Carillion and why ordinary people feel the system is rigged against them

Many Islington residents will have been shocked by the dramatic collapse of the massive private construction firm Carillion in recent weeks.

The first priority of the Government in responding to this crisis should be to help protect the more than 20,000 Carillion employees in the UK, who are understandably extremely concerned about the future of their jobs.

Many small firms in the supply chain will also be affected by the collapse of this speculative business, including local firm K&M McLoughlin Decorating. They must not lose out when the big banks are demanding payments from Carillion’s liquidators, as the impact on jobs will be even harsher if they are.

One way the Government could immediately support thousands of Carillion’s employees would be to bring crucial public sector contracts the company leads back under public sector control. This process of bringing contracts back ‘in-house’ would protect jobs now and right the wrong of years of speculative Government outsourcing.

Islington Council does not have any contracts with Carillion and has been at the forefront of moves to bring services and contracts back in-house and under local democratic accountability.

Since 2010, we have brought major services such as housing and waste collection back in-house, as well as others including housing repairs, education, CCTV, cleaning services, and caretakers. The trade union UNISON recognised the work Islington has done in this area, using the return of cleaning services to the council as a case study in a report on the benefit of in-housing services.

At a time when the Government is cutting the Council’s core funding by 70% in a decade, bringing services back in-house has also helped us to save money that can be used to protect frontline services. For example, our decision to bring waste collection services back in-house has helped us to save around £3 million a year, whilst not affecting the standard of service residents receive.

When the benefit to local people is clear, such as in the case of the many schools that were rebuilt in Islington under the Labour Government’s Building Schools for the Future programme, we will of course not turn down such investment. But this Government has failed to secure much public good from its deals with the private sector.

We think the council and public sector should be the default provider of services. This helps services to be better linked together to deliver results more quickly for local people. In Islington, we have shown that the ‘private good, public bad’ mantra, that has been the dogma of recent Governments, isn’t true.

If there is one lesson that is taken from the Carillion collapse, it’s that we should back the public sector to provide the services and building projects people rely on. I am proud that Islington has shown the success this approach brings and we will continue to argue for more councils to follow our lead.

But there is a wider point about how our economy currently works. Whatever happens with companies like Carillion, senior executives always seem to come up smelling of roses, whereas ordinary working people are left either without a job or worrying for their futures. We need an economy that isn’t rigged against working people, and instead helps make our society fairer for all. That’s Labour’s mission, and it’s time this tired Government let us get on with it.


A version of this post was originally published in the Islington Tribune.

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Islington Council’s budget: Labour values in action

At this time every year we publish our first draft of Islington Council’s annual budget for the next financial year.

A lot of work goes into this: setting the budget is the most important decision that Councillors have to make each year.

Islington Labour’s budget this year invests in our key priorities of new Council Housing, helping the most vulnerable and giving the best start in life for all children.  Today we announce:

  • We’re planning to invest £57 million into new council homes. This is the council’s biggest investment into new build homes in over 30 years. New Council homes will be built on estates including Kings Square, Dover Court, Elthorne and Park View
  • An investment of almost £14 million into Tufnell Park Primary School, to provide a modern, new school, that will enable expansion of the school from the current one and a half form entry to three form entry, providing high quality school places at a good local community school.
  • Scrapping council tax for all Islington foster carers, including those who foster adults on the council’s Shared Lives scheme for vulnerable adults. Any registered foster carers in Islington will not have to pay council tax in Islington, to help them cope with the cost of living and encourage more to become foster carers . To pay for this, residents that own empty properties in Islington will now be charged double council tax on empty properties.

This shows Islington Labour’s political priorities: investment in council homes and hihg quality public services while asking those who can afford to pay a bit more to help those who need it.

Overall, the ongoing massive Tory cuts to Islington are forcing the Council to find £32 million in savings.  The full list of the draft proposals is published on the Council website here.  please let me know your thoughts.

I’m proud that for another year we’re protecting the services that really matter, such as libraries, Childrens’ Centres, leisure centres, the Ecology Centre, street sweeping and refuse collection.

We’ve found much of the money through finding ways of raising extra revenue and also really good management of the assets and money we have.  But the scale of the Tory cuts is immense. Since the Tories came to power (facilitated by the Lib Dems) and 2020, national government will have cut its core funding to Islington Council by 70 per cent, since 2010 – that’s £200 million of lost spending power each year.  Demand on key services is increasing putting massive extra pressure on our budget.

