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Revealed: 75 senior London councillors have financial ties to property developers

Scores of lobbyists for the building sector also hold senior roles in local government, openDemocracy has found

profile2.jpg Jenna Corderoy
Lucas Amin Martin Williams Jenna Corderoy
5 May 2022, 1.49pm

75 of London's most influential councillors have ties to building and development firms, openDemocracy found

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Cranes image: AJSlondon / Alamy Stock Photo. Ballot box image: Adobe Stock

At least 75 of London’s most powerful local councillors are also working for the property and development industry, openDemocracy can reveal.

Our analysis of hundreds of council documents shows how scores of lobbyists and other workers for the sector simultaneously hold senior roles in local government, working in council cabinets or on the influential committees that are supposed to hold developers to account. All but 11 of the 75 have stood for re-election in 2022.

We looked at the councillors with the most say over housing supply, demolitions and new builds, and found 13% of Conservatives had financial ties to the property industry. The figure is 6% for the most powerful Labour councillors.

We also found a number of cases that illustrate just how close local politicians are allowed to get to the development sector while acting within the rules.

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In one example, a Tory cabinet member in Havering, north-east London, boasted about a “win” for his lobbying firm after its client was awarded planning approval – by his own council.

In another case, a Westminster councillor who sat on a planning committee was hired to advise a property firm as it tried to secure the council’s approval for a major development. Both are standing for re-election today.

Financial interests were declared in each of these examples, and there is no suggestion that lobbying rules were broken.

But campaigners warned that having so many local councillors with ties to property development “does nothing to help the perception that the planning system favours industry over communities”.

In most English councils – including Havering and Westminster – the code of conduct says members should not “place themselves under a financial or other obligation to outside individuals or organisations that might seek to influence them in the performance of their official duties”.

This is a ticking time-bomb for the lobbying industry

Steve Goodrich, head of research and investigations at Transparency International UK, said: “Given the controversy often surrounding major planning decisions, it’s crucial to confidence in the process that they are made impartially and free from bias.

“To provide greater trust in local development, councils should not allow members to hold briefs where there is a clear tension between their public roles and private jobs.”

He added: “This is a ticking time-bomb for the lobbying industry, which should get on the front foot and stop this practice before it gets out of hand.”

Analysis by openDemocracy looked at financial interests declared by 941 of London’s most influential councillors, who sit on planning committees or make decisions as part of council cabinets.

In total, 75 of these had ties to the property industry, including developers, consultants and lobbyists.

‘Cause for celebration’

Osman Dervish has been a Conservative member of Havering Council since 2010. He has previously held the planning portfolio and served on the council’s planning committee, and is now the cabinet member for environment, earning almost £40,000 a year in allowances.

But Dervish also works as an associate director for Cratus Communications, which offers “strategic political advice” to clients making planning applications.

In 2020, one of Cratus’s clients secured permission from Havering Council to build 88 new flats on a car park, 35% of which were to be “affordable”. Cratus said it had provided “stakeholder engagement” for the developer, Caerus, throughout the process, including “engagement with senior politicians in Havering”.

When the planning application was approved, Dervish took to social media to describe the decision as a “win” for his firm.

Dervish’s lobbying job was declared in his register of financial interests at the time, and Havering Council told openDemocracy it was satisfied he had not personally taken part in the planning approval. Cratus said he had not been part of the project on the company’s side, either, despite his post on LinkedIn.

However, through his work with Cratus, Caerus admitted Dervish had met with its managing director to discuss other projects outside the borough.

What is a planning committee?

Most planning applications are small-scale and can be decided by council officers directly. But the biggest proposals with the most potential for controversy, such as major new buildings and redevelopments, are handed over to a committee of elected councillors.

These planning committees meet regularly, in public, to vote on whether or not these projects can go ahead. They are among the most important and influential groups within local councils. Their decisions can have far-reaching implications about growth and investment, affordable housing, social change and employment opportunities.

When weighing up the pros and cons of a building proposal, the committee hears directly from the development firm, as well as any objections from neighbours. When necessary, councillors will demand changes to a planning application.

This means lobbying by property developers is a "normal part of the planning process", according to the Local Government Association (LGA). But it warns that this "can lead to the impartiality and integrity of a councillor being called into question, and so care and common sense must be exercised by all parties involved”.

The LGA adds: "The striking of this balance is, ultimately, the responsibility of the individual councillor."

To ensure a broad range of voices is heard, planning committees are made up of councillors from across the political divide. Sometimes there is more than one committee on each council due to the amount of work involved.

Alongside planning committees, each council has a cabinet. These operate just like the cabinet that makes up a national government, with a group of senior politicians chosen directly by the council leader. Typically, each cabinet member will focus on a specific area, like housing or environmental issues. Although they won't necessarily vote on every major planning application, they are in charge of strategic oversight for the whole council.

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In a second case examined by openDemocracy, a senior councillor in central London declared that he had advised a property company on a “landmark” local development. The council said he had had nothing to do with its subsequent decision to enter into a partnership with the developer, which secured it up to £151m of public funding.

Westminster councillor Tony Devenish is one of the most influential figures in London property development, serving as deputy chair of the London Assembly’s housing committee.

The international property firm LinkCity spent years trying to get the first phase of a massive 20-year regeneration scheme off the ground, via planning chiefs at both Westminster City Council and the Greater London Authority (GLA), of which the London Assembly is part.

At the same time, LinkCity was paying for advice from Devenish through his personal consultancy business.

In accordance with the rules, Devenish updated his register of interest in 2018 to declare that he was advising the developer. He had been copied into an official letter from the GLA handing the final say on the first phase of the scheme back to Westminster just weeks earlier.

The following year, LinkCity set up a joint venture with the council to develop the site, securing up to £151m of council cash in the process.

During this period, Devenish was also a member of the council’s influential Planning & City Development Committee, although there is no record of him or the committee becoming involved in the project.

The Church Street regeneration project was not without its own controversy: the wider 1,750-home scheme has been criticised by other Westminster councillors over the amount of affordable housing it would provide. Local groups have condemned the project as “gentrification”, “designed to price the community out”.

One councillor criticised the way the plans were dealt with, saying: “Time and again, we saw the council waiving the affordable housing and taking a diminished amount of money in its place.”

Devenish did not respond to questions from openDemocracy, but the council said it has “absolute confidence in the integrity of the planning process”. A spokesperson said Devenish had not been part of any discussions or decisions about the LinkCity project.

Records show he earns more than £58,000 from the GLA, on top of a £9,622 allowance from the council.

Croydon hotel development

A third case involves the deputy leader of Croydon Council, Stuart King.

As well as his political role, King holds a senior position at a public affairs firm called Terrapin Group.

The company specialises in property and development in London, offering clients “targeted political engagement”.

In January this year, one of Terrapin’s clients bought the council-owned Croydon Park Hotel for £24.9m – £5m less than King’s council had originally paid for it three-and-a-half years earlier.

The developer, Amro Real Estate Partners, has said the project is worth £200m.

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Croydon Park Hotel, Croydon, England, UK

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Kalki / Alamy Stock Photo

Before the deal was complete, a government-appointed panel said the council should consider delaying the sale due to the economic impact of the pandemic. But Croydon Council went ahead.

Records show that King, who earns £42,000 from his job as deputy council leader, had to withdraw from at least one meeting about the plans, citing a “conflict of interest”.

King’s employment at Terrapin was fully declared in his register of interests, and lobbying rules were adhered to. He told openDemocracy: “I do not work on any Terrapin client work in Croydon as this would be a conflict with my role as a councillor in that borough.

“The disposal of Croydon Park Hotel was a matter that fell within my cabinet portfolio of responsibilities. Once I became aware that Amro were one of those bidding for the site, I declared that interest and recused myself from all further involvement.”

Neither Amro or Terrapin Group responded to questions about the development, while the council refused to comment.

Election advice for developers

The findings come ahead of Thursday’s local elections, which property developers are already assessing to maximise their political influence on planning.

London lobbying firms have offered advice sessions for developers, to help them navigate the political landscape.

Terrapin’s Peter Bingle took to social media to encourage developers to get in touch for political advice, saying: “Worried about the local elections next Thursday? Will your scheme be impacted by a change of political control? Have you been speaking to opposition councillors who might be in control on 6th May?”

Cratus Communications also offered political advice sessions “for developers and planning consultants” ahead of the local elections. An advert for the events boasted that Cratus would help property bosses “shape the way we approach development proposals”.

The Cratus advice sessions were led by two serving London councillors, including Dervish at Havering Council.

The other session leader was Vanisha Solanki, the cabinet member for housing and homelessness at Redbridge Council, who also works as an account director for Cratus. On the lobbying firm’s website, her biography says that Solanki has previously sat on the council’s Planning Committee, “which has allowed her to gain a deeper knowledge of the planning process”.

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