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Boroughs apply brakes to Boris' Olympic power grab

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London’s councils have pulled the handbrake on Boris Johnson’s plans to seize control of the Olympic Games legacy and scrap the capital’s economic development agency that were presented as part of a raft of proposals for further devolution from Whitehall to city hall.

In June, Mr Johnson announced a package of proposals to take on more power from central government, including moves to take the capital’s housing and regeneration budget under direct mayoral control and seize full control of the Metropolitan Police Authority.

But following consultation, the mayor’s office has failed to reach agreement with London Councils and the London Assembly on two key proposals to scrap the London Development Agency and form a Mayoral Development Corporation to take control of the Olympic Legacy.

In a letter to communities secretary Eric Pickles, Mr Johnson, Jules Pipe, mayor of Hackney and chair of London Councils, and Dee Doocey, London Assembly chair, said that while agreement had been reached on many areas, including scrapping the HCA’s London office, the issue of the LDA and the Olympic Legacy required “further discussion”.

The mayor proposed that the existing Olympic Park Legacy Company should be reconstituted as a Mayoral Development Corporation, with planning powers over areas in Hackney, Newham, Waltham Forest and Tower Hamlet.

But the London boroughs wanted to retain the planning powers and exercise them jointly with the mayor, a report attached to the letter said, while the London Assembly supported devolution to London “but not the extraction of powers from boroughs”.

The London Assembly added that consideration should be given to an urban regeneration company, rather than a development corporation, in order to retain “the local / strategic split in planning powers” with the geographical area only covering that of the existing OPLC. “Otherwise it could have unintended consequences of slowing down and removing or hindering local democratic oversight of development in other nearby areas,” the report said.

The three parties have also failed to reach agreement on the mayor’s proposal to scrap the LDA and “fold” it into the GLA, with London Councils concerned about what will happen to the LDA’s employment and skills funding, the report stated.

According to the report, London Councils would only support this proposal so long as “relevant funds for employment and business support” are devolved to the boroughs using the Local Enterprise Partnership model “applied across England”.

The report said that, as with the “double devolution” of housing and regeneration funding, the boroughs would be required to “use this funding to commission services locally but consistent with a strategy set by groups of boroughs working together”.

It said that “foundations for LEPs already exist across London”, such as the Host Boroughs’ partnership, the South London Partnership, the West London Alliance, Central London Forward and the North London Strategic Alliance.

But the Mayor, London Councils and the London Assembly did agree on:

  • The London office of Homes and Communities Agency to be taken over by mayor’s office in a new Housing and Regeneration department, with a decision-making board comprising the mayor, three London borough representatives and three mayoral appointees. A single pot of funding set up with decision-making over allocation of funding devolved to the boroughs on the basis of devolved funding agreements that align local plans with the mayor’s strategic plan.
  • The London Thames Gateway Development Corporation to expire at the of its current life in 2012/13 with powers returned to boroughs
  • The mayor and the secretary of state to jointly award the rail franchises for London suburban rail lines, with the mayor given a formal monitoring role
  • Functions of the Metropolitan Police Authority divided between the mayor and the London Assembly, with the assembly taking on the scrutiny functions. A Nnw police board would include elected representatives, including London Assembly members and borough leaders
  • The GLA to take on resilience functions of the Government Office for London, which is to be scrapped
  • Government funding for teh expanded GLA not be ring-fenced other than for areas such as housing and regeneration, transport and skills
  • Control over the Royal Parks Agency devolved from Whitehall to the mayor, with a board comprising three London borough representatives and three mayoral appointees
  • Control over the Port of London Authority devolved from Whitehall to the GLA with the mayor appointing a Port of London Authority Board, with Kent and Essex given a right of representation
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