Examination of Witnesses (Questions 8180
- 8199)
8180. Mr Elvin: Mr Colley, you are Rob
Colley; you are a partner with Drivers Jonas; could you just explain
briefly to the Committee your area of expertise?
(Mr Colley) Yes. I am Rob Colley. I am a partner
of Drivers Jonas and have been since 1999. I joined the firm in
1991. I run our strategic consultant team of about twenty people
and we deal with Treasury Green Book, office appraisals, estate
strategies and a fair amount of regeneration of property economics
work.
8181. Do you have development and valuation
experience?
(Mr Colley) Yes. Principally on the valuation
side.
8182. Thank you. Now, I would just like you
to explain your position on the differences of approach taken
by Greenwich and their advisers EDAW and Crossrail to the estimation
of benefits and growth which will accrue from Crossrail?
(Mr Colley) I think it is fair to say that
our approaches are very similar. The estimation of jobs and, indeed,
population are based on a number of key assumptions. One is the
number of sites selected, their potential development capacity
which leads to development density assumptions, and the type of
developments. We made our main assessment back in 2004-05 and
we considered ten sites in the town centre which broadly equated
to a 1 km zone around the Crossrail station. EDAW considered 14
town centre sites so they included a few more than we had in our
early schedule, but also included 38 council estates, some within
the 1 km zone and some within the 2 km, so there is a lot more
residential in there than we looked at. In our 1 km zone we looked
at around 110,000 square meters of development which we assumed
would be split fairly evenly between residential and commercial
development, and we suggested that about half of the commercial
development would be attributable to Crossrail. For residential
we adopted around 2,750 units which were from the ODPM zonal action
plan figures for Woolwich and we suggested about 10 per cent of
those units would be directly attributable to Crossrail on the
assumption that we believe that most of those units would be built
out in any event without the scheme, without Crossrail. Of the
residential units, obviously you have heard the EDAW figures yesterday
and they seemed a lot more, a net increase of about 18,000 of
which about 4,000 was attributable to Crossrail, so in terms of
our approach a very similar sort of approach looking at sites
and development capacity. I think where we differ is more on the
assumptions to some of those key variables.
8183. Let's look at the differences. Firstly,
points of agreement. There is no dispute between you and EDAW
and, indeed, between Crossrail and Greenwich, but there would
be a positive impact on regeneration from a Crossrail station?
(Mr Colley) Correct. Our view is that there
would be a significant impact with Crossrail that would be bigger
than if Crossrail were not to have a station in Woolwich, so our
basic premise is similar. Where we perhaps differ is in the order
of magnitude of those benefits and the degree to which the incremental
marginal amount is due to constructing a station there.
8184. Now the EDAW evidence, and perhaps we
can have a look at the bar chart again in the Promoters' evidence,
and if we could go please to exhibit 17, there we have London
Plan, CLRL Highgrove Scenario, the EDAW Assumptions and the GLA
Latest Forecasts.[20]
The Committee are familiar with this, having seen it yesterday.
What assumptions go into that EDAW forecast, which I put to Mr
Jones as being the highly optimistic end of the scale, which you
would take issue with?
(Mr Colley) I think the main issue
is that EDAW, in my view, have done a very good and competent
study, and obviously spent a lot more time and energy and effort
on it than we had available at the time we did our figures, but
what has been done is a development capacity study so we have
looked at every possible site that could be included in the 1
km zone and, indeed, within the 2 km zone of the station that
assumed the maximum number of sites are developed out, with or
without Crossrail, that the maximum amount of density of development
is included, and the degree to which that is attributable to having
a station there is included, so it is really the consequence of
a series of assumptions that have a cumulative effect on the final
answer. So we perhaps would be a bit more measured in what we
thought would be built out in the time available, and there is
one exhibit that was shown yesterday which showed the 1 km and
2 km zones with all the residential sites shaded pink and the
town centre sites shaded yellow, which represented most of the
land mass of potential land within a walking distance of the station.
Now, that to me looks like it would take a generation or two in
some cases to develop that out, so the quantum of development
proposed, whilst possible or indeed probable in the long term,
in the medium term I think is probably unrealistic mainly because
of funding and delivery issues. Some of the papers I have read
have assumed that for some of the housing renewal programmes,
which we did not include in our figures, it would take two generations
to transform some of the housing stock into the standard it should
be in.
8185. Now, an issue I raised with Mr McCollum
yesterday was the question of land ownerships within the central
area of Woolwich and the lack of big unified ownerships which
exist in the North Greenwich Peninsular, and it was suggested
that compulsory purchase powers could be sought to assemble the
land.[21]
Is that a speedy process?
