Property Developers Have No Place in Local Government
In the UK, local governments are constantly agreeing to sleazy deals to provide hyperprofitable contracts to property developers. The only solution: ban developers and their lobbyists from councils.
Westminster City Hall is the sordid epicenter of sleazy deals between local government and property developers. (Westminster City Council)
The rolling scandals generated by Boris Johnson’s government show that Westminster Parliament is a rotten place. It’s full of former prime ministers being paid up to £200 million for nebulous “business advice” to failed businesses; former ministers spending their time representing offshore tax havens rather than their constituents; and, most disgustingly, MPs cynically using the murder of one of their colleagues to argue that they shouldn’t have to disclose their shady expenses claims.
But just ten minutes’ walk down Victoria Street in London is another, thoroughly more banal form of sleaze. It may not have the glitz and glamour of the British Virgin Islands, and rather fewer Russian oligarchs grace its halls. But local government planning permission is the bread and butter of corruption in the UK. The current incarnation of the Labour Party will never act on it, because too many of its councillors have their own conflicts of interest. And Westminster City Hall is its sordid epicenter.
To state the obvious: local government is a decidedly boring topic. This boredom is precisely what allows its conflicts of interest to hide in plain sight. There is almost no effective oversight of councils. The collapse of local media, and the hollowing out of the national media in cut after cut after cut, means these conflicts of interest are almost never covered. Most people don’t know who their councillors are and simply treat local elections as an opinion poll about the national leadership. In major cities, where it’s common for the young and poor to move every year, the problem is even worse — and it’s compounded by the fact that each move requires people to reregister to vote or be disenfranchised.
But there’s one group that cares very passionately about local government: property developers. Local councils control the planning process, and the right planning permission can cause land to increase as much as three hundred times in value, as developers cram more people into a confined space and “value engineer” their way around safety restrictions.
With so much money to make, and so little risk of being caught, of course conflicts of interest are everywhere in local government. In London, almost one in ten councillors has links to property developers — the very developers whose applications they approve.
Sleazy Epicenter
The real wretched hive of villainy is Zone 1’s Westminster City Council. In 2018, the council was the home of 74 percent of all gifts and hospitality to councillors in London, despite having less than 3 percent of its population. To state the obvious, property developers don’t get rich by writing a lot of checks. Their gifts are a (tax-deductible) investment — the question is what they’re getting in return.
Sleaze isn’t a new development in Westminster’s rotten history. Previously, the council was led by Tesco heiress and sometime dame Shirley Porter. Porter is most famous for her aggressive campaign of selling off council houses in marginal wards to drive the poor out of Westminster and ensure stable Tory majorities. To escape £42 million in surcharges, interest, and costs, Porter fled to Israel and moved millions of pounds into a complex web of offshore companies and trusts. Eventually, she did a deal with her Conservative successor to repay less than a third of what she owed, crying poor — before moving into a £1.5 million flat in Mayfair.
The modern Westminster council aspires to conflicts of interest on a slightly less grand scale. Robert Davis, its former chair of planning, oversaw billions of pounds in property development while receiving 893 gifts from lobbyists, who are frequently developers seeking planning permission. Meanwhile, its Conservative lord mayor, Andrew Smith, works for “public relations” firm Westbourne Communications, whose services include “delivery of planning approvals.” A property developer might be forgiven for getting the wrong idea — as could members of the public.
Tacit Encouragement
Why isn’t Keir Starmer’s Labour Party screaming it from the rooftops? Because Blairite politicians do not want to have a conversation about sleaze any more than the Tories do. Some right-wing Labour MPs are the unabashed masters of maneuvers that stay just within the toothless rules — like Jess Phillips using a rigorous recruitment process to employ her own husband as her office manager, or former MP and convicted fraudster Denis MacShane claiming expenses for his garage as a constituency office.
The House of Commons rules at least officially prohibit MPs from engaging in paid advocacy, even if their enforcement is a joke. The worst they can do is make an MP apologize, or suspend them from their less-well-paying job — for a mere thirty days, in Owen Paterson’s case.
What’s even more shocking is that the local government rules permit and tacitly encourage these lobbying side gigs. The City of Westminster’s rules only require councillors to disclose any direct financial interest they have in a planning application they are considering. But these are disclosures that nobody ever reads and that are chummily tolerated in an environment where both sides are just as involved. Furthermore, the rules do almost nothing about the plum jobs landlords and lobbyists can hand out to councillors after they leave office, which the public might understandably perceive as a reward for loyalty or a way to keep current councillors friendly in the hope of future benefits.
Thus, Westminster Labour’s shadow chair of planning, David Boothroyd, moonlighted as the head of research for lobbyist Indigo Public Affairs, whose clients, he recognized, “are companies applying for planning permission from various local authorities” (although he claims he does not and would not work with clients in Westminster itself). Meanwhile, Labour’s shadow cabinet member for city management, Paul Dimoldenberg, worked as chairman of a PR firm that “helps build a positive dialogue between local communities and our clients with planning, regeneration and development proposals.” Or, put more prosaically, it helps developers lobby for planning permission.
And over in Haringey, former right-wing Labour leader Claire Kober unsuccessfully tried to force through a public-private development that activists called “social cleansing” of council estates. After grassroots campaigners forced her to resign from the council, she promptly joined the board of one of London’s largest landlords.
None of this is to accuse councillors of corruption, or even of breaking the council’s rule book. But sitting on planning bodies while working for property developers and lobbyists creates an inherent and irreconcilable conflict of interest. It destroys public confidence in the planning system, and any credibility Labour might have in pursuing the issue. Labour can never effectively make headway on corruption while its councillors have their own conflicts of interest, and raising the issue against the Tories only results in mutual assured destruction.
The only solution is to ban property developers and their lobbyists from local councils, and from holding office in local political parties. This is an answer that center-left parties around the world have supported. But while Labour councillors are paid by lobbyists and property developers, nothing will change. Local government will remain a cesspit of sleaze, just on a slightly less grand scale.