richardfjbrown

A pretty bleak hope

I have a terrible admission. I suspect the Government has more or less made the right decision in relaxing restrictions from 19 July.

It’s clearly a fraught subject, but I can only take on trust what chief medical officers Chris Whitty said at the press conference yesterday (around 20 minutes in): whereas there was a strong scientific consensus for delay from 21 June, there is no such consensus now, and that there is “extremely wide agreement” that an ‘exit wave’ is inevitable, whenever restrictions are lifted. Those statements make it very hard to argue for continued imposition of some of the toughest government restrictions – on freedom of movement and assembly – that we have seen since World War 2.

The next few months will be bumpy, even if people take it as slowly as the Government is urging. Infection rates are falling in some places: the surge we saw in Brighton last month has subsided, but I suspect that this is a false dawn as students have dispersed (there have been similar slowdowns in other university cities). There have also been sharp drops in places like Blackburn, where this wave started, and peaked around a month ago. But I’d be surprised if cases didn’t go up again in coming months as people start deploying their new freedoms (though I get the impression that restrictions are already being ignored by some of the age groups who have seen most infections).

But I don’t think we’ll be going back into another full lockdown. I can’t see the point. In March to June last year, we didn’t really know what we were dealing with, how to treat it, how to test for it, whether we could inocculate against it. The lockdown bought us time. In January to April this year, we knew we had a vaccine that worked, so it would have been absurd not to seek to suppress cases of a deadly virus while the vaccine was deployed through the population.

Now, apart from younger people and refuseniks, we are as vaccinated as we are going to get. There is nothing new coming to save us. We need to get through the exit wave, and accept that there will be losses and damage (though scientists suggest that the difference will be one of timing rather than scale in response to different re-opening dates). And we need to hope – it’s a pretty bleak hope – that the NHS can cope and that we will be safer the other side. Despite the rhetoric, there have only ever been two strategies for dealing with covid: aquiring population immunity through infection and inocculation, or suppressing the disease. Suppression went out the window early on (and can’t really work long-term on an individual country basis), so we are left with managing the timing and route to population immunity.

The Government’s approach can easily look callous, however. The latest guidance for clinically vulnerable people more or less amounts to ‘Don’t get covid’, and we still lack adequate pay and protection for people forced to isolate because of the illness – particularly those in more exposed professions. I can see the case for replacing precautionary quarantine with a regime based on testing and symptoms, but it can’t make sense for people who know they have covid to be forced to go to work. These blindspots make the Government look at the very least careless about those who are clinically or economically vulnerable. I can’t understand why they don’t see this.

So I’m looking forward to standing near a bar again, to saying goodbye to bossy signage, QR codes and performative perspex, to returning to packed gigs in due course. But I’ll be wearing my mask on the train, and approaching the next phase of the pandemic with trepidation not celebration.

Buy with a little help

Should wider home ownership be a public policy objective? It is one of the big fault lines in housing policy debates. Advocates argue that ownership represents better value than renting, offers people a way to build up capital and creates more stable neighbourhoods. Sceptics say that our obsession with property ownership is diverting investment from more socially useful channels and fuelling a monstrous bubble of unaffordable house prices.

Both arguments are true to an extent. Home ownership has built up capital for generations and supported social mobility, but as prices have shot up more and more people have been locked out. Home ownership rose through the 20th Century, from fewer than 25 per cent of households in 1918 to nearly 70 per cent in 2001, though it has fallen back since then and particularly since the financial crisis of 2008/09.

In London, ownership fell sharply for 25-34 year olds in the first years of this century. Fifty per cent of that age group were owner-occupiers in 2001, but only 27 per cent were in 2016. The proportion has risen slightly since then (as a result of stalled prices and extended availability of Help to Buy loans), but remains low by historic standards.

It’s not hard to see why: mortgages may be relatively affordable, but the 2019/20 English Housing Survey, published this week, found that the median deposit for London’s first time buyers was £70,000 – more than twice the median salary. Given that less than half of those renting privately have any savings at all, it is mainly those with family wealth (“the Bank of Mum and Dad”) who can buy a property.

