The London Property Alliance webinar “Central London Debate: Rebuilding the Capital” took place on 16 September 2020. The panel considered the challenges facing the London economy and the infrastructure changes required to support its revival. Professor Tony Travers (LSE), chairing the session, commented that in terms of people leaving the City the coronavirus pandemic is “the most challenging event to affect London since the pandemics and epidemics of the 16th and 19th centuries.” Professor Travers suggested that as a central driver for economic activity nationwide the threat to the central London economy posed by a movement away from the city – whether through requirements to work from home or an inability for businesses to reopen - is a threat to the wider UK economy.
The panel discussion focused on three key areas:
The City and the West End
Cllr Rachel Robathan, focused on how the rejuvenation of the West End would be key to the overall rebuilding of the Capital. The panel heard how 10% of jobs in London are located in the West End and the area delivers 9% of business rates income nationally. The West End in particular is a place where the UK’s culture is showcased and is therefore key to attracting tourists and business, not just to the city but to the UK as a whole.
The panel agreed that there is a need to encourage a return to the West End. To this end, Westminster council has invested circa £1.8m in targeted strategies such as the “Inside Out” scheme designed to motivate people to visit London specifically for socialising and hospitality. The council has also implemented a hospitality scheme which is estimated to have benefitted around 500 businesses – the scheme involves temporary timed closures of roads and fast-track schemes for pavement licences. A push for attractions to re-open has gained some positive results with galleries and museums opening. However the on-going issue of theatre closures is severely hampering the recovery, and a particular effort is needed to secure the re-opening of theatres as a "special case" in the same way as flights are being treated as an exception.
Speaking more broadly, Catherine McGuinness, City of London Corporation, highlighted the fact that international visitor, domestic visitor and worker footfall is absent from the City and this is creating a wider issue for retail and hospitality businesses across London. The concern being the number of workers who now might not return to the City on a full time basis and a more permanent lack of demand driving businesses to close. Catherine noted, by way of example, that the financial services sector had moved (relatively) seamlessly to remote working and had managed to generate 95% of output during lockdown. Dan Scanlon, Brookfield (commenting before the Government’s most recent announcement) noted that larger corporates had started to change their messaging around returning to the City – a number of whom had initially indicated that there would not be a return to the City until next year but are now supporting an earlier partial return to offices having realised the value in “collaboration, connection and corporate culture.”
A poll run during the webinar found that changes to business rates, furlough and bounce-back loans were viewed as the best initiatives to support a return to the City for both workers and businesses.
The panel agreed that transport concerns remained the major blocker to confidence in returning to the City either for work or for recreation. Dan Scanlon noted that those with longer commutes into the City are finding the transport issues more challenging and explained that the need for clear and consistent messaging around the safety of the public transport network and office environments is key to bolstering consumer confidence generally and London’s return to the “new normal”.
With transport becoming a concern during the pandemic, the panel highlighted how different living circumstances have affected the return to cities in other countries. For example, Paris has a higher concentration of its residents living in the inner city, which has enabled Parisians to more quickly return to their workplace by foot or bike (France has reported that 84% of workers are back at their workplace in comparison to 34% in the UK).
It was suggested that diversifying and capitalising on some of the City’s underused transport networks might provide an immediate and workable solution. For example, Cllr Robathan referred to initiatives implemented by Westminster Council to successfully deliver 11,000 kilometres of cycle routes and 1,000 sqm of pavement space to allow people to move around more confidently. Catherine McGuiness also discussed how the increased use of the River Thames for transport forms part of a wider strategy of "greening the City" – there is no longer a focus on the underground but rather a shift towards developing better, safer cycle-ways and pedestrian walkways.
Considering infrastructure beyond the transport systems, Olivia Harris, Dolphin Living, discussed how the infrastructure supporting the London economy needs to be realigned to address workers' changing needs. The panel agreed that there has been a great and deserved focus on key workers in recent months but acknowledged that there is a wider group of critical workers who together with key workers provide the services and infrastructure which keeps London working both in the office and at home (for example those working for internet, telecommunications, and utility providers). Olivia emphasised that these critical workers cannot afford market value housing in central London near their workplaces and are instead either having to live in housing poverty in London or having to commute long distances for their work. This is however not limited to specific categories of worker and is an issue for many individual households who do not have access to housing by virtue of the disparity between income and housing cost in London.
The panel heard how housing models, other than shared ownership housing, need to be considered because shared ownership housing does not work in London where the market value of properties means that the deposits and payments are simply out of reach of a large subset of the population on or just above average household income. Furthermore, Local authorities and developers need to consider intermediate housing which bridges the gap between social housing and market rent housing and which provides housing solutions for those on median salaries. It was also suggested that developers need to commit, as part of their ESG initiatives, to deliver affordable housing rather than resisting it as an "obligation imposed" on them to ensure the supply of social housing and homes for critical workers. The panel also considered the need to review the sale of public land for which achieving best value usually means achieving best market price – the suggestion being that longer term value (such as housing delivery) should also be a yardstick of achieving best value.