Hedge Fund Owned London City Airport Make More Unbalanced Claims

Since the the 18th November we keep hearing about a report that the City of London Corporation have paid York Aviation to carry out. Interestingly, the media have referred to it on various occasions since, but low and behold, none of them had seen the report when we questioned them. So all the spin and claims were without any reference to evidence for the past few months.

Today we see more over exaggerated claims from the airport about their self claimed contribution to London.

"As well as direct economic benefits, it has also levered investment in public transport, in particular the DLR extension to Woolwich Arsenal"

Really, they invested so much in the DLR? Transport from London and the Transport Select Committee didn't seem to think their contribution was so great as we wrote in a blog item in November 2008:

At the Select Committee on Transport 9 May 2007, yet again it appears that London City Airport c/o Richard Gooding has been shirking it full financial responsiblities. The moths must really build up in LCAs gold coin purse. Before reading the following, keep in mind that LCA consistently tells residents in Newham that LCA is responsible for the regeneration, particularly in the Royal Docks. They have indeed even claimed that it was down to them that the DLR came to town, always inferring that they have invested so much finance into the area and into the DLR - seems they didn't invest as much as they'd like you to think:

Q595 Chairman: How do you think dedicated services ought to be funded from airports as public transport?

Mr de Cani: The DLR extension has been funded primarily through Transport for London so it is publicly funded. However, there are small contributions through planning gain agreements, section 106 agreements. London City Airport has made a small contribution to the extension of the order of about £2 million. That compares to a capital cost of about 140 million. We would have liked it if they had made a bigger contribution and we tried to do that but the railway is serving a whole range of other objectives and contributing to the regeneration of east London so this extension was not just about the airport. We think they got a good deal.

Chairman: I am sure they did.

So they 'levered' in £2 million out of £140 million towards the DLR. So that adds up to just over a 1.4% contribution, the rest picked up by....surprise, surprise the London taxpayer! Still, going on how difficult it is to get money out of London City Airport (see reference to security costs) then we can imagine it really did have to be 'levered'.

As for LCY being the main regenerator of the area, it is arguably Exel that is the driving force bringing in £1.6b annually (just a little more than the claimed £500m by the airport!), without the noise and air pollution and whom have won awards for their wormery. The best you'll get for 'green initiatives' at LCY, is a photo of a paper shredder, as proudly displayed in their application for expansion.

Richard Gooding was quoted as saying: “Whilst we have to do everything we possibly can to mitigate environmental impacts, we run into the trap of ignoring the benefits,”

Well there's one thing that London City Airport haven't done and that's ignore the benefits, the business welfare benefits on offer to them: particularly those from the London tax payers purse through all the millions of pounds of subsidies from the London Development Agency. But don't forget the £5.5m+ a year security bill which they simply refuse to pay because they think you, the London tax payer, should pay it for them. Yes, the London tax payer is paying for a private hedge fund owned airport!

So when your council cuts your services, closes down your libraries, reduces your policing due to the economic environment at the moment: question whether London City Airport are being told to sling their hook and pay their own £5.5 million security bill, repay the £24 million security costs they've had over the past 5 years or so, and repay all the tax payer funded monies they have been given by the LDA over it's lifetime? Apparently we're all in this together, aren't we? So if your communities funding is being cut, why would tax payers money continue to be given to a privately owned airport?

Richard Gooding is correct in referring to an 'unbalance': there is clearly a very big imbalance between the amount of London taxpayers money which has funded the airport and how little is given back to Londoners. It's ironic and strange, for an airport that claims it is 'integral' and a key source of regeneration that after 25 years that Newham is still one of the most socially deprived boroughs in the country.

It must have been really helpful for that lowest tax band increase on the lowest earners to help subsidise private businesses like London City Airport. Never mind where the money comes from or at what cost eh?