Some buyers have been assisted by the Help-to-Buy Equity Loan scheme (H2B), which was launched in 2013. It allows buyers to borrow a proportion of their deposit from the state and repay it when they sell-up or remortgage. Take up was initially low in London, but has increased since the maximum loan available was raised in 2016.

The scheme has been controversial. By stoking demand while doing to nothing to boost housing supply, it has been accused of pushing up prices. Restricting the scheme to new-builds has fuelled overpriced, poor quality schemes aimed primarily at the H2B market. These is also a risk that both government and house-buyers are left with losses in a period of stagnating prices. And now, the government has started winding the scheme down, restricting it to first-time buyers, and planning to shut it down completely by 2023. They have not said what, if anything, will replace it.

What is to be done? Many would advocate a huge increase in social housing provision and an end to the obsession with the “property ladder”. We certainly need more social housing. But as someone who bought a home when they were relatively cheap, I am uneasy with “Generation X-plaining” to younger people that they should be happy renting and miss out on the security and opportunities that can come with home ownership. And London’s recovery from coronavirus will not be helped if people who want to buy have to move out of the city (or choose wealthier parents).

Of course, we don’t know what will happen to UK house prices as we recover from the Covid crisis. As the Stamp Duty holiday ends and the recession bites, the market may slow or even go into reverse. London already has the lowest rate of house price growth in England. Market moderation is welcome, but London would need a precipitous and damaging crash in prices (which would freeze the supply of new homes for sale) to bring them in line with wages and savings. Even the government’s favoured solution – discounted “first homes” – would require deposits beyond the means of many Londoners.

There is a powerful moral case for supporting first-time buyers, particularly those without family wealth, and the core of the H2B approach – a state-sponsored loan that is repaid as and when property prices rise – seems sound. But the scheme needs fixing. Firstly, it should not be restricted to new build, thereby tying young people into an expensive and mixed-quality market. Its primary purpose should be levelling the playing field, not “stimulating the market”. And the scheme should be able to run for longer than five years, particularly given the choppy conditions of the property market right now.

Would this simply fuel the speculative fires of the UK housing market? Maybe. But punishing young people from poorer backgrounds for the exuberance of property speculation seems absurd and unfair. So we should accompany support for first time buyers, with reform of the tax breaks that make home ownership so attractive as an investment – for example, the UK’s outdated and regressive property taxes, and even the exemption of family homes from capital gains and inheritance taxes. There is no reason, beyond electoral calculation, that homes and homes alone should allow untaxed capital accumulation.

Restricting house-buying to wealthy families is a problem. Runaway house price inflation has also been a problem. Both problems have been most acute in London in recent years, and they need to be tackled together if the city is to offer opportunity to present and future citizens alike as it recovers from the pandemic.

First published by OnLondon.

Some speculation…

In March 2020, UK office workers embarked on an unplanned and unprecedented experiment in home working. During 2020, home working rates were three times higher than before the pandemic; and four times higher for people employed in London. The experiment went pretty well, all things considered. The tech generally worked, even if the novelty of video meetings from cramped bedrooms quickly wore off, and productivity seems to have been sustained – at least in the short term.

A bigger and more complex experiment lies ahead. What will happen to ‘office jobs’ in the future, and what implications will this have for workers, for careers, for places – particularly places such as city centres?

This rather long article is an attempt to work through my thoughts on these questions, so is necessarily speculative (and at least in part inevitably wrong).

All in or all out?

Unlike the mandatory and largely uniform experiment of lockdown, the next experiment will see a variety of models, driven by shifting and varying patterns of government regulation, the needs and cultures of different industry sectors, and employer and worker preferences. With the exception of a few banks who still seem to be playing by Wall Street rules (“Lunch is for wimps” etc), it doesn’t look like many employers are ready to demand all staff are back in the office full time.

This would have felt like a regressive step even before the pandemic; home-working rates have been creeping up over the past ten years, encouraged by employers’ focus on ‘agility’, better technology for communication (and surveillance), and strengthened rights to work flexibly. Now that working habits and norms have caught up with the technology, reverting to the ‘nine to five’ presenteeism seems self-defeating as well as unfair – particularly for people looking after children (predominantly women) who would find themselves squeezed once again by childcare timetables.