(Mr Colley) No. In any town centre
situation land ownerships are generally more fragmented than other
larger industrial areas, and we looked at plans yesterday that
showed the area of land in the North Greenwich Peninsular which
was principally formerly in the ownership of British Gas. In the
town centre you do not have that. I agree that in Woolwich perhaps
compared to other town centres there are one or two land owners,
the Borough included, the Powis Street Estates and formerly the
MoD, so that it is perhaps less fragmented than other town centre
areas but nevertheless it is not unified ownership so to deliver
comprehensive development CPO may well be needed, and although
Greenwich have demonstrated they do have the appetite to do compulsory
or promote compulsory purchase orders, that in itself takes time,
so yes, there is some question of the deliverability and the length
of time that would take for the town centre.
8186. And the pink areas we can see on that
plan are the estates proposed for redevelopment within the capacity
study?
(Mr Colley) Yes.
8187. In terms of the arrangements for consulting
with tenants, making arrangements, satisfying them and possibly
compulsory purchase, and then not forgetting the need actually
to find premises to decant existing tenants into while the redevelopment
is taking place or as an alternative, again, how rapid a process
is that?
(Mr Colley) It is a lengthy process. My understanding
is that four of those I think 38 sites are in the current investment
programme, but I would stand to be corrected on that if that is
not the right number. I also understand that the level of right-to-buy
options have not been exercised in Greenwich as they have in some
other boroughs, partly because of the quality of the estate itself
so there has not been a major incentive to buy there, but still
the decanting of tenants into new schemes whilst the existing
sites are redeveloped is a major logistical exercise, and I have
not the figure of the number of people involved to hand but that
would be a major consideration, and might well take one or two
generations.
8188. Finally, the bottom line, to what extent
do you think that regeneration and development in Woolwich is
dependent on a Crossrail station coming forward?
(Mr Colley) My view is that Crossrail would
have a positive effect on regeneration in Woolwich, there is no
doubt about that, and I agree with Mr Lambert's comments that
the effect of a transport scheme like Crossrail is purely down
to accessibility and capacity issues. There is partly an image
question of putting places on the map, but going to visit Woolwich
now there is a lot of development activity going on; the Woolwich
Arsenal site has been and continues to be developed and units
are selling out; there is a lot of development activity; and this
is partly driven by the fact that Woolwich is on the river and
riverside developments are very popular and sell at a premium
presently, but also there is the degree to which Woolwich fits
into the whole residential supply of London. There is, as we all
know, a major mismatch between demand and supply for residential
in London and Woolwich, like any other area, is responding to
that and units are being built and sold out along the river, but
also around the town centre, so I would expect a large amount
of development to continue without Crossrail going there—partly
on the strength of the DLR station, talking to local agents and
Berkeley Homes selling Woolwich Arsenal sites, who are saying
their purchasers are citing DLR as a reason. So there is a momentum
of development happening that would be furthered by Crossrail
but the majority of the regeneration effects do not depend on
Crossrail being built, with the station at Woolwich, in my opinion.
8189. Mr Lambert said yesterday that he would
expect a surge of development to accompany the likely opening
of the DLR in 2009. Would you agree with that?
(Mr Colley) Yes.
8190. So to what extent have the positive impacts
of the DLR been fully felt at this stage in Woolwich town centre?
(Mr Colley) They are already being felt; you
can see the development going on and the sales of units. Developers
tend to be fairly slow to react to transport schemes. The promise
of the scheme is not normally good enough; when they see it coming
out of the ground that is a different matter and that is happening
with respect to the DLR. You can see the tower cranes in Greenwich
and Woolwich town centre so that has been a major spur to developers,
and purchasers as well.
8191. And we know from Mr Lambert and his report
there are three major retailers putting forward proposals for
new stores within Woolwich town centre and he expects them to
come forward regardless of Crossrail. Do you have any views about
the significance of that?
(Mr Colley) I agree with those findings. Schools
is one of the other factors that people take into account in moving
to an area over and above other items, even transport. So that
is certainly going in the right direction as far as development
and regeneration is concerned, and inward investment in Woolwich.
8192. What does the fact that three major retailers
are looking to move into the town centre—I think he mentioned
Tesco and Sainsbury, I am not sure he mentioned the name of the
third—signify in terms of the position of the town centre?
