The social costs and benefits of business activity- Paddington Basin Regeneration Project.

Employment

The building of the facilities mentioned above and the opening of retail shops and offices will create jobs for locals as well as people from other areas. An estimated 30,000 jobs will be created, most of which would naturally go to people residing in the area. A new recruitment centre is being opened in the developing area to train and recruit locals and school leavers in particular. This means that unemployment will drop and much of the burden on the council will be relieved, allowing them to direct their efforts to other needy aspects of society. This is a benefit to the whole community and all the stakeholders should benefit from the fact that the council may have more money to use elsewhere and the fact that employment is high will result in a prospers area.

So much money is being invested in to the scheme and this will put a lot of pressure on the authority and developers to produce evidence of the success of the project quickly. One way in which this evidence can be produced is by showing exactly how many jobs it’s created and how much it has helped to reduce unemployment in the area. The local council and developers will be working closely with the new and old businesses to ensure that maximum benefit is made to the local residents, students and people from outside the area.  

In a project like this, the short-term nature of the jobs is unavoidable, as builders will not be needed once the project is complete. However, there will be jobs for them for the five-year period and they will be on contract for the period that they are need. As well as creating these short-term jobs, the project will create more importantly – long-term jobs. One of the main aims of the developers and council will be to ensure that this project creates as many jobs as possible. In particular, they will be looking at long-term jobs for the people, as these will ensure the sustainability and the growth of the economy.

Health

The physical looks of the area should create a positive atmosphere in the area. This atmosphere should create a happy place of work and living for the people. Also, the building of health clubs will benefit the health of the residents, students and also the workers. The cleaning of the canal will mean that it is safer and more attractive which will benefit all the stakeholders. It will allow workers to have lunch with a better view and attract tourists.

The development of the Paddington Basin should lead to an increase in the health of the people. The building of hospitals and clinics will ensure that there is plenty of advice and treatment for the ill and the elderly. All these factors should lead to an improvement in the lives of the people.

Although the above-mentioned are long-term social benefits, there will however be short-term social costs. The building works will cause disturbance to all the stakeholders. Noise pollution and visual pollution will affect any one who comes in contact with the area; students, teachers, residents, workers and many more. Short-term costs are less likely to cause as much resistance as long-term costs. The reason for this is that because they are only short-term, they will only affect the stakeholders for a short period; in the case of Paddington Basin it will range from anything from a few weeks up to   a maximum of five years. Once the project is complete, these short-term costs will no longer exist and the stakeholders can get full benefit from the development.

Education and training

Although no new colleges or training schools are being opened by the project, existing ones will find benefit form the development.  A benefit that local institutions will be able to take advantage of straight away is work experience placement. Students can go and find places that will take them easily and schools can also liaison with the new business to make work placement easier and more efficient and benefiting to the students.

One social cost that will be very apparent is the closing down of NWCS, which is in the heart of Paddington. The school is old and refurbishing it to match any of the buildings that are being developed will take time and a lot of money. Therefore, the council has decided that it would sell the land (at an expensive price) and use the money to invest in another building nearby. The closure will cause a shot term disturbance to both the pupils and teachers. A new school will be built near by to replace the closed one. This will mean that some teachers and students will have to travel further and the moving of all pupils and staff may cause instability and may take a long time to get the new school back to the way the old one was functioning.

There are also social benefits of moving the school:

• school may be closer to the homes of some students and teachers, which will reduce travelling time

• new surrounding, pupils who couldn’t study due to the influence of the old area can have a fresh start

Transport

One of the advantages of the Paddington Basin is its tube station. It has direct tube links to all London mainline terminals. Paddington Basin stands adjacent to the A40 M (Westway), which connects directly with the M25 (just 7miles away), giving motorists access to the M4, M3 & M1. These are great incentives for investors as it means that they will be able to employ people from other areas as well as locals. It also means that their employees will have easy access to other parts of London where they may have other branches. Deliveries will be more efficient which is important to their company.

The development of the area will mean that more people will be using the local transport as well as their own. This means that improvements need to be made to the transport system in order to cope with the increasing demand. This is a social cost as it means that changes have to be made to current transport to cope with new demands created by the Paddington Basin Development which will cost a lot of money. If this money is invested and the demand isn’t met then anyone using the area will suffer greatly.

