Category Archives: Professional

Professional Blogs

20130624_Localism like terrorism?

How strange it is when a group of professionals give their time and expertise to (help Councillors) hold the Council’s officers to account and are likened by a senior Councillor – in the Council chamber – to IRA terrorists?

Professional people who give something back to their communities on a pro bono basis, and who even incur costs to do so, are precisely what Big Society is about. It does, however, require elected politicians to be brave enough to listen to these professionals alongside the advice of the Council’s officers and take the time to satisfy themselves that they understand the differing views and that they can make an objective decision.

Unfortunately, in Guildford, the officers still seem to hold sway and the Councillors are too fearful of knowledgeable challenge.

They have allowed the officers to bring forward a Statement of Community Involvement where amendments have not been out for consultation and, still further, have adopted it with an amendment that allows a Councillor and the Senior Planning Officer to change it without even having to go back to committee – how ironic is that?

Guildford Vision Group has pooled decades of development experience across the country and internationally to help bring about a once-in-a-generation replanning of Guildford including ambitious infrastructure proposals. This requires an independent professional masterplanning exercise but Guildford’s officers (and consequently it’s councillors) have set themselves four square against a Town-wide strategic plan.

Repeatedly calling for such a plan and highlighting the risks of not having one is apparently a campaign equivalent to terrorism. This cannot be right or rational, and is inherently bad for both democracy and town planning in Guildford.

20121106 A Bleak Day for Planning in Guildford

Guildford’s planners and planning committee last night signalled that it is open season in Guildford.

Far from giving Guildford the helping hand it needed to embark on a new strategic plan for the town, dealing with traffic chaos, the legacy of undeveloped sites in prime areas of the town and a chronic housing shortage, Guildford’s planning officers and committee have shown that developers only need to cherry pick the valuable town centre uses away from the town centre, make sure that queues are no longer than 400m and that traffic congestion does not suffer more than 20% increase in delays at peak hours and make sure there are a handful of affordable housing units (even if many more had previously been approved and the site could accommodate many more) – Oh yes, and do it quickly before all of the key evidence is compiled.

The Councillors’ prepared eulogies on a theme of “Waitrose at all costs” bore all of the hallmarks of predetermination of the decision – no matter the hundreds of objections on valid planning grounds. Guildford deserves better and we are determined to ensure long-term solutions are found even when our planners seem focussed on the Emperor’s new clothes.

100225 CRC the new Tax

article written for RICS Commercial Property Journal


The full name of the CRC is the Carbon Reduction Commitment Energy Efficiency Scheme.  This monolithic bureaucratic structure, conceived originally as a carrot and stick mechanism to promote better behaviours and greater energy efficiency, is a monumentally inefficient means of taxing owners of properties and/or businesses in occupation.

But wait! Do we not already have a tax on ownership or occupation of commercial properties?  Do we not also have other measures built in to the transaction process to measure buildings (EPCs)?  What about the Climate Change Levy already imposed on fuel bills?  Surely there must be a more efficient way of levying a tax on the emissions of CO2.

The key concept of CRC is that it is meant to drive better behaviour through the potential adverse impact on corporate reputation if businesses failed to improve relative to their competition or their customers’ expectations.

This concept is a noble one and it has more than half of its merits founded in good economic principles.  For example, the intangible value of a brand is (simplistically) the surplus of share price after capitalising net assets.  For some brands this can be a very large number and anything that put reputation at risk would be aggressively managed by the company’s board.

Continue reading 100225 CRC the new Tax

100114 Accounting for Leases

Property Investment Journal

This paper expresses a viewpoint in respect of proposed changes to accounting for leases.  It has been presented as a summary of accounting principles and behaviours in the property leasing markets.

The paper reflects analysis by the author conducted as part of an MBA project (which, in its entirety, dealt with the Lease versus Own decision) and is summarised as follows:

In the definitions of SSAP 21, a lease is “a contract between a lessor and a lessee…” and a distinction is drawn between an Operating Lease and a Finance Lease.  The almost arbitrary treatment of leases has never been satisfactory but dealing with the shortcomings has proven awkward to the International Accounting Standards Board (IASB).

The value of reflecting leases on the balance sheet can be determined by close analysis of the work of  Lasfer and other proponents of the advice that leasing real estate is better than owning it.

The purpose of Financial Reporting is to show an accurate picture of the trading and health of the business in question.  If significant parts of the picture are missing, perhaps it is not surprising that markets struggle to comprehend the true nature of assets and liabilities. 

Leasing is an activity whereby the use of an asset is separated from the ownership of that asset. 

The Accounting Standards Board, in its Statement of Principle, defines assets as ‘rights or other access to future economic benefits controlled by an entity as a result of past transactions or events.’   Liabilities are defined as ‘obligations to transfer benefits as a result of past transactions or events.’ 

Ownership of property would appear to fall into the category of asset; any borrowings against that asset would be categorised as a liability.  A lease would appear to fall into both liability and asset categories.

It seems prudent and reasonable that the financial statements should incorporate all aspects of value of future use and liability on the balance sheet and allocate the appropriate proportion in the accounting period to the Profit & Loss account.

This begins to make more sense of the accounting treatment under FRS12 (Provisions, Contingent Liabilities and Contingent Assets) under which operating leases are suddenly capitalised as a liability. 

Peter Senge said “Today’s problems come from yesterday’s solutions”.  This seems to apply very well to leases where the accounting treatment ignores the multi-period value of use and costs of the same.  Users of the accounts cannot, however, draw their own conclusion as to the suitability of the property portfolio for running the business in the future if there is an absence of past, current and future information in the Financial Reports and Accounts.

It may not be comfortable for occupiers to adjust to the new accounting regime.  It is, in the author’s judgement, in the best interests of all stakeholders and, since it will require more active management, of the business itself.

Continue reading 100114 Accounting for Leases