At the other end of the spectrum, fully remote working coped during the crisis, but can this be sustained? Many workers felt that they were drawing down the reserves of social capital they had built with colleagues. Increases in task productivity are offset by more difficult team productivity. Online tools may help smooth collaboration and learning, particularly for younger ‘digital native’ workers, but in my last workplace, these were the very workers who wanted to be back in the office – to escape from parents and cramped flatshares, and to meet up with colleagues and peers.

Working away from the office may also make it harder for younger employees to learn the trick of the trade – how to behave in meetings, how to give and receive criticism, how to make a pitch, how to manage a difficult client – or for new employees to get to grips with all the unspoken aspects of corporate culture. All these can no doubt be taught formally, but for most of us they have been learned informally, even osmotically – by watching, listening and modelling.

Hybridities – beginning of a great adventure?

So, while most office workers are still at home, it is ‘hybrid working’ that is expected to dominate in the future, with people spending two or three days in the office and the rest working from home (or another remote workspace).

This could be entirely unstructured, allowing considerable discretion as to where and when employees work, and already is in many workplaces. But wider adoption could pose problems. First, most workers would choose to work from home on Mondays and Fridays, and in the office mid-week. If this approach was widely adopted it could lead to a sharp drop in demand for city centre services but would make it hard for firms to cut costs by reducing floorspace. Perhaps more seriously, it would risk reinstating a divide between those who were willing and able to be in the office more (principally men without caring responsibilities), and those who worked from home more (often women with caring responsibilities). The former have tended to do better in terms of career progression, even when the latter are more productive.

If these and other advantages are sustained, you could quite easily see a tipping point, as workers find it easier to collaborate, but also to compete, by being in the office. Hybrid working could remain permitted in theory, but become increasingly rare in practice,

Alternatively, management could decide who came in on which days. But this isn’t problem free either. Do you bring whole teams in together, or do you mix them up? Do shift patterns change so everybody gets some Mondays and Fridays at home? Can online tools work as well for informal as well as formal collaboration, when some people are in the office and others are at home? Is it really fair to force workers – particularly those for whom home working is difficult – to stay away?

But – to step back for a moment – why do we go into an office at all? We office worker types risk not only thinking everyone else is an office worker, but also that everybody’s office job is like our own. In fact, ‘office jobs’ contain multitudes – from conceptualising, designing and selling products, to talking to clients and collaborators, to analysing data, writing reports and coding, to monitoring service delivery, to managing staff, to maligning management and gossiping about Love Island. In varying proportions, even highly-skilled ‘knowledge economy’ jobs involve ‘relational’ work (essentially talking to other people) and more task-focused ‘programmable’ work.

There are some jobs dominated by ‘programmable’ work that can be carried out almost entirely autonomously, they are a minority. (And as a recent report argued such ‘work anywhere’ jobs can as easily move overseas as they can move out of UK city centres.) For the rest of us, adapting our workflows so that we can concentrate more ‘programmable’ work into days away from the office may require the type of flexibility that is hard to align with a structured approach to hybrid working.

In the short-term, therefore, I think we will see a period of experimentation. Different firms will try out different models of office, hybrid and remote working, testing out their impact on staff morale, retention and productivity. In an increasingly fluid labour market, you could see some employers targeting packages at younger workers, and some offering a deal that better suits people with children. It could be quite tumultuous.

But my hunch is that office and remote working models will begin to dominate in the medium term, because they have a coherence and support a common culture with which hybrid models struggle. Firms will reach tipping points where almost everyone is in all week, or almost nobody is; one of those will become the dominant model for particular firms or whole sectors, and decisions on leases and employment terms will reflect that. Neither model will be entirely pure: office-based jobs will probably allow more flexible working than before the pandemic, and remote-working employers will still bring staff together for structured collaboration sessions. But my guess is that working patterns will be 90:10 rather than 60:40.