Railtrack is currently progressing Phase Two of its major station regeneration programme designed to create a Paddington Station of the 21st century. Proposals include the creation of additional platform capacity, improved passenger links to the underground buses and taxi services and a major new commercial and retail complex that, with a 42-storey tower, will act as a landmark for Paddington to rival the stature and significance of Canary Wharf and other major projects planned for central London. A planning application for Phase Two was submitted in June 2000. Award-winning work carried out by Railtrack on Phase One comprised a £65m facelift to the original 1850's Brunel structure to provide direct check-in and baggage handling facilities for Heathrow Express, an entirely new customer information system and the refurbishment of The Lawn concourse area to provide an additional 40,000 sq ft of shops, restaurants and bars.

From the example above it can be seen that there will be short-term costs. Improving the station will cause noise and visual pollution. However, the benefits of an improved station outweigh the short-term costs. Nevertheless, council and developers will need to ensure that disruptions are kept to a minimum.

The increase in people using the area will mean that extra busses and trains may be needed. Also, increase in cars and buses will also mean more traffic and pollution. Transport for London will need to look at these aspects of development along with the council and developers and come up with working solutions in order to combat overcrowding, congestion and pollution.

The increases in number of people will cause short-term problems for all the stakeholders. If the authorities don’t solve the problems or neglect them then the short-term costs may become long term, and this could upset many stakeholders and even cause pressure groups to form.

Environmental costs and benefits

The developers who are planning and implementing the development of this project are the key to the success and completion of a project on such a large scale. In this section I will be looking at what their role is and what compromise they are going to be making and what their motives are for such a big development.

Private costs and benefits are all the things that affect the developers in either positive or negative ways. Private costs are all the things which the developers will have to compromise on in order to successfully complete the project. These are hardships the developers will face and they will need to work hard and keep themselves motivated in order to go through with the whole project.

At some point early in their decision-making, the developers would have been weighing out the costs and benefits of the project. This would be a key point in the development as this point could be a turning point, where they may decide to drop the whole project, or more likely, a motivating point, where they out line the aims and objectives and begin their first steps in the development. Below I have listed a few of the costs and benefits that may have been mentioned in such meetings:

Costs

• Capital
• Buying land
• Seeking planning permission
• Compensation for anyone who has to be relocated elsewhere to make way for the development, e.g. NWCS
• Time
• Environmental damage
• Pressure groups

Benefits

• Profit
• Prestige
• Raise the GDP for the area
• Create jobs
• Experience
• Developing and improving the area

Benefits which are public are more likely to be accepted by stakeholders and the government as grounds to allow the development to take place. Therefore, it is in the interest of the developers to show the government and stakeholders as many social benefits as possible.  

A lot of time will be spent at initial stages, looking at environmental costs and benefits. The reason for this is that there are a lot of legislations governing development, especially at this scale. They will need to make sure that the damage they cause to the environment is minimal and is essential to their progress. The main reason for this is that if they start developing without any consideration then:

• They will be harming the environment
• The development won’t be a sustainable development
• Pressure groups will be formed or strengthened
• They may break laws and be subject to fines
• Attract bad media
• Lose public and private confidence

Environmental benefits

The environmental gains of this project are:

• Create a more developed and attractive place

One of the main aims of the regeneration project is to modernise the area and make it more attractive place for investors to spend their money on and a pleasant place for people to live in.

• Clean the area and the canal

Part of the development is to clean the derelict land and the abandoned canal

• Safer more lit up area

The area will be more lit up as the development will include putting in more street lamps.

Environmental costs

The environmental costs of this project are:

• Building tall buildings

Building tall buildings will harm the view of the area and stakeholders lining in the area will be opposed to skyscrapers on their door step. The developers have minimised the environmental impact of the development by re-designing the buildings.

• Producing dirt, dust and debris

To prevent dirt, dust and debris they should analyse the procedures that they will use when developing the area and make sure that all the workers follow the rules and regulations properly. They should also try their best to keep debris and dirt to a minimum and get them removed from the site as soon as they are created. A combination of both these ideas will lower the chance of environmental damage.  

