Leading through crisis: Facing the future head on

On 20 July Future of London convened a Chatham House roundtable of senior leaders from across London’s built environment to discuss the challenges and opportunities facing the capital over the next 10 to 30 years, and the role of leadership in ensuring that London remains globally competitive.

Leading through crisis

The pandemic and the current conflict in Europe has thrown a spotlight on leadership. The ability to make the right decisions, and instil confidence and connection with both the public and partners is under intense scrutiny – at a time when leaders across the built environment sector are facing unprecedented challenges.

These include Covid-recovery, the fallout from Brexit, the affordable housing crisis, the climate crisis and, most recently, the cost-of-living crisis.

To discuss the impact of these on London, and reflect on the leadership skills and approaches needed to tackle them, Future of London’s Chief Executive, Nicola Mathers, was joined by:

  • Simon Carter, Chief Executive, British Land
  • Pat Hayes, Managing Director, Be First
  • Kate Ives, Strategic Growth Director, Countryside Partnerships
  • Alice Lester MBE, Director for Regeneration, Growth and Employment, LB Brent
  • Jon Milburn, Group Development Director, The Guinness Partnership
  • Rob Perrins, Managing Director, Berkeley Group
  • Joanna Rowelle, Director, Arup
  • Bek Seeley, European Managing Director for Development, Lendlease
  • David Sleath OBE, Chief Executive, Segro
  • Sarah Thomas, Chief Operating Officer, Peabody
Future of leadership - View of London at night.
Image courtesy of Khris Morgan.

London: a global city

Joanna Rowelle kicked off the session with her insight into the issues that cities across the world are facing, including health inequalities, ensuring a more equitable distribution of wealth, migration, digital and data, mobility and active travel. “Globally, every issue we’re tackling in London is being tackled elsewhere too. City leaders want to talk to each other, as well as to their own national governments,” she added.

She also stressed the importance of social value, and the need to shift towards measuring outcomes rather than outputs (a point also made in Future of London’s recent Spotlight on rethinking social value). We need to be smarter about how we deliver against social and planetary issues. She expressed concern about the rhetoric decoupling social value from tackling climate change.

Joanna’s final point was that the retrofit and sustainability agendas will be more effective if led by leaders at city-level, through public-private partnerships. But city governments will need more power to deliver and hit their emissions targets, and the private sector will need more financial incentives, probably in the form of blended finance.

Crisis: the mother of invention

The fact that London is already experiencing the impacts of climate change was brought home to attendees by the absence of Cllr Darren Rodwell, Leader of Barking and Dagenham Council. The record-breaking temperatures the day before our roundtable had resulted in a serious fire in the borough and he was overseeing the response.

Pat Hayes joined us and explained how LB Barking and Dagenham tackled the crisis of deindustrialisation, which saw industry and jobs disappear from the area. Conventional housebuilders and developers weren’t interested in investing and the politics of the borough shifted to the extreme right.

Future of leadership - New housing block with trees in front of it.
New housing in LB Barking and Dagenham. Source: FoL.

The council, along with their development and regeneration company, Be First, backed a large-scale ‘state intervention’ that has brought the film industry to the borough and seen the construction of 500 homes a year. They’ve done this with £1 billion of public borrowing – and Pat acknowledged that the low land values in the area made this easier.

This confident, public-sector intervention corrected market failure and made the borough more attractive for private-sector investors. But whether LB Barking and Dagenham and Be First can continue this success story is less sure, as a result of rising construction costs.

Pat outlined several of the other crises that London, and the built environment sector in particular, are facing – including high inflation, the long-term effects of the pandemic, workforce supply and the future of the suburbs. He called for London’s senior leaders to work together, across sectors, and for the city as a whole not to be complacent about taking action.

Responding to Joanna’s and Pat’s presentations, a lively discussion followed in which our attendees addressed the question of what London’s senior leaders need to do to prepare the capital for the future – and how they might do it.

Tackle the public sector’s confidence gap

One of the factors that can impede progress is confidence within the public sector. This is inconsistent across councils, and this impacts on the ability of private- and third-sector partners to deliver to time and to budget. Attendees expressed concern that some council officers are often more afraid of failure than of inaction, which can be due to significant political and capacity pressures.

London’s leaders can help improve public-sector confidence by addressing the skills gaps within local authorities. This will boost their capacity to deliver more affordable housing, retrofit existing homes and develop industrial strategies.

And cross-sector knowledge sharing remains key to this. Just as most global cities are tackling the same issues, so are most London boroughs.

Deliver more ‘healthy’ homes

London’s housing market is very complex and it’s an increasingly challenging climate in which to build homes. The public sector can’t borrow as much; housing associations are being forced to put rents up to cover their costs; house builders are facing skyrocketing construction costs and everyone is to address fire safety measures and climate targets.

Future of leadership - New housing with garden in front.
What London really needs is healthy homes. Image courtesy of LB Southwark.

What London really needs are ‘healthy homes’ but the sector is not yet putting enough resources into addressing this. Nor is it high enough on the government’s agenda. Reiterating Joanna’s point about how we measure social value, several attendees agreed that there needs to be more of a focus on the health outcomes of a development.

“If we can get housing right, it can address so many inequalities, particularly with regards to health and mental wellbeing” said Alice Lester. “And this would contribute towards mitigating climate change, help meet our need for low-energy buildings and thereby help address fuel poverty, and ultimately help save the NHS money.”

“We need to think as much about placekeeping as we do about placemaking.” Kate Ives

How housing and places are maintained in the long term is also critical but missing in many of the debates about the future of placemaking. By planning maintenance into a development from the outset (and being realistic about how much this will cost), we can ensure that new homes will still be healthy homes in 60 to 80 years’ time.

Find the right balance of housing and industry

Space for logistics, local food production and data centres is essential for a city to thrive. Without industrial land we won’t be able to sustain London’s future growth. Finding the right balance between housing and industry is key. For a long time, practitioners and policymakers have underestimated the importance of industrial space. Much has been lost with the result that industrial land now commands a higher price than that for housing. There’s a risk that this will result in less homes being built across London.

David Sleath argued that we shouldn’t think of them as two opposing land uses. In fact, housing and industrial space can work really well alongside each other. Bringing both jobs and homes to a neighbourhood enables active travel and boosts wellbeing. We need more enablers, such as policy and funding, to address this. Public-private sector partnerships are the way forward.

Future of leadership - Delivery vans in a traffic jam.
Space for logistics is essential for a city to thrive. And distribution and infrastructure both need regional planning. Source: FoL.

Think local…

One of the questions asked during the roundtable was “What’s the most important thing the sector is trying to achieve?” Because there are a lot of competing demands on the sector – such as building more homes, delivering net zero buildings, retrofitting existing homes so they meet the new fire safety standards and so on – it can be difficult to prioritise and individual organisations can’t solve everything on their own.

We need a steer from central government but the recent political upheaval means we’ll have to wait and see what the priorities of the new prime minister and secretary of state are.

One suggested solution was to think more at a hyper-local level and let local people shape our priorities as they know what’s needed in, and best suited to, their area. Doing extensive community engagement would help shape a programme around local needs and ‘unlock’ development.

Ideally this would be made easier by the devolution (both political and fiscal) envisaged in the government’s Levelling Up agenda but it remains to be seen how this devolution will happen in practice.

However, attendees did also reflect on the fact that ‘local’ isn’t the right scale for everything. Distribution and infrastructure, in particular, need regional planning and this requires cross-borough and cross-sector collaboration. In the past, we’ve focused on the transport links needed for large-scale developments but in the future we’ll be increasingly concerned about fibre optic broadband and whether there’s sufficient power and energy for a development – all of which need to be addressed regionally.

“Leaders of other cities still look to London to see how we’re tackling complex urban problems like transport infrastructure, land value capture and the Olympic legacy; we’re held up as an exemplar to other cities.” Joanna Rowelle

…And think long term

One of the tensions discussed at the roundtable is the fact that local leaders are planning 10 to 30 years ahead, but national government tends only to think as far as the next election. This short-term political culture is having a negative impact on the built environment sector, especially from a policy point of view.

Large-scale, long-term development is often funded by international wealth funds. London needs this finance in order to maintain London’s appeal as a global city in the long term. One of the challenges for leaders across the sector is how we can use links with other UK cities to make sure both London and UK continue to hold up as stable places to invest in.

Conclusion

London’s current built environment leaders have a huge influence in the capital’s future over the next 10 to 30 years – and beyond. We need a confident, empowered public sector to work with the private and third sector to navigate the complex challenges of delivering a global London. Equitable heath and wealth distribution cannot be divorced from technology, housing or climate change. The balance must be found between tackling issues and opportunities at hyper local or city-wide levels. By sharing ambition and lessons learnt across and between cities, leaders will be better equipped to capitalise on the opportunities and tackle the challenges facing us.

Thanks to Arup for kindly hosting this event, which was part of our Leading through crisis series. If you’d like more information, please get in touch with Sophie Nellis.