Is Osborne about to abolish the culture department?

Speculation grows that the Department for Culture, Media and Sport could be abolished in the Spending Review, with its functions hived off to other departments.

When George Osborne announced the seven government departments that had agreed "in principle" to cuts of up to 10 per cent in next month's Spending Review, the Department for Culture, Media and Sport (DCMS) was a notable absence. Notable because the department is not one of those ring-fenced from cuts, nor is Culture Secretary Maria Miller one of the cabinet militants (dubbed the "National Union of Ministers") bidding to blunt Osborne's axe. But an answer to this conundrum could be at hand: the DCMS may not exist at all after the review. 

Shadow culture minister Dan Jarvis tweeted last night that "well placed sources in Whitehall" suggested that "#CSR13 may scrap @DCMS - with Culture, Media & Sport going to other Govt depts". When I spoke to Jarvis this morning he told me that while he was "not convinced" that significant savings could be made by scrapping the department, "the government could go down this road to demonstrate that it is 'leading by example' in these tough times and has found way in which 'to do things more efficiently'." 

Rumours that the DCMS could be abolished first began last year, after an Institute of Economic Affairs report suggested that the move would save £1.6bn a year, but it was abandoned after a campaign by Labour and cabinet resistance from the Lib Dems. Now, with Osborne attempting to identify £11.5bn of cuts for 2015-16 (he's currently £9bn short), the option appears to be back on the table. 

As in 2012, Labour has pledged to oppose the move, with Jarvis warning that it would be "driven by short-term expediency, rather than the desire to plan for the long-term". He told me: "Abolishing the department wouldn't be in the long-term interests of sports, or the arts, or the constituent parts of the culture brief. With the importance that they represent to people's daily lives, they deserve that focal point that sits at cabinet." He added: "the DCMS brief, based on its economic contribution alone, well deserves its own department." 

But a DCMS source told me there was "absolutely no truth in these rumours". The source said:

Unsurprisingly, Dan Jarvis doesn’t know what he’s talking about. There is absolutely no truth in these rumours. In Leveson and Equal Marriage, DCMS is responsible for two of the government’s most politically complex policies, alongside delivering one of the government’s largest infrastructure projects - Broadband. The department’s responsibilities continue to expand and its role is more central than ever before.

We'll find out who's right when Osborne's big day arrives in less than a month (26 June). 

Secretary of State for Culture, Media and Sport Maria Miller. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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The tale of Battersea power station shows how affordable housing is lost

Initially, the developers promised 636 affordable homes. Now, they have reduced the number to 386. 

It’s the most predictable trick in the big book of property development. A developer signs an agreement with a local council promising to provide a barely acceptable level of barely affordable housing, then slashes these commitments at the first, second and third signs of trouble. It’s happened all over the country, from Hastings to Cumbria. But it happens most often in London, and most recently of all at Battersea power station, the Thames landmark and long-time London ruin which I wrote about in my 2016 book, Up In Smoke: The Failed Dreams of Battersea Power Station. For decades, the power station was one of London’s most popular buildings but now it represents some of the most depressing aspects of the capital’s attempts at regeneration. Almost in shame, the building itself has started to disappear from view behind a curtain of ugly gold-and-glass apartments aimed squarely at the international rich. The Battersea power station development is costing around £9bn. There will be around 4,200 flats, an office for Apple and a new Tube station. But only 386 of the new flats will be considered affordable

What makes the Battersea power station development worse is the developer’s argument for why there are so few affordable homes, which runs something like this. The bottom is falling out of the luxury homes market because too many are being built, which means developers can no longer afford to build the sort of homes that people actually want. It’s yet another sign of the failure of the housing market to provide what is most needed. But it also highlights the delusion of politicians who still seem to believe that property developers are going to provide the answers to one of the most pressing problems in politics.

A Malaysian consortium acquired the power station in 2012 and initially promised to build 517 affordable units, which then rose to 636. This was pretty meagre, but with four developers having already failed to develop the site, it was enough to satisfy Wandsworth council. By the time I wrote Up In Smoke, this had been reduced back to 565 units – around 15 per cent of the total number of new flats. Now the developers want to build only 386 affordable homes – around 9 per cent of the final residential offering, which includes expensive flats bought by the likes of Sting and Bear Grylls. 

The developers say this is because of escalating costs and the technical challenges of restoring the power station – but it’s also the case that the entire Nine Elms area between Battersea and Vauxhall is experiencing a glut of similar property, which is driving down prices. They want to focus instead on paying for the new Northern Line extension that joins the power station to Kennington. The slashing of affordable housing can be done without need for a new planning application or public consultation by using a “deed of variation”. It also means Mayor Sadiq Khan can’t do much more than write to Wandsworth urging the council to reject the new scheme. There’s little chance of that. Conservative Wandsworth has been committed to a developer-led solution to the power station for three decades and in that time has perfected the art of rolling over, despite several excruciating, and occasionally hilarious, disappointments.

The Battersea power station situation also highlights the sophistry developers will use to excuse any decision. When I interviewed Rob Tincknell, the developer’s chief executive, in 2014, he boasted it was the developer’s commitment to paying for the Northern Line extension (NLE) that was allowing the already limited amount of affordable housing to be built in the first place. Without the NLE, he insisted, they would never be able to build this number of affordable units. “The important point to note is that the NLE project allows the development density in the district of Nine Elms to nearly double,” he said. “Therefore, without the NLE the density at Battersea would be about half and even if there was a higher level of affordable, say 30 per cent, it would be a percentage of a lower figure and therefore the city wouldn’t get any more affordable than they do now.”

Now the argument is reversed. Because the developer has to pay for the transport infrastructure, they can’t afford to build as much affordable housing. Smart hey?

It’s not entirely hopeless. Wandsworth may yet reject the plan, while the developers say they hope to restore the missing 250 units at the end of the build.

But I wouldn’t hold your breath.

This is a version of a blog post which originally appeared here.

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