• Increase congestion

More cars and busses will be using the area as a direct result of improving the area and this will mean more pollution in the area. To minimise the effects of increased congestion the developers and the local authority will need to monitor the amount of pollution being created during the development (including machines used for construction) and after the development (concentrating on the increase of congestion created by new traffic). They will need to find ways of reducing the pollution (e.g. reducing the amount of cars coming into the area) without jeopardising the sustainability of the development. One such plan for the centre of London is being carried out by the Mayor of London, Ken Livingston who is reducing the amount of cars using the area and improving public transport.

• Cutting down of trees

For the development to take place trees will need to be cut down as they are obstacles to the development. To minimise the damage to the environment should replace the trees lost and also grow more trees to compensate. They should also include in their project as much green space as possible.

There are many ways in which the developers can minimise the environmental impact of the development. The main way to reduce harm is to properly analyse how each part of the development will affect the environment and try to avoid it at all costs. Another important way is to make public all the steps of the development so that positive criticism can be made and things not thought of may be suggested.

Practical ways to reduce harm is to try and adopt methods of development which cause less harm to the environment.

Proper planning and designing by qualified and experienced people will mean that they can minimise damage to the environment. Their experience may also help them to find alternatives which is less risky to the environment and will cause fewer disturbances.

Pressure Groups and local community protest groups

The environmental and non-profit making objectives of a business are usually driven by pressure groups which represent public opinion about issues such as environment. Greenpeace, for example, protested when Shell Oil planned to sink old oil platform, which may have polluted the Atlantic. The public boycotted Shell petrol stations until the company changed its mind.

It can be seen from the above incident that pressure groups can have influence and say in how a business operates. Although individuals may be opposed to the development, they have very little say and will not be taken into account unless they can form groups with other people holding the same ideas. Even then their argument may not have much influence on the project. In the case of PBRP there have been no pressure groups as such. One of the reasons for the absence may be due to the fact that the community appreciates the council’s and developer’s efforts to improve the area and have found no faults in their planning and development.

If there were pressure groups then these may be formed by the stakeholders. This might mean that teachers, students, local residents and business come together in a bid to get their views heard and implemented. All these people would have the same ideology and would join forces to over come their opponents. They would take their case to the local authority and developers and if no comprise was made to ensure that they were happy then they may wish to protest and like the case above, they may try and force their ideas on to the authority and developers. If however, after the protests they were to no avail then they may wish to take court actions against the authority and developers. This is usually a last resort due to high costs of bring cases to the court.

The scale at which damage is being done to the environment usually determines the number of pressure groups active. If the developers of the project were to decide that they needed to cut down hundreds of trees in order make way for development than this would certainly cause uproar and pressure groups would start campaigning. If the removal of one tree were needed, than this would be acceptable due to the benefits of the development. In the case of PBRP, trees and plants are actually being planted all over the area to reduce pollution and benefit the community and the environment at large.

These groups may be formed for one of two reasons.

• Firstly, they may be against short-term problems, such as cutting down trees in order to raise a building.

• The second reason may be due to long-term problems, for example how rubbish will be disposed of from the area. This is something that will need to be done during and beyond development and the problem will be a long term.

The absence of any pressure groups or resistance is a sign that the developers are taking careful consideration of any thing that may upset the stakeholders. In this project if there were to be any resistance than I think these would come about as a result of noise, pollution or the moving of NWCS.

One main group of people who could become a pressure group are the staff and pupils of North Westminster Community School. They would put pressure on the developers and council and try and stop the closing down of the school. They would need to come up with all the costs the school has to face as a direct result of the development and suggest ways to avoid them. For the school to be taken seriously they would need to have representatives of their pressure group who their developers and council can arrange to talk. Unless the school does anything major or has many followers, they probably won’t make much change to the plans.

However, I think in this particular case the stakeholders have remained silent due to the fact that the developers have tried their best to include all the stakeholders in their development and haven’t transgressed any boundaries. This means that they have more support form the stakeholders and this will give them the motivation to carry on and complete the project as soon as possible.

It is the duty of the authorities; developers and those in charge to make sure those problems that arise are dealt with in the best manner so that all the stakeholders and shareholders are happy. Achieving this will reduce the chance of pressure groups forming and the project will have full backing form stakeholder and shareholders.