(Mr Colley) I think it demonstrates the existing
density of population which supports the growth in supermarkets
and retail space. I think Woolwich has probably suffered from
an under investment over the years in retail provision and so
to a certain extent it is catching up on that and that is what
these retailers are responding to, but they are also responding
to future anticipated increase in population and spending patterns
and they can see the number of units going to Woolwich Arsenal,
and just to the north east of this plan on the chart there is
Galliers Reach as well, which presumably would be within the catchment.
8193. Thank you. Then, finally, in terms of
the regeneration issues, the question of offices. We know from
Mr Lambert that Woolwich is not an office location at the minute.
He referred to its possible growth as a back office location.
What views do you have about that as a realistic approach?
(Mr Colley) Well, I think many of the peripheral
stations along the Crossrail route at any peripheral centres around
London are not office locations and will never become office locations,
and I think Woolwich is one of them, partly to do with the fact
that although there may be some fragmented demand for back office
locations what drives business costs now more than the property
costs and rental costs are wage costs, and there is a significant
differential wage cost between any London borough and moving out
of London. We have done some work on relocating a government department
and the interesting factor was that Birmingham, as it was, was
15 per cent lower in wage costs than London and it did not really
make much difference how much the property costs were. Also, what
seems to be happening in London is the reinforcement of the central
London cluster, and we have mentioned the finance and business
services in the centre of London, so that is the West End, mid
town, city and Canary Wharf. That is where the jobs are and that
is where the clustering of the agglomeration benefits are. You
do not get that sort of clustering benefits in peripheral town
locations. There are not similar firms you want to interact with
or support services, so there may be one or two office occupiers
that would move small offices here but nothing major, so I do
not think either Woolwich, or Abbey Wood for that matter, are
likely to become office locations.
8194. Mr Elvin: Mr Colley, would you
wait there, please, thank you.
Questioned by the Committee
8195. Kelvin Hopkins: Mr Colley, just
briefly, the major generator of additional income for a local
population might be jobs in the locality perhaps having better
access to the jobs in London, as you say, where wages are high.
Woolwich is not dissimilar in many ways from my own town of Luton,
which I represent, where we service a lot of towns roundabout
and we need good transport facilities for people who do not do
the higher paid perhaps higher qualified jobs, but the police
officers, the train drivers and people like that who need good
access, and the more good transport access they have got to other
areas nearby the more they are likely to earn and bring wealth
and good incomes into the area. That is the major benefit of having
good transport links, is it not?
(Mr Colley) Yes, and I would not dispute that,
but I would say that Woolwich is not devoid of transport at the
moment and we spent some time yesterday comparing Woolwich with
North Greenwich which, before the Jubilee Line went in, had no
public transport to speak of and that is not the situation here.
We have heavy rail into London Bridge, we have DLR coming in and
intensive bus networks, so we are not starting from the point
of a blank sheet of paper in transport terms, but I agree with
what you are saying. Also, I think the good news story from the
point of view of the residential developments that we are seeing
growing up at ever higher densities in the peripheral town centres
is there is a lot of local employment generated by housing both
in the public services, schools, hospitals, doctors' surgeries,
but also local support services—restaurants, bars and legal
services—so it does mean that without having to link your
transport into central London to get the higher value FBS jobs,
there is a lot of local employment generated through the provision
of high density housing which seems to be the case in Woolwich
and other locations.
Cross-examination by Mr Jones
8196. Mr Jones: I would like, first of
all, to deal with your calculations that led to the figure on
Promoters page 17.[22]
I think your calculation is that you work on the basis of 2,750
new homes, is that right?
(Mr Colley) Yes.
8197. So you have 2,750 new homes in Woolwich.
Can we just do the arithmetic from that? Presumably in that arithmetic
you allowed for the 2,517 new homes that have been provided in
the Royal Arsenal?
(Mr Colley) Correct.
8198. So that left 243 new homes in the whole
of the rest of Woolwich?
(Mr Colley) Yes.
8199. And that is the London Plan figure effectively,
243 new homes in the whole of Woolwich. Now, what weight did you
give to regeneration of any of the housing estates in Woolwich
when you calculated the number of homes?
(Mr Colley) As I said earlier we did not include
the housing renewal sites at all.
20 Crossrail Ref: P77 Population and Employment Growth
2001-2016: Woolwich Station Catchment (GRCHLB-3604-017). Back
21
Committee Ref: A84, Fig 6.1, Scope and location of Development
Opportunity Sites (GRCHLB-3605-130). Back
22
Crossrail Ref: P77 Population and Employment Growth 2001-2016:
Woolwich Station Catchment (GRCHLB-3604-017). Back
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