Cities and centres – inertia counts

So, what does this all mean for our cities, and for London in particular? I suspect there are three scenarios: decline, dispersal and doubling down. Cities could see their centres decline in absolute and relative terms, losing jobs and population – particularly wealthier people, who can afford choice and are less tied to lower-paid service sector jobs. This would be disastrous in economic and environmental terms, as car-dependent sprawl spread through the countryside, and the problems of poverty and dereliction increased in cities. However, while there are some signs of ‘de-urbanisation’ in recent UK population figures, this feels the least likely option, not only because of the continuing appetite for some office working discussed above, but also because of the polutical risks involved in allowing this to happen.

A less dramatic variant would be dispersed patterns of working in and around core cities – perhaps realising the ‘fifteen-minute city’ vision that has caught the imagination of many city planners. I can see this taking hold, particularly for some sectors and some job types. More ‘relational’ jobs (consulting and advisory services, advertising, publishing) may stay in the city, benefitting from all the visible and invisible spillovers of agglomeration, while more ‘programmable’ jobs (coders, technicians, web designers) move out (or, as mentioned earlier, maybe even go offshore).

A recent OECD report suggested corporations would seek to relocate offices out of city centres. But how much would an employer gain by moving out of a city such as London (or Birmingham, or Manchester) with highly developed radial public transport systems and ecosystems of business services. Moving from London to Colchester, Crawley or Cranfield would inconvenience many more workers than it would help, at a time when businesses follow talent rather than vice versa. Inertia has an impact. So I suspect that most firms that retain office-based working will remain in city centres, and that the savings to be made from reducing footprints will be limited – though you can expect tenants to negotiate hard when leases come up.

There is still a longer-term question: will new start-ups see the value in city centre offices, or will they naturally adopt a more dispersed business model? Designing in dispersed working from the outset makes a lot more sense than trying to retrofit corporate structures, processes and cultures. But there’s a paradox here. The young people who work in such businesses are also the young people who are drawn to cities for the richness of professional and personal opportunity, for culture and recreation, and often to be with their peer group after university. If dispersed working is adopted by a new generation of firms, it may be dispersal within rather than dispersal from big cities.

The ‘doubling down’ scenario, where city centre working intensifies, seems the least likely at first glance. The co-incidence of a pandemic and technological change has created both a driver and an enabler for more dispersed working. But in the long-term, policy will make a difference and policy should be favouring urban growth (despite the electoral politics of ‘levelling up’).

We know that cities are more efficient than sprawl in terms of their carbon impact, and we know that government policy is refocusing new housing into cities, after a flirtation with more dispersed settlement. We can also expect business travel by air to decline, as carbon targets bite. All of these factors suggest that economic growth may concentrate in a few densely-mixed urban centres, well connected by lower carbon transport, rather than being spread through a network of offices within a country or a global region. The role of these cities and of offices within them will change – with extended commuting patterns, less generic retail, and offices that are platforms for collaboration and meeting rather than for routine administration – but they have successfully changed before.

The UK’s cities have borne the brunt of the health and economic harms arising from a pandemic. They will face the steepest road to recovery, and some may struggle to get back on their feet. But over time, I think our sociable natures will combine with the continuing strength of agglomeration, the inertia of infrastructure and the growing urgency of climate action, to enable cities to bounce back. It will be a choppy few years. Businesses need to be ready to experiment and adapt, without betting the house prematurely on any particular model. Governments need to respond with the policies and investments to make this recovery economically dynamic, socially just and environmentally sustainable.

Unnovation

After the enforced hibernation of winter, we took a week’s holiday, in the hills and beaches, hotels, pubs and restaurants of north-east England.

Continuing covid regulations, staff shortages and cultural nervousness have conspired to create some very odd regimes. Some hotels seemed to demand face coverings even in the open air, others seemed pretty blasé about it. One hotel refused to provide a morning paper ‘because of the pandemic’, while others delivered a paper to the room and had others available over breakfast.

Ordering systems are weird too. One hotel laid on a breakfast buffet, but required guests to put on awkward proctologist gloves before approaching the spread – a helpful brake on the ‘breakfast buffet inflation’ described by Giles Coren in a column at the weekend. A café brought menus to the table, but then asked you to go inside to order at a counter, slightly defeating the point of table service.