I think we’ve managed this near impossible task in Islington as well as could be asked of us. We’ve carried on making a difference in the toughest of times. But the strain is showing. There are fewer staff doing more jobs and this will be felt by local residents. More worryingly, as every other public service  in the borough is either under-funded or outright cut it becomes more challenging to know where the gaps between Council, NHS, Police and other services will emerge.

What worries me most is the level of strain across the public sector after 8 years of damaging austerity cannot be continued. nationally many areas are reaching a tipping point where only urgent problems are being addressed meaning that many preventative services are being cut and demand will rise faster still.

I’m proud that Islington Labour continues to be run a competent Council while being true to our political values, we cannot disguise the problems the Government’s austerity agenda is causing.




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Thank you and onwards!

Thank you to all the members of Tollington ward Labour Party who voted this evening to re-select myself and Cllr Flora Williamson to re-stand in next year’s local elections.  We’ll be joined by Anj Khurana, who won a very comradely contest to be our other candidate.  Anj is a Tollington resident and disability rights campaigner. She’ll be an excellent councillor.

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Concern about the NHS STP

I’ve written a joint letter with other local Council Leaders to Simon Stevens, Chief Executive of NHS England, about our concerns regarding the way the NHS Sustainability and Transformation Plan (STP) process is developing.

The letter can be found here.

My thanks to fellow leaders Cllr Georgia Gould (Camden), Cllr Claire Kober (Haringey), Cllr Doug Taylor (Enfield) and Cllr Richard Cornelius (Barnet) for work on this joint initiative.

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A Soapbox and lazy thinking about ‘regeneration’

I had the pleasure of saying a few words on Thursday at the opening of Soapbox, Islington Council’s new youth centre on Old Street.

Soapbox is a fantastic new space, enabled by Islington Council’s development of new Council Housing on the nearby Redbrick estate. As well as excellent dance and arts space, it hosts a Virtual Reality (VR) cave, multimedia suites, two recording studios, 3D printing facilities and a radio studio.  All this in an old Council office that used to administer parking.

The website for Soapbox is here:

The aim of Soapbox isn’t just to provide young people with affordable and cool things to do – important as that is in a borough where child poverty is still among the highest in the country – it’s also to start the process of linking local young people into the opportunities in the tech industry around Old Street.

This is where the challenge to the lazy thinking I believe is at the heart of some so-called regeneration comes in.

In the 1980s an economic theory called ‘trickle down’ became fashionable in some right wing circles.  It said that if you put more money in at the top of an economy, for example through massive tax cuts for the rich, this would trickle down through the economy as better off people took on more staff, paid better wages etc.  The theory was roundly debunked in international development as it became clear that all putting more money in at the top did was make the rich richer and the poor no better off.

However, somehow this theory still seems to hold in some urban ‘regeneration’ in Britain.  There are still people who seem to believe that simply by building new blocks of expensive apartments this somehow regenerates an area and improves the lives of the existing residents.  These promises of ‘regeneration’ get made readily by the development industry without real thought to whether their shiny new building really helps anybody (apart from themselves, obvs…).

But too often ‘regeneration’ either doesn’t touch the lives of existing residents or actually makes them worse.  New housing that isn’t affordable or accessible to existing residents (or even lived in at all) is built by people with no local connections because i’s cheaper for construction company’s to import labour than train local people.  New offices area created that employ no one form the local area.   New shops and restaurants open that aren’t affordable or welcoming to the long standing local population, and don’t employ them either.  Old community institutions like pubs close and are replaced by, say, artisan coffee shops where a cup costs the daily household food budget.

This kind of lazy ‘regeneration’ make already hard lives much harder while delivering next to no benefits at all. London strikes me as a city that is in sever danger of eating itself: it’s housing market is disastrous for many if it’s residents and research by Central London Forward shows an economy that is increasingly specialising in a small number of sectors and so is more fragile.  Post the Brexit referendum our city’s reputation seems increasingly toxic both nationally (London bashing is becoming a national sport) and internationally (which EU tourist or business person wants to come to a place where they don’t feel welcome?).

This isn’t to say new building is bad.  Quite the opposite in fact.  Our city desperately needs new homes. But to usefully contribute to ending our housing crisis, a good sahre of these new homes have to be affordable to more than just a very fortunate few.

And if economic growth is to be sustained it can only be done by being fairly shared.  Put another way, if areas like Old Street are to become genuinely economic power houses, the local population needs to be engaged and employed in them.  Without that sound footing the potential for economic growth is transitory.

