Is Sadiq Khan pinning his legacy hopes on Oxford Street?

Ahead of the Budget, there is speculation about what investment London can expect.

It is possible plans to pedestrianise Oxford Street will be given a boost of some kind.

The mayor has said he intends to push this project through with a rarely-used power to create a mayoral development corporation (MDC). What exactly could that mean?

The key thing about an MDC is that the mayor appoints its board and it will usurp the planning powers of the local authorities – mainly Westminster, but also potentially Camden.

It is a big lever to pull because you need to be sure the gain will be worth the pain of disempowering local people.

Millie Mitchell, from the Institute for Government, said: “It allows a mayor to pursue core missions, and make strategic decisions in the interests of London as a whole.”

Labour councillors in Westminster did not. It came out of the blue.

And given there has previously been some opposition to the plans, it could cost them control of the council in local elections in 2026.

Sadiq Khan’s manifesto for a third term offered a hint – with a pledge to create more MDCs.

But few pundits noticed; more preoccupied with his record on knife crime, housing and the Ultra Low Emission Zone. There do not appear to be plans for more MDCs.

Khan’s original attempt in 2017 was dropped after considerable pushback from the then Tory-controlled council.

He has always had the power to create an MDC but did not stomach an attempt under a Tory government.

He now says he has the support of the Prime Minister Sir Keir Starmer and his deputy Angela Rayner.

City Hall says there is a more pressing need because of the impact of the Covid pandemic, competition from online retailers and out-of-town shopping centres.

No-one at City Hall is saying much, but it does not look as if it can happen quickly and so there may not be much to see before Khan is expected to stand down at the end of this third term in 2028.

It is not clear how much preparatory work has been done.

Another big question is where the exact boundaries – redlines – will be drawn beyond Oxford Street.

There now needs to be a consultation including with the local councils, MPs, businesses and residents.

The MDC then has to be formally approved by the London Assembly. After that, detailed plans will be needed, and further consultation on the design and impact of the scheme itself.

There are two in London. The original is the London Legacy Development Corporation (LLDC), which was set up to leave a lasting impact in east London after the London Olympics in 2012.

In short, it had almost £10bn to play with, which hardly makes it comparable.

About 1,200 new homes have been built in 12 years and a cluster of top cultural, academic and sporting institutions are being created in the Olympic Park.

The LLDC is soon to return planning powers to the neighbouring boroughs of Newham, Tower Hamlets, Hackney and Waltham Forest.

The other is called the Old Oak and Park Royal Development Corporation (ODPC), which was set up to capture the benefits of the new Old Oak Common Station near Acton in west London, where the Elizabeth Line and High Speed 2 rail link will intersect.

It covers a big swathe of industrial land covering unloved bits of three boroughs, Ealing, Hammersmith and Brent. Its results so far have been modest.

In nine years, about 4,600 homes have been built.

Several years were spent drawing up ill-fated plans to build on the site of the secondhand car dealership Car Giant.

However, the ODPC may now be getting its act together, buying up a lot more land with a master plan due soon for the area – and ending the uncertainty around HS2 should help reassure potential investors.

City Hall is estimating around £150m, including from local businesses and private funders.

Who knows how much could be swallowed up dealing with legal and planning challenges though?

There is no word on any public money yet.

Deputy Prime Minister Angela Rayner specifically avoided talk of funding in her original statement backing the plan, but there is speculation there may be some new financial freedoms allowing the mayor to raise money in the zone.

Some worry that Oxford Street pedestrianisation may be presented as a big prize, at the expense of more substantial infrastructure projects like a new north-south ‘Crossrail 2’, or extending the Bakerloo Line and the Docklands Light Railway.

Westminster Council has already demanded assurances from the mayor that local residents will be represented on the board of the Oxford Street MDC.

Amanda Souter represented the Old Oak Neighbourhood Forum on the ODPC, but was removed after three years, and claimed: “When Sadiq Khan took me off the board, I think everyone was really angry because the relationship with the local community broke down.”

Ms Souter added: “It was a successful model and we met regularly. It really did infuriate local people because after that there was no real engagement with us locally.

“The board became entirely distant and lacking transparency.”

The ODPC disputes this, insisting that local appointees have been maintained on the board and it has a positive relationship with the local community which will only improve now clearer plans are taking shape.

If MDCs are the new thing, then what chance is there that one could be created nearby at Euston – to oversee the new HS2 terminal and wider regeneration?

There are signs here that there would be local resistance to the mayor taking charge on this one.

Camden Council told BBC London: “We are ready to lead a development that brings affordable homes and job opportunities for residents, whilst also delivering for the country as a whole.

“We don’t simply want a seat at the table, we want the power to lead and be a central player in a partnership that can make this vision a reality.”

And they have friends in the right places – Sir Keir Starmer is a local MP, and former Camden leader Georgia Gould is now driving new thinking in the Cabinet Office after she was appointed as a parliamentary secretary.