Memorandum submitted by the Leader of Wandsworth Borough Council (P 6)
Thank you for the invitation to submit Wandsworth Council's views to the Committee. We are delighted to have the opportunity to do so.
I am enclosing with this letter a fairly detailed submission reflecting work that has been done by our Economic Development Officer and our Borough Planner on the Market. The Council has a very firm policy, stretching back now over almost 10 years, of seeking to retain the Market at its present location, and pressing for the removal of the blight over its longer-term security via allowing it to diversify into market-related activities, principally focussed on food preparation and other supporting services for the central London catering and hotel industry. We strongly believe that development in this direction would capitalise on the strengths of the Market's location and its excellent transport infrastructure and links, its current spare capacity and its reputation. I have had a number of discussions with successive Secretaries of State to discuss these general proposals and the Council would welcome any opportunity to assist in developments of this nature.
I should also take the opportunity to make clear that Wandsworth Council would resist most strongly any plans to move and redevelop the Market and any loss of employment opportunities on site. Our Unitary Development Plan continues to identify the site as a commercial market and we firmly consider that there are no circumstances presently foreseeable that would lead us to change this view.
We hope these observations and our evidence is of interest and we look forward to reading the results of your inquiry in due course.
Should you require any further information from us or wish us to conduct any further studies along the lines of the cost-benefit appraisal mentioned in our evidence, we would be very pleased to do so.
NEW COVENT GARDEN MARKET
1. The New Covent Garden Market (NCGM) is a 23 hectare site. About 280 tenants are located in the Market and employ about 2,500 people directly in a variety of fruit, vegetable and flower trading activities. Freehold of the Market is owned by the Covent Garden Market Authority (CGMA). Its activities are governed by an Act of Parliament. The Market is one of the largest and most important in London. With a turnover of £480 million per annum, NCGM is larger than Billingsgate, Smithfield and Borough. The Market has traditionally been a source of local jobs, and provides one of the main opportunities in the Borough for large-scale employment floorspace development in a location that is relatively well served by public transport. There has been a gradual decline in the Market's traditional wholesale trade due to changes in the operation of the wholesale fruit and vegetable market, as supermarkets have increasingly used their own direct supply and distribution networks. Use of the market at present could be described as low density indicating scope for physical intensification. However, it has developed as a major food and drink supplier to the growing tourist leisure and hospitality businesses of Central London, West End and the rest of London.
2. The site lies in the heart of East Battersea (the wards of Queenstown, Latchmere and St John), which has one of the larges concentrations of employment in the Borough. The Market is at the centre of a cluster of other food and drink businesses in the area. It is located close to the River Thames and the major development sites of Battersea Power Station and Battersea Wharf where development is imminent. The derelict Battersea Power Station will become a working, living and leisure environment for the twenty-first century when preliminary works start on site this year. It will result in the creation of over 6,000 new jobs. Regionally it will extend the corridor of regeneration along the South Bank from Bankside to Battersea. The development is a major opportunity to get to grips with issues of deprivation in partnership with other local businesses and the community including the Covent Garden Market Authority.
3. Battersea is an area of high social and economic deprivation. It is recognised as such in the Government Office for London's Single Regeneration Budget Guidelines as an area of deprivation. Twenty per cent of Wandsworth residents who receive Housing Benefit and Income Support live in the target area, almost half of this number live in Latchmere Ward, where one in ten households are headed by lone parents, almost twice the national average. Unemployment is high. The three wards of Latchmere, Queenstown and St John have unemployment rates of 6.9 (the joint highest in the Borough), 5.3 and 5.3 per cent respectively. Latchmere's male unemployment rate of 10.4 per cent is the highest in the Borough and is more than double the national average. Figure 1 below compares unemployment to other parts of the Borough, Inner London, Greater London and Great Britain. Unemployment in the area is greater than that for London and Great Britain.
Note: Figures are averages of January, April, July and October 2000. Only wards with above Borough average unemployment rate are shown.
4. Although Wandsworth's economy has out-performed Greater London's in a number of respects, including employment, the Borough still retains some of the features of a typical inner city Borough with considerable deprivation, social exclusion and pockets of high unemployment of which the East Battersea area is one.
5. New Covent Garden Market represents a major contributor to the local economy. It has the potential to be an even bigger contributor to the local and London economy. Any proposals to relocate or reduce the scale of the Market would have a major negative impact on this already deprived community.