Regeneration sinks around London City Airport

London City Airport keeps saying they are good for the local economy and that it attracts investment into the area. Perhaps they can take credit for the failure of the £1.5bn Silvertown Quays regeneration. Europe's largest Aquarium project (Biota!) is sinking! It has been given a 90 day notice by the London Development Agency.

Newham Council has approved expansion even though the brand new Building 1000 remained empty for 5 years, failing to attract a single corporate client. In the end Newham Council bought this building at cost of £100m (or so). And another 3 similar buildings were never built! So in all the airport allegedly appears to have cost £400m for the Royal Docks business park plus £1.5bn for Silvertown Quays.

The following is from the Evening Standard, but some other media sources are being more optimistic saying that Silvertown Quay Ltd would find an investor within the deadline. But the project has been dithering since 2002.... It they could not get off the ground during the boom, can they succeed during such a time?

Just how much say did Mayor Boris Johnson have in this?

Evening Standard Item:

Plans for a £1.5 billion development in east London which was set to include Europe's largest aquarium were in tatters today after the owners of the site pulled the plug on the deal.

The scheme for the land adjacent to London City Airport was meant to feature a sandy beach as well as 5,000 homes. But landowner London Development Agency has withdrawn from an agreement with its partners, the Silvertown Quays consortium, after the plans failed to progress in seven years.

Planning permission was given for the 68-acre site in April 2007 but the scheme, designed by

Sir Terry Farrell, fell victim to the property slump.

Contributed by a Newham resident.

Why are Londoners paying £7m (100%) of LCA's Security Costs?

Well it's a mystery to us how any private, share owned business could get away with NOT paying their own security costs and then having the cheek to pass these on to the communities that they operate in!

London City Airport costs us London tax payers a whopping £7 million for it's annual security, and surprise, surprise it doesn't want to pay a penny towards it.

Now we are clearly very concerned about the security and the safety of it's travelling passengers and of the communities around the airport - but should Londoners be expected to pay this whilst LCA pass the profits on to their share holders: Credit Suisse, GE and AIG? And we are not alone in our amazement at LCA's complete lack of willingness to shoulder even a percentage of their security costs........at the GLA the following question was asked by Len Duval, Chair of the Metropolitan Police Authority:

Question number 0043/2007 Meeting date 10/10/2007

Question by Len Duvall I am not asking you to comment on the planning application; it is more about the commercial engagement with London City Airport . Are you aware that London City Airport provides no cost towards the security of its perimeters and, in a sense, that we and part of the GLA family are subsidising them? Before you enter into commercial agreements with London City Airport or give any undertaking that security, the primacy of security around our airports and users of airports comes first and therefore that they should not be subsidised by London taxpayers, they should make a contribution like other airports; even Heathrow are cooperating in that. There seems to be a real problem with London City Airport ; they do not seem to want to even engage in a conversation about costs and they are quite adamant they are not going to pay it. Do you see that as being a part of a discussion that you may wish to have to them before you exercise any commercial deal?

Answer by Manny Lewis, LDA Given that you have raised it, Len , absolutely, in terms of the Metropolitan Police Service position. I am not familiar with those security issues; you have alerted us to those. We need to follow those up both with the Metropolitan Police Service as well as with TfL and we will certainly now factor that in.

Say's it all about LCA really. We should add that Fight the Flights has asked LCA if they intend to contribute to the cost of security, or even pay for it in full in respect of their planned expansion, which will clearly increase the £7m bill as more security will be required. We are still waiting for a response.

Now what was LCA's Chief Exec Richard Gooding saying about how much LCA give to the community?? It seems that they take out far more than they put in.

Funds for dealing with crime are always short - perhaps this £7m would be better spent on the crime that's affecting London communities right now - youth crime . We are sure that the Metropolitan Police Service would be more than pleased to get £7m back for services provided to a profit making, private business so as to enable them to tackle the difficult job of policing London.

If there are any businesses out there who don't get £7m security a year and feel discriminated against then please send requests for tips on how to get such brilliant perks to:


well, you know who....