Islington, and neighbouring boroughs like Hackney, are alive to this threat. So while we welcome new investment into the borough we are tough in ensuring that there are decent percentages of any new housing is both affordable and allocated to local people; while new work spaces should include a proportion that is affordable to local organisation and start-ups.  For example, we strongly believe that all new affordable housing should deliver as close to 50% genuinely affordable housing, mainly social rented housing, as possible.

We work hard to build links with growing sectors in the economy, like tech, in order to support local residents to get jobs and apprenticeships in them. Schemes like our Creative Apprenticeships aim to allow working class to break into careers that often only go to middle class kids who can do unpaid internships.

We’re trying to work with the construction industry to encourage them to make a much more significant commitment, particularly post Brexit, to training labour instead of importing it ready trained (not that I’m against free movement but we need local jobs too).  This is hard work as the industry hasn’t properly invested in training for years. There are, speaking frankly, superficial commitments to apprenticeships but often these have little actual value. Sorting this out cannot be done by individual boroughs and will take serious and long term commitment by both the Mayor of London (where it does exist) and the Government (where it doesn’t).

So why Soapbox?

Because an area like Old Street is changing so rapidly that there is massive risk the local population is left behind.  Yes Old Street now has more than its fair share of artisan coffee, trendy clubs and massive blocks of expensive flats, but it also is home to a proud Finsbury community that feels increasingly like the area doesn’t belong to them.

Soapbox is way for Finsbury’s (and the rest of Islington’s) young people to get exposure to not just  to mew technology but also to the kind of companies and individuals that are behind it.  Institutions like Soapbox are critical to breaking down the divide that rapid change to an area can create. They can become shared spaces where the different occupants of the area meet and swap ideas. Most important, the can be a launching point for life changing opportunities.

We’re rightly proud that Islington has protecting it’s investment in young people over the last eight difficult years of austerity. Soapbox can show the long-term potential of that investment.

POSTSCRIPT: I know the arguments involved in this are complex and I couldn’t possibly seek to do them, and the economic analysis that sits behind them, justice in a short blog post.  I hope though that that this post gives some sense of Islington’s thinking about economic development.


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Islington’s German invasion

Islington was invaded yesterday by fans of FC Cologne, intent on going to the match at the Emirates whether they had tickets in advance or not.

It’s rumoured 20,000 Cologne fans travelled for only 3000 away tickets. And they seemed to have brought a generous number of samples of Cologne’s extensive brewing industry with them.

It’s a long time since we’ve had this kind of challenge at a match and there were some real problems for the borough as a result.  I note both clubs have now been charged by UEFA in relation to the match.

I should say that, although they were ‘three sheets to the wind’, the vast majority of Cologne fans were good humoured and just interested in enjoying themselves.  As I walked around the area last night I got into a few friendly chats with Cologne fans revelling in their club’s first European match in 25 years.

But there was some behaviour by ‘fans’ that was utterly unacceptable. Residents had gardens urinated in, a few were insulted and harassed, there was some violence around the stadium and the Highbury/ Holloway area looked a state. Some residents have called it “chaos”; and with good reason.

I’m very grateful indeed to all of the Council staff who worked so hard to clean the borough up last night and this morning. The fact that Highbury Fields was clear by 9am this morning was a great piece of work.

I’m also very grateful to the Police and Arsenal staff working around the stadium who did, in my view, an exceptional job in very difficult circumstances.  The fact that the match passed off without a serious incident is a tribute to the Match Commander and his team.

However, Islington Council did not receive notification of the number of away fans travelling or the potential scale of the problems they might cause.  There is an important question to be asked about why the central Met Police team whose job it is to gather intelligence on travelling football fans either didn’t spot this match as high risk or didn’t pass this information on.

We have experience in Islington of dealing with major football matches. There were similar issues when Dortmund played Arsenal a few years ago, but these were flagged in advanced and an intensive Policing operation was put in place.  This doesn’t seem to have been the case last night.

The Council will convene the interested parties to learn lessons and push the Met to ensure intelligence on travelling European fans is gathered and acted on.

Arsenal are fundamental part of Islington.  We are very proud to have one of the country’s best football clubs in our borough. But we will keep working to ensure that residents and fans are kep safe.  As a boy, I witnessed a football disaster at Hillsborough and will never compromise on the safety of those attending football matches.