THE COUNCIL'S POLICIES
6. Over many years the Council, in association with various partners (including the New Covent Garden Market Authority), has developed a series of policies and initiatives to help regenerate the area. These are listed below.
7. The Council's Unitary Development Plan promotes and supports regeneration opportunities in the East Battersea Development Area, in partnership with local community and business interests (policy RDP11). Within East Battersea, the plan promotes mixed development on the Nine Elms Riverside, with uses complementary to and supporting central London activities particularly appropriate (policy R24). In the Nine Elms Industrial Employment Area, which includes the New Covent Garden Market, the Plan seeks development for business, industry and/or warehousing, and in particular promotes business and service industries associated with central London activities (policies BIN1-2). These policies are in line with Government planning guidance for London which identifies Nine Elms as part of the central London margins, and the area of the Market as part of a preferred industrial location.
8. The Council is leading a successful Single Regeneration Budget Programme to complement the Battersea Power Station development and regenerate East Battersea in terms of education, employment and training up to 2004-05. The programme will cost approximately £5 million. A copy of the approved SRB funded programme for the area is attached [not printed]. The Programme has two main themes:
(a) to invest in skills and create new pathways to employment; and
(b) to invest in young people, education and learning.
9. The objectives of the scheme and its projects are designed to promote a continuum of progress through education; learning projects designed to contribute to raising aspirations, participation in higher and further education and pathways to employment. A better educated cohort of young people and a skilled local workforce will contribute directly to improving economic growth and alleviating the effects of deprivation.
Economic Development Programme 2001-02
10. The Economic Development Programme for 2001-02 includes policies, priorities and actions for East Battersea. Relevant extracts include:
ObjectiveTo bring forward development opportunities in East Battersea, and ensure local people and businesses benefit form the jobs and business opportunities created.
11. Recent Developments:
(a) Detailed planning permission granted for the Battersea Power Station development;
(b) Parkview International Plc and the Council signed a Local Employment Agreement;
(c) Clearing House Board established with Parkview;
(d) Loans and grants offered to improve seven premises in East Battersea;
(e) SRB programme for East Battersea meets its delivery plan target;
(f) Partnership board operating successfully;
(g) Detailed labour market study carried out;
(h) New Employment Support for young ex-offenders started delivered by Search;
(i) Tomorrow People's Trust appointed to deliver the Employment Support and Job Placement contract;
(j) All education-related SRB projects started and running successfully;
(k) Education Achievement Zone and Surestart bids approved for East Battersea;
(l) Supported Patmore Co-operative's bid to secure New Opportunities Funds for an ICT centre on the Patmore estate SW8 (Queenstown).
12. Work planned for 2001-02:
(a) continue to work closely with landowners, developers and contractors of the Battersea Power Station site, to bring forward this development of international significance and ensure local residents and business benefit;
(b) develop a construction project to assist local contractors and local people wanting to work in construction;
(c) finalise details of the Clearing House arrangements with Parkview to enable local residents are given priority for new jobs to be created by Power Station site development's appointed contractors;
(d) review SRB Programme and priorities in the light of the revised timetable for the Power Station site development;
(e) enter into a further local employment agreement associated with major new developments in the area;
(f) prepare enhanced strategy of promoting and communicating the SRB Programme into the local community;
(g) support bids by community groups in the area to attract external funding to expand ICT learning, workspace and other community facilities in the area;
(h) prepare and implement proposals to address the Labour Market Study's recommendations;
(i) support plans to improve utilisation of and investment in New Covent Garden Market, SW8 (Queenstown) to generate employment;
(j) contribute to Lambeth's "URBAN" proposals which include parts of the Patmore Estate;
(k) extend the TCIS to Battersea High Street and Falcon Road as part of a concerted package to upgrade these areas.
Item (i) above has been included in successive approved Economic Development Programmes.
13. The Council has operated a Business Development Scheme which offers interest-free loans to non-retail organisations. Two businesses assisted included:
(a) The Ice Box. The company was formed in 1993 to provide an ice cube delivery service in Central London supplying event caterers, restaurants, bars and nightclubs. In 1994, they branched out into ice sculpture. The Council offered the company an interest free loan of £10,000 under the Business Development Scheme (BDS) to expand and take space at the Market in 2000. With business increasing, staffing numbers are expected to rise.