But the most perplexing was the four-star hotel that insisted that all orders were processed through its clunky app, resulting in items being delivered to your table in random order, often without cutlery, a bit like an in-house Deliveroo service. You didn’t have to use the app if you made enough fuss, but then had to go and huddle with one of the friendly waiting staff by a console. The idea of staff noting orders on a pad or device, then inputting them, seemed impossible.

But more seriously, there was no sense of anyone being in charge of their systems and of individual guests’ evenings. All the skills that create good service – awareness, anticipation, empathy – had been stripped out, reducing the skilled job of waiting tables to a much less skilled bussing operation (which I suppose at least aligns with the Government’s new immigration rules).

I delivered these whinges to the hotel in question, but I am worried that the combination of staff shortages and residual nervousness (there is no evidence of anyone catching covid from a paper menu) may enable more and more of this type of ‘unnovation’, deskilling workers and cheapening customer experiences.

It’s worth comparing this experience with McDonalds. Though I have in the past described their ordering system as a “bleak, beef-based game of bingo”, I’ve become used to it. And the system works – the interface is well-designed (even if the relentless upselling is tiresome), and nobody goes to McDonalds looking for advice and engagement from the staff. Indeed, I can see that the system actually improves service and covid security by enabling service to your table or car.

But the impersonal nature of transactions is, if not the point of McDonalds, at least a feature that customers are happy to accept for the sake of fast service and low prices. Other hotels and restaurants should be careful not to draw the wrong lessons, however short of staff they are at the moment. Creating a half-arsed fast-food experience in a four-star setting at fine-dining prices seems a recipe for irrelevance not renaissance.

Ten years after

Making the case for London has been complicated during the pandemic. It risks conflict with the ‘metropolitan elite’ myths so fondly fostered by government (and so ably skewered by my former colleague Jack Brown on Monday’s Start the Week). And, like many civic leaders, Sadiq Khan has been trying to tell a story of devastating impact to a seemingly indifferent government, but also to entice workers and tourists back into a renascent capital by reminding them of all London has to offer.

The pandemic has indeed had a particularly brutal impact on London’s citizens and economy, but recent figures suggest that the tide may be beginning to turn. Tube and bus ridership is higher than any time since March 2020, though still up to 50 per cent below pre-pandemic levels. Google mobility data also shows a slight return to central London, though more for retail and recreation than for work (which accords with higher public transport use at weekends).

And, according to the latest ONS figures, London’s unemployment rate has also dropped, falling from 7.5 per cent in the three months to January, to 6.5 per cent in the three months to April. Unemployment is still higher than any other region’s, London boroughs still have some of the highest claimant counts and furlough rates in the country, and the economic impact of coronavirus has hit specific demographic groups hardest, but there are glimmers of hope.

So, it’s worth looking back to the last recession and recovery when London has hit hardest but recovered fastest. Could history repeat itself? As the chart below shows, London’s unemployment rate rose sharply ten years ago, and was more than two points higher than the UK’s in mid-2011, but then fell much more quickly, roughly tracking the national rate from 2014. A similar gap opened up last year, but has begun to narrow since January.

Unfortunately for London there were specific features of the 2011/12 recovery that favoured the capital. Quantitative easing, Government’s response to the financial crisis, diverted investment into booming equity and housing markets. And the London 2012 Olympic and Paralympic Games may have had a minimal direct impact on spending (most of the construction was complete by 2012, and Olympic Games years displace normal tourism expenditure), but were a powerful showcase for the UK internationally, and for London in particular.

Added to this, ten years ago, Boris Johnson (then Mayor of London) was keen to make the case for the capital, and able to persuade the Coalition Government that starving London of cash was no way to help the rest of the country, so projects such as Crossrail and the Olympic Park legacy development went ahead.

None of these factors are present today. Rather than being boosted by cheap money, financial services have been sidelined in Brexit negotiations in favour of more picturesque and politically salient (but far less productive) industries like fisheries. Big infrastructure projects, such as the redevelopment of Euston Station for HS2, are being squeezed, hopes of a swift return to international travel are receding, and the narrative of ‘levelling up’ looks pretty hostile to London and its nine million citizens.

At the G7 Summit last weekend, Boris Johnson warned against repeating the mistakes of the ten years ago, when (as he didn’t quite say) austerity extended and deepened the impact of the recession for many people and places. This is right, but the correct lesson is to extend support wherever it is needed to ‘level up’ the prosperity and life chances of citizens and communities, not to stall the UK’s economic engine in pursuit of headlines or electoral advantage.

When every day was like Sunday

A fragment, of what I’m not quite sure.

Sunday is the pivot of the week, its end and its beginning. These are family memories of some of the 2,500 or so I have lived so far.

In my 1970s childhood, Sundays were quiet and formulaic. At morning mass with my Mum and sister, I would already by thinking profanely about lunch – the roast meats, the heavy puddings (steamed syrup sponge or lemon meringue pie). We would have a drink before lunch (gin or Campari for the parents, Sodastream for the children), and Dad would often decide to hold a quiz during the meal, to occasional visitors’ horror. Afterwards he would take us children for a walk in the beech-clothed Chilterns, while my mother had an unusually self-indulgent snooze.

For much of the 1980s, I was at boarding school. Sundays there also revolved around church and lunch (and cycling off to neighbouring villages to find pubs that served teenagers). But I also remember the periodic visits to midlands hotels with my parents. Big lunch, a bit of booze, then a walk and slightly tearful return to school. I wasn’t that miserable to be honest, so I suspect the tears were part performance and part response to the melancholic timbre of those days – always bleak autumn in my memory.

Lunches together were less frequent in the 1990s and 2000s. I was at university then living in London, so trips to my parents’ house were celebratory occasions, allowing Mum to showcase new dishes and giving Dad the excuse to ‘kill the fatted bottle’ (his phrase), before driving me erratically back to the station.

Then in the 2010s, as my parents weakened, we would be there to drive Mum to mass, to bring and cook a meal, reproducing and revising her repertoire, cutting up her food and wheeling my father through for his still enthusiastic assault on food and wine.

Now Mum is on her own; we bring our own food, as the carer spoons puree into her mouth.

It’s all so fucking swift, so remorseless.

Inner city life, inner city pressure

As the weather improves and lockdown restrictions are relaxed, life is ebbing back onto the streets of central London. People who were commuting in daily just over a year ago are beginning to revisit a city centre that is both familiar and utterly transformed. And to think about its future.

There are still more questions than answers about that future. How much remote working will persist, and how will much-discussed models of ‘hybrid working’ play out? Will employers reduce their demands for workspace, and will any surplus space be picked up by new arrivals attracted by lower rents? How quickly can tourist and international student numbers recover, and how will shops, pubs and restaurants cope if both commuting and tourism remain suppressed?

These uncertainties are likely to persist for some months, but some slackening in demand for office and retail space is widely expected, as working and consumption patterns change, and employers rethink their needs. Some premises might be adapted by cultural and community organisations, for experimental pop-ups and meanwhile uses, but it is likely that new residential development will play a part too.

This could actually help build the city’s resilience. As Centre for London set out just before the pandemic bit, central London’s population has been growing fast over the past decade, but the city centre is still less densely populated than Paris or New York. So when coronavirus brought commuting and tourism to a standstill, central London and its businesses were particularly hard hit by the loss of trade, and have continued to struggle as restrictions have been successively relaxed, re-imposed and relaxed again.

So more people living in the city centre is not only likely but desirable, as was underlined in Arup’s recent report for the Greater London Authority on the future of the Central Activities Zone (CAZ):

“A higher CAZ residential population, to offer more sustainable lifestyles, resilience, increased vibrancy and ‘stewardship’ of the CAZ’s resources for others, and bringing London more into line with its global rivals.”

But allowing more residential development or conversion in central London is not straightforward. The current London Plan and borough planning documents give the CAZ and Canary Wharf special status, to protect the clustering and density of ‘strategic functions’ (for example global commerce, education, culture, government and tourism) and give these uses priority over housing. This protection, the argument goes, preserves the essential character of central London as a truly global city centre and the economic powerhouse of the UK.

How could more housing be brought into the mix without diluting these qualities and this global draw? Should new build and conversions be pepper-potted through the CAZ, or focused in a few neighbourhoods? And can office and retail conversions retain flexibility, or is any switch to housing a permanent change?

Some parts of central London and some building types look a lot more inhabitable than others. Big open-plan offices, as found in the heart of the City and Canary Wharf, are unlikely to be adapted as easily as older buildings in the West End, Clerkenwell, Bloomsbury and the South Bank, which have switched from houses to flats to offices and now perhaps back to housing over the years.

There are also issues of management and services. How would potential disputes between residents and businesses be resolved over night-time deliveries, late-night crowds leaving bars and nightclubs, parking and vehicle access? And where will health services and schools be located, as well as everyday shops?

All of these factors suggest that a remixing of London’s city centre will need to be carefully managed, not left to the free-for-all of ‘permitted development’ from office to residential uses that government is proposing – and which has led to some truly atrocious conversions of commercial buildings. Central London currently has exemptions from permitted development, but these expire in summer 2022, and London’s boroughs will soon need to start making the case for renewing them.

Central London is a dynamic and creative place. As we emerge from the pandemic into a world that is still being reshaped, Centre for London hopes to explore how we can apply that dynamism and creativity to refresh its mix of uses, as well as to support the national recovery.

[Published by Centre for London, 26 May 2021]

Now is time for a TfL deal

Transport for London (TfL) is the seat of the Mayor of London’s most significant power and responsibility. Welded together in 2000 from an assortment of public corporations, government agencies and joint committees, TfL spends more than £10 billion every year and employs more than 25,000 people. While London’s Mayor is underpowered in many respects, their control of this integrated transport authority is envied by many other cities in the UK and beyond.

Right now, transport is also Sadiq Khan’s biggest headache and biggest priority. TfL’s revenues collapsed during the pandemic, as passengers stayed home, and the network has only been saved from bankruptcy by government support packages, repeatedly agreed at the last minute and accompanied by terms and conditions that have nibbled away at the Mayor’s authority.

The latest support package is due to expire on 18 May, so the next cliff-edge is approaching fast. TfL have been arguing for a longer-term settlement, and their scenario planning predicts suppressed income till 2024/25 in almost any conceivable future. With neither mayoral or general elections scheduled till 2024, and the pandemic in what we all hope is irreversible retreat, obstacles towards striking a longer-term deal should now be surmountable.

Doing the right deal will require radical thinking from the mayor and government alike. Pushed to find new sources of funding for infrastructure investment as well as operations, Sadiq Khan has argued that TfL should receive the £500 million that Londoners pay in vehicle excise duty (VED), which is currently ring-fenced to pay for road repairs outside the capital. Alternatively, there have been discussions of a charge for people driving into London from outside.

Neither proposal bears much scrutiny: the VED settlement is indeed unfair to London, but is a declining revenue source, and allocating more to London would mean allocating less outside the capital (or government making up the balance). A boundary charge would be another way of making those who live outside the capital pay towards the services that they use, but would likely have a negative effect on people living and working around the edge of London, and could generate more hostility to the capital at a time when it needs support and visitors.

A more equitable approach would be London-wide road user charging, to replace the increasingly complex hierarchy of charging zones and fees, as recommended in Centre for London’s 2019 report, Green Light. A pay-by-the-mile scheme, which reflected congestion, pollution and the availability of public transport alternatives, could raise substantial sums. For example, an average charge of 5p/mile for cars and light goods vehicles, and 50p/mile for HGVs, could raise as much as £1.5 billion every year – twice as much as is currently raised by the congestion charge.

Such a scheme would also make policy sense. It creates incentives for lower carbon transport options, rather than using public transport revenues to cross-subsidise highways maintenance, as is currently the case. The Green and Lib Dem candidates both argued the case for road user charging during the mayoral election campaign, but Sadiq Khan was more cautious, committing only to “ask TfL to consider other ways of raising income to make up for the loss of VED” if the Government refuses to pay up. And you can see why – the politics of restrictions on car use have become a hot button issue in this election. But now, at the beginning of a three-year term, is the time to make the case for bolder action.

But if transport funding is the elephant sat solidly in Sadiq Khan’s in-tray, it should have at least one foot planted in Government’s. Under a deal negotiated with Boris Johnson, when he was Mayor, central government grant support for TfL was phased out, with business rates and fares plugging the gap. All very well when London’s economy was booming, but even the most optimistic scenarios see business rate revenues and fares alike suppressed in the short- to medium-term.

London’s transport system could be allowed to decline, and this is one the scenarios explored by TfL, but this would be a hugely retrograde step, which would deal a substantial blow to the capital’s chances of recovery and of achieving zero carbon targets, and to tax revenues from London supporting public services across the country.

Government knows this, so they know how costly it could be to starve London’s transport system of resources. If the Mayor can show he has the vision to transform London’s public transport funding model, the Government should make available the funding to support him during an economic crisis that has hit London particularly hard.

[First published by Centre for London, 10 May 2021]

Fork out to eat out to help out

As London’s pubs and restaurants make the first tentative steps towards re-opening after a disastrous year, with excited punters booking weeks in advance for chilly pavement tables, reports suggest they are struggling to find staff.

Restaurants, bars and hotels were having difficulty recruiting and retaining even before Covid, as Centre for London revealed in its 2019 report into kitchen jobs. Since then, the implementation of tougher immigration rules has combined with an exodus of overseas workers (estimated at anywhere between 35,000 and 700,000) from the capital during the pandemic to turn the crisis acute.

As the UK’s borders open up, some foreign workers will return, though the exclusion of many hospitality jobs from the “shortage occupation lists” that allow mid-skilled workers to obtain work visas will make replacing those who choose not to come back more difficult.

Home Secretary Priti Patel said last summer that “the new points-based system will encourage employers to invest in the domestic UK workforce, rather than simply relying on labour from abroad.” Given that more than 50 per cent of hospitality and food workers are foreign nationals, this approach may be tested sooner than she had planned.

Can the domestic workforce plug the gap for London’s hotels, restaurants and bars? With unemployment in the capital higher than in any other region (nearly 10 per cent of the workforce were claiming unemployment benefits in February), there’s a deceptively neat answer to the recruitment challenge.

But jobs in hospitality can be a tough sell. Despite the camaraderie and fun many experience, the work can be tough, with antisocial hours and limited opportunities for advancement. Right now, unemployed Londoners may be worried about exposure to the virus as customers return. They could also hesitate before seeking employment in a sector that will be first in line for closure if the government’s “irreversible” lifting of Covid restrictions results in the brakes being slammed on again.

And there are deeper issues of pay and conditions. In 2020, around one million people worked in hospitality (“accommodation and food services”) in London, according to government surveys. Almost 25 per cent of those workers were paid less than the National Living Wage of £8.20 per hour (for 21-24 year olds), and 75 per cent were paid less than the London Living Wage (designed to reflect the actual cost of living in the capital) of £10.75 per hour.

Can employers afford to pay more? Ingredient costs have been rising as a result of Brexit, and business rates in London penalise enterprises that take up space, such as the places people meet to eat, drink, dance and sleep. Business rates payable by restaurants in London increased by a third in the 2016 revaluation. On top of this, many hospitality businesses that have struggled to survive lockdown now face a precarious future, as social distancing persists even as tourists and commuters start to trickle back. It is a lot to ask the sector to shoulder the burden of raising wages on its own.

The government could do more, by extending business rate holidays in the short term and reforming business rates in the longer term. Landlords should show restraint when negotiating rents. But we also need to ask whether we are paying enough when we go out to eat and drink. Londoners eat out more frequently than people in other parts of the country, and the capital has restaurants that offer great value alongside the glittering palaces of oligarch-baiting excess.

Many Londoners celebrating the emergence of hospitality from its enforced hibernation and reflecting on how much they value eating out will have built up a stockpile of cash during the lockdown periods. Perhaps this is the moment