The London Plan, which explains how the capital will cope with a population growth of 10% in 15 years, is Ken Livingstone's big chance to make a difference. But, asks Martin Spring, can he overcome five fundamental barriers to making the vision a reality?
Last Friday, London mayor Ken Livingstone unveiled the most important policy document of his life. The London Plan, currently in draft form, provides the mayor with the climax of his political career – and the chance to set the agenda for the development of Europe's largest city for the next two decades.

The key challenge faced by Livingstone is how to handle the capital's rapidly increasing population. Half a century of demographic decline ended in 1989; after that, the population began to increase at a rate considerably higher than average UK growth. "London is expected to grow by the equivalent of the population of Leeds in the next decade and a half," writes Livingstone in his introduction. This amounts to an extra 700,000 city-dwellers by 2016 – a growth in population of 9.5%.

To cater for the thousands of expected newcomers, the 402-page plan sets out ambitious targets for providing jobs and homes.

  • 636,000 additional jobs – a 14% increase – are to be created in the capital by 2016.

  • 459,000 dwellings, costing £67bn, are to be built in the same period. This equates to 30,600 additional houses a year, which is below the 43,000 homes a year recommended by the mayor's housing commission last year.

  • The minimum figure of 23,000 is set as a "key performance measure". Even this figure will is wildly optimistic, as it demands an increase in housebuilding output of 44%.

    The draft plan makes a particular attempt to stem the exodus of London's army of key workers. These are the public sector staff required to keep the capital functioning – including teachers, nurses and transport workers – and who are increasingly finding themselves priced out of the city's property market. Here, the plan presents a further challenge for London's housebuilders – the mayor intends to double the rate of affordable houses being built to 10,000 a year. But again, this target is fewer than half the 25,700 extra affordable homes the Greater London Authority calculates are needed annually to master the capital's looming housing crisis.

    On top of these targets, the plan accepts the urban taskforce's conclusion that development should be concentrated on high-density brownfield sites within the green belt. To this rule it adds a string of sustainable policies, such as "world-class architecture and design", the recycling of building materials and the installation of renewable energy systems.

    There are acres of land for development, but they have negative value. Without new transport links, it just won’t happen

    Tony McBrearty, deputy chief executive, Thames Gateway Strategic Partnership

    But these ambitious promises will be far from easy to keep. There are at least five key impediments to the development of new jobs and homes in the capital that might just prove too much even for the indefatigable Livingstone.

  • Insufficient public investment London's marketing organisation, London First, has calculated that £100bn of capital investment in public services is needed to provide adequate transport, housing, and urban renewal. "However," the plan states, "London's share of identifiable public expenditure has been falling, despite the facts that its population is rising faster than the national average and that it has some of the most deprived areas in the country." Livingstone acknowledges this shortfall by demanding an extra housing grant of £150m a year – a rise of 44% – from the Housing Corporation.

  • Unachievable levels of affordable housing for private development sites Livingstone's controversial plans, requiring that private residential or mixed-use developments in 21 of London's 33 boroughs should contain 50% affordable housing, have been angrily rejected by housebuilders. "As a general rule, 20-25% is as much as can be tolerated," says House Builders Federation spokesman Pierre Williams. "If this is pushed up to 50%, it is likely to kill the goose that lays the golden eggs." St George, central London's most bullish private housebuilder, has recently abandoned a 600-dwelling project after the council demanded 35% affordable housing.

  • Insufficient transport links to unlock expansion zones The GLA puts its faith in the relatively empty spaces of the Thames Gateway from London Docklands eastwards to absorb 142,000 homes (30% of the total) and 249,000 new jobs (39%). But Tony McBrearty, deputy chief executive of the Thames Gateway London Partnership, argues: "There are acres and acres of land for development, but they have negative value at present. There are lots of development ideas, but without new transport links, they won't happen." The trouble is that the proposed transport links are a long way off – the Channel Tunnel Rail Link that will connect the area to the Stratford interchange is not due for completion until 2007 at the earliest, and the CrossRail link to the Isle of Dogs and central London will not be finished until 2011. Three proposed river crossings in east London are similarly long-term projects.

  • Under-resourced planning departments The increased development activity proposed by the draft plan depends on a growing rate of approvals by London's planning authorities. A key performance measure is to increase throughput threefold. Yet high-density developments on brownfield sites and negotiations over affordable housing on private sites are likely to protract the planning process – possibly by as much as nine months, according to Fairview Homes. Chris Morley, planning director of the British Property Federation, says: "Fewer developments are going through the system than at any time before. Planning departments need a 40% increase in funding and a 40% increase in skilled planners."

  • Construction skills shortage Increased construction will put additional pressure on London's drum-tight labour market. This in turn will inflate construction prices, with the effect that costs will rise while output declines.

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