(b) The Huge Cheese Company. This company distributes cheese, dairy and speciality products. The company has taken up six units in the Market. The Council offered the company an interest-free loan of £15,000 under the BDS towards the installation and fitting out of the mezzanine floor. The company has successfully completed the conversion of the premises, which are very impressive. They are reaping the benefits of improved efficiency and reduced costs.
14. The Council supports the continuation of the Market at Nine Elms together with improved utilisation of and investment in this major site in order to generate further employment opportunities for appropriate business uses associated in particular with Central London activities. This potential has long been realised by both the Market Authority and the Council but achieving this vision has been stymied by, amongst other things, lack of Government (of both major parties) positive action in support of this long term vision.
15. The key constraint is uncertainty over the long term future of the Market. The Conservative Government proposed to privatise the Market but took no action. In order for the Market to prosper, there needs to be long-term certainty for the NCGMA and the tenants. The threat of privatisation effectively blighted any long term planning and major investment by both the Market Authority and their tenants. It also stopped any new businesses moving into the Market since they could not be offered long leases.
16. The Council and Market Authority have separately voiced their concerns over this state of affairs to successive Governments. Matters are somewhat clearer now. The previous Government announced that it would consider approving longer leases to businesses and would consider approving a wider range of tenancies to other food related businesses.
17. The current Government has said that if the Market is sold in the future then it would be sold as a "going concern" thereby reducing the threat of disposal for redevelopment and the Market having to relocate elsewhere.
18. Recent Government actions have reduced much of the short-term uncertainties and is more flexible about acceptable business activities on the Market. However, the long term future of the Market is dependent on greater certainty. There is still the possibility of disposing of the site in the long term. Wandsworth Borough Council is concerned to see this uncertainty lifted.
19. The worst case scenario is its disposal by the government to realise a capital receipt and its new owners redeveloping the site resulting in the relocation of the Market from its present location at Nine Elms, SW8. The site is potentially attractive for redevelopment due to the value of land and properly in this part of London, the scale of possible development and its proximity to major redevelopment proposals underway at Vauxhall and approved for the Battersea Power Station. The potential of this area for redevelopment is reflected in the recent press announcement of a major redevelopment of the adjacent Sainsbury's for residential and hotel uses. The Council's planning policies would not allow such a development if a similar application was received for some or all of the Market.
20. It is not clear where a relocation of the Market might be made, but any new site would almost certainly have to be on the outskirts of London, in close proximity to the M25. One possibility might be Western International market, in Hounslow, but it is understood that plans under consideration would restrict the capacity of this Market. Moreover, relocating to the outskirts of London would significantly increase the costs of many of the Market's tenants since the greater proportion of the Market's business is within central London. Relocating the Market could result in the loss of the existing tenants and a possible knock-on effect to the major hospitality business of Central London, West End and elsewhere in London. Many of the existing tenants would have to move or close.
21. The Council has long been aware of the threat to the Market and has taken various actions to support the continuation of a successful modern Market. It included proposals in its failed City Challenge Bid in 1991 for East Battersea to develop the Market. Subsequently, in April 1993 the Council and CGMA funded a study to investigate the possibility of the Market being developed as a Food Processing Centre. A coy of this study by KPMG can be made available. The Leader of the Council and the Chief Executive have respectively written to various Ministers of State and senior civil servants seeking to clear the uncertainty over the Market's future. In 1998, immediately before the announcement by the current Minister (Nick Brown) that if the Market is sold it would be on the basis of a, "going concern", the Council was reluctantly about to commission a study. The study would advise the Council on the potential positive and negative impact of the hypothetical relocation of NCGM on the regeneration of East Battersea and Vauxhall. The study was abandoned following the Minister's announcement as this lifted many of the short term uncertainties.
THE MARKET'S POTENTIAL
22. The market has the potential to expand as a major "food park" serving the growing central London catering and hospitality trade. It is a unique asset to London and capable of being exploited to advantage because of its locational attractions and available land and premises. The market could, for example, increasingly focus on enterprises involved in all forms of food and drink manufacture, preparation, distribution and catering services as well as other specialist business support activities. Future clients could be the hotels and various caterers that make up the Battersea Power Station development
23. Full commitment by the government to the long term future of the Market, allowing the CGMA the freedom to operate more flexibility and attract new long term investment either in their own account or in partnership with private sector partners; or
24. Full privatisation by inviting bids from interested investors wishing to own, manage and develop a market and associated employment generating uses consistent with the UDP (the Market is zoned as an industrial employment area).
12 January 2001