Environmental legislation

Every development needs the permission of the government. Some development will work closely with the government, e.g. building a hospital, while others will only require basic guidance, building a private house.

The development of Paddington Basin will affect every person and business in the area so each step needs the approval of the government. This is a public development and there are certain rules and regulations which will affect the development, prior, during and after its development. There are two types of legislation that will affect the development:

• Building legislation

• Environmental legislation

Below are just a few of the legislation that will have a big impact on the development:

Planning Protection Act

The act means that any business or development, which is to take place, must receive permission from the local authority before any development takes place, otherwise they will be held for prosecution. The impact this legislation will have is that once initial permission is given for the development, any changes will need to be granted further permission and it may take some time to get the permission, which could delay development and set it off target. The implementation of this act is clearly present in the early stages of the development as developers had to redesign the buildings because the authority from whom they needed to get permission before any work takes place rejected the initials which consisted of tall buildings. Re-designing the buildings would mean that there would be less space to rent out meaning that they would make less money but this is a constraint that they must obey and work around otherwise it would mean scrap the project. This type of communication would take place until both the authorities and developers come to an agreed development and any changes to that agreed plan would need to be agreed upon before further work takes place.  

Environmental Protection Act 1990

This act states that any pollution that is emitted in the form of liquid, gas or solid must not cause a risk to the health and safety of any body in the area. This means that the developers will need to make sure that only qualified people, who know the relevant dangers, handle pollution and waste. This will ensure the safety and health of the public.

Water Resources Act 1991

This act is to ensure that water is not polluted or contaminated by the development-taking place. In the case of the Paddington development this means that the canal must not be polluted or contaminated and that the water is not affected in any negative ways. This is important especially at the early stages of development, as there will be a lot of rubbish clearance and debris will spread all over the place if not properly controlled.

Clean Air Act 1993

This act is in place to protect the air from pollution on a large scale. This act means that no chemical can be used near residential homes where it will directly affect the surrounding people and animals. The act also limits the amount of fuel that can be used throughout the development. The developers will need to abide by the act and evaluate the consequences of using chemicals for the development and where necessary take extra precaution to protect the environment and the people.

To ensure that that the laws are being up held and that the development is not having any negative impacts on the environment, the environmental agency (a government organisation set up to monitor the environment) will keep a close eye on the development and regularly visit the site.

The European Union also plays and in important part in maintaining the environment. The United Nations 1992 Conference on Environment and Development in Rio de Janeiro, Brazil, put forward agenda 21 – a global plan for sustainable development. The European Union drew up its fifth environmental programme for the period 1992-2000 based upon this.

The EU programme focuses on five main areas that can damage the environment.

• Industry
• Transport Pollution
• Energy (Carbon dioxide emission)
• Agriculture and forestry
• Tourism

The EU has aims and plans to make sure that none of the above destroys the environment and this means that the developers of the project need to make sure that they don’t transgress the limits set by the environment agency or the EU.

Government Regional Policy

Governments often intervene to encourage economic development in areas where the level of economic activity is below other areas. Methods for achieving this include:

1. Government investment in the infrastructure of an area.
2. Providing financial incentives
3. Using legislation to prevent economic development outside of the designated development area 

The first method is to invest in the infrastructure of an area. For example providing a new motorway link or to bring electricity and water to the area. If an area has all the basic facilities then companies are more likely to invest in the area. Transport links are very important to a company and the government will try and meet all the demands in order to attract business. An example of such incentive can be seen in the UK. The building of the highest motorway in the UK (450m) in the 1970s, the M62 corridor, links many great cities such as Liverpool, Manchester and Leeds.

The government is investing in the Paddington Basin by not providing basic needs such as water (as they already have these), but trying to raise the standards of the area. The government is hoping that by modernising the area will attract more investors and business and this demand will make the project sustainable.  

The second method is to provide financial incentives in the form of grants or reduced levels of taxation. A very famous example is that of the London Docklands. The decline of the older heavy industries left the docklands to waste and soon became derelict land (a bit like Paddington). By 1970, London Docklands had come to be recognised as the largest redevelopment opportunity in Europe. Much money was spent on redeveloping the area and one of the ways in which the government introduced business to the area was by means of grants and reduced levels of taxations for a set period. The programme was successful in terms of business but wasn’t really aimed at helping residents and so it didn’t benefit them much.

