investing in the City of Westminster as the electorate have demonstrably shown their preferences locally in the heart of Greater London.  With the demographic changes in the City of Westminster now being reflected politically, this is likely to become the norm for the future.

If your business is affected by this new policy direction for the City of Westminster or, indeed, any of the other local authorities which changed their political control in May 2022, get in touch with us at Cogitamus Limited to talk about how we may be able to help.