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The great Mount Pleasant rip-off

The news that the now privatised Royal Mail Group has sold the Mount Pleasant site to developer Taylor Wimpey for £193 million, a mere 565% of the ‘book value’ of the land, is the latest chapter in a genuine scandal.  And it’s a story that typifies why so many people feel let down by Tory-facilitated crony capitalism.

The Mount Pleasant site straddles the border between Islington and Camden boroughs.  It’s a prime site for a potential development at a time when London needs to massively increase the number of homes it builds each year, particularly homes that are genuinely affordable to people on low and modest incomes.  It’s important to say that Islington Council and I strongly support the principle of building new homes on the site, but that these have to contribute to helping the thousands of local residents whose lives are being ruined by being forced to live in appalling over crowding, or those struggling to get onto the housing ladder.

This piece by the excellent Dave Hill gives a pretty fair summary of the history of this site.

From the start Royal Mail Group had no interest in talking to Islington Council about the site.  Islington has among the toughest set of planning policies in the country and our independent analysis showed that a commercially viable development could be built with almost 50% of the new homes created being genuinely affordable.  Royal Mail Group made no effort to comply with this ethical approach to development and instead put all of their energies into lobbying then Mayor Boris Johnson to use his powers to ‘call-in’ the planning decision.

It’s important to understand just how important planning permission is in deciding how much any given piece of land is worth.  The value of a site like this land is set by how much money a developer can make from it. The granting of a planning permission for a very lucrative development will massively increase the value of the land, while a tough set of planning conditions on any site will reduce its value. Developers regard a site with a planning permission already in place as a less risky purchase and so the value rises accordingly – hence Royal Mail’s determination to get planning permission before selling.

The planning permission that Mayor Johnson gave was unprecedentedly weak, in the Islington’s recent history, at getting genuinely affordable housing.  It ran contrary to both Islington and Camden Council’s planning policy, but also contrary to his own GLA planning policy, which argued for a higher number of affordable homes on a prime site like this.  It therefore massively increased the value of the site to the owners.

It’s not like the potential windfall profits Mayor Johnson’s generosity generated for Royal Mail Group are a surprise.  Labour Shadow ministers warned in 2013 that the property assets of Royal Mail were vastly undervalued. This sale shows they were absolutely right. The Minister responsible was Lib Dem, Sir Vince Cable.

So some investors have made a ton of money and the politicians involved haven’t done too badly either: Johnson is now, almost unbelievably, our Foreign Secretary and Sir Vince Cable has just been elected party leader.  What’s the problem?

Where there are winners in life there are inevitably losers too. That that’s why this scandal really matters.  It matters because ordinary people have been ripped off twice by this move:

  • Islington has a housing crisis with thousands of families desperately in need of new genuinely affordable homes. The estates around the Mount Pleasant site have scores of desperately over-crowded families whose lives would have been transformed by a decent affordable home in the new development.  The real losers from this sorry episode are ordinary working families whose search for decent living conditions will go on because Boris Johnson oversaw this outrage. Local MP Emily Thornberry and local Labour councillors campaigned tirelessly to make this point but were ignored by Boris Johnson.
  • In a broader sense, we’re all losers. The Royal Mail Group was massively undervalued when it was sold off. As Labour made clear in 2013 the property assets of the group were not properly accounted for and so the new owners of Royal Mail Group have been able to make these astonishing windfall profits. Even if you agree with the privatisation of RM (and I don’t), no one can argue that taxpayers should have been treated in this way. No wonder that major corporate investors flocked to the sale and the Ordinary Joe lost out.  The upshot of this massive undervaluing is that we, the British public, got a terrible deal and the Government considered they had licence to push through hundreds of millions of spending cuts to public services that could have been avoided with more money from the sale.

If you ever want to understand who the public are so angry with a country that seems rigged against them and are turning to the Labour Party for real change it’s sorry stories like this, where the majority have been ripped off to generate massive profits for the few.

In the short term the Government should immediately intervene to:

  1. Insist more genuinely affordable housing is built on the site.
  2. Introduce a windfall tax on the now private Royal Mail Group to recoup the losses suffered by us taxpayers.

The whole sorry episode goes to show the difference the right Mayor of London makes.  The difference now Said Khan is in power at City Hall is marked, with the new Mayor wanting to work Islington to get the maximum amount of affordable housing on the Holloway Prison site.  The votes cast in the Mayoral election really have made a difference.

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