I haven’t seen any financial incentives being provided by the government to persuade new business to set up in the area. I think this may be because it isn’t needed in this case as the area already has many positive aspects to draw investors, such as the transport links.

 The third way is to use laws to prevent economic development outside the designated development area which would mean that all development will take place in the area which would lead to further development in the area and a multiplier effect would be seen.

Although the intervention of the government is welcomed by locals in an area, the people living in the London Docklands were not very happy with the development programme. The developers took very little consideration of the locals and hence, they created an area with tall office blocks, expensive housing and an area which turns into a ghost land on the weekends. There is no social spirit in the area as it is all commercial. The economy of the Docklands benefited form the development, and not the people.

The developers are trying to keep a balance so that they don’t fail in providing for the local community. This is evident due to the building of facilities such as the hospital and medical centre. I don’t think the council have introduced anything new to stop economic development outside the area. The reason for this that they probably don’t want to put off any investors by putting restrictions yet. Any investment in the area would be seen as a good thing.

Public Meeting      

A public meeting was held with representatives from all the stake holders in a hope that they would suggest improvements. The meeting was successful and many different views were given.

Many changes were suggested by the various stakeholders. I will list the changes suggested by each of the stakeholders and explain the impact these changes would mean to the developers.

School:

The representatives suggested that instead of closing down the school, the school should be modernised to fit the development. This would mean the redecoration of the whole school, inside and outside, which would be costly to the developers and their overall deadline may have to be extended, which could have negative effects to the rest of the development. If the school wasn’t closed down then this would mean that shops which rely on school students as their main customers wouldn’t be forced to move, close or change.

Local Residents:

The main concern made by the local residents was the lack of affordable housing that is being developed in the Basin. They want to see the developers building more affordable housing. There is only limited space in the Paddington Basin. Increasing the amount of land an aspect of the development takes will mean denying another aspect of the development enough space. This would mean that more affordable housing will need to replace more expensive housing. The impact this would have is that the money generated by the sales of the houses in total would be less than before. This may not be feasible for the development because this may be one of the ways in which capital is being raised for the development. Stakeholders may argue that if such houses had to be built for the sustainability of the project and to raise such high capital then maybe the project should have been redesigned with the locals in mind.

Local Business:

The representatives from business in the area were concerned about the fact that retail stores were going to open up which may dominate the market in the area and steal their customers. They would like to see the developers help existing business in the area improve and help private individuals set up business by providing them with affordable premises. They could help existing business by setting up a local advice centre for businesses to get expert advice on expanding and improving their business. This would help the businesses in the area to improve and expand which would have positive impacts on the area such as more people being employed by the business.

The whole idea of the development project was to increase the financial state of the area and this can only be done through more business and the developers would find it easier to attract large companies and let them create the revenue rather then trying to help small local business improve.

Local Council:

The council expressed concerns regarding the involvement of the local residents in the project. They would like to see more input from the locals. They suggested that the development could have consisted of a big football pitch. This they say would make local youths happy and would allow local business to sponsor competition and maybe even a local football team.

The developers argued that a football pitch would take a lot of space and that it may not always be used. Sponsoring from business would be hard to get and that the costs of maintaining the pitch would put a burden on the council.  

Environmental Improvements

The environmental improvements suggested by the stakeholders were all very similar. Firstly they all complained about the noise and pollution caused by the building works and heavy machinery. With any development there will always be short term noise and pollution. The developers are trying to keep these to a minimum and they are following building laws which restrict them from working at specific times. These short term disturbances are a necessity and the stakeholders need to appreciate this in order to reap the benefit of this development. The improvements suggested by the stakeholders are appropriate as they are concerns which the developers them selves will have discussed and planned for. The developers however, may have chosen methods and equipments which are cheaper and quicker by overlooking the noise and pollution that they will create. The developers can satisfy the concerns of the stakeholders by:

• Limit the hours work is carried out by having more men working at the same time
• Favour machinery that create less noise and pollution
• Put priority over reducing noise and pollution over costs

A very controversial issue which the developers have had to face is the cutting down of trees. The developers are cutting down minimum numbers of trees and they are replacing them with new trees which they are planting as part of the project. The stakeholders have also suggested that parks should be incorporated in the development, and that the development should be greener. The developers should consult the local environment agency and organisations such as Green Peace to get their views and recommendations which will reduce the chance of opposition. They should get their support and use it to persuade the stakeholders. The developers should make use of every singe space and try and use as much of the area for trees and green space such as parks.  

Visual aspects of the area are very important, especially to people who are required to interact with it on a daily basis. The local residents in particular are not too keen on having giant skyscrapers on their doorsteps. In an area where all the buildings are low it looks out of place to have buildings sticking out. The developers could look at building lower buildings, but this could be inappropriate due to availability of land. However, if land was the constraint then they could look at extending the area for development. Extending the development may not be the best option as it will require greater funds and time. The improvement suggested is most likely to be ignored as the buildings were already re-designed after being rejected by the local authority. Their latest plans have been approved and a lot of opposition would be needed change them again.  

As we have mentioned earlier the costs of this project to NWCS out-weighs the benefits. One possible way that the developers could compensate is to build some sort of area (maybe a big pond) where students can come and carry out science studies. A project like that would benefit both students and other stakeholders who want a greener environment. Doing some thing like this has the potential of easing pressure from one (if not many) pressure groups.

Recommendations

I believe that the proposed development is sustainable. I think that it will improve the lives of the locals and bring the economy to its peak. Although my investigation has unearthed some negative aspects of developing an area like this, nevertheless the overall outcome of this project looks very encouraging.

The project is benefiting all the stakeholders socially as it includes facilities such a s bars, restaurants and shopping complexes. It will make the area more attractive to work and live in. Pleasing the maximum number of stakeholders is clearly one the developer’s aims as it will mean that the project will have a greater chance of being sustainable and successful. The complexes and facilities being built will be used by the majority of the stakeholders so they need to like them and be happy with them, otherwise they won’t use them ands they won’t be sustainable.

Although no pressure groups have been actively involved in the development of the project, it did face some problems as initial designs of the buildings were too tall. This would have shown a lack of understanding from the developers towards the stakeholders and the environment but they agreed to a step back and re-design the buildings to a lower height to accommodate the stakeholders’ views. This shows that the developers are willing to listen to the stakeholders and take into account the authority. If the developers are willing to change things to meet the criteria than this means that they are serious about getting it right first time. This type of consideration is recommended.

In terms of employment the project is highly desirable, as it will create an estimated 30,000 jobs. This will ease the pressure on the local authority to reduce the high unemployment rate and will mean that the locals will have more money to spend which will see the area getting richer and developing economically. The views of the local businesses are very important to this project as it will directly affect them negatively. They will need to compete with the big chains that will be bought in by the development. In my view I think that the local businesses should have been compensated. The stakeholders will see improvements in the products and services of the local businesses as they will need to improve to compete. This means that customers will be positively affected by the negative increase in competition for the local businesses.  

The development will be helping to improve the health of the people as it includes expanding hospitals and building new medical centres. Everybody will welcome this making the project desirable. Even those people who hold reservations towards the development will benefit from the development as it includes cleaning up the local dirty canal and planting trees. These activities will clean the air and will benefit even those people who aren’t benefiting from the hospital expansion and medical centre.

In terms of education and training I think that this development is not doing too good because of the closure of NWCS. However, they are benefiting from the expensive sale of the school and will be opening a new one near by. No pressure group has been formed by the school which is a good sign showing that even people who should be opposing the development have good reasons to compromise with it.

The development will have a negative impact on the transport unless they create extra services for the increased number of people using the area. The Mayor of London, Ken Livingston is currently tackling the problem of congestion in central London which will help control the traffic problem that may be created by the Paddington basin development,

This development is looking to create 30,000 extra jobs for the area, develop the environment, clean the canal and bring a whole load of entertainment and sports facilities to the area as well has many new shops and business. Projects such as this are very desirable for the local government and for the public, especially when they are taking derelict run down areas of a city and developing them to a desirable place where people want to like and work.

I would support this development and recommend it, I as conclude at the end of this detailed report the findings that this regeneration project will out weigh all the costs, bringing short term and long term benefits to the area and all the stakeholders who have a stake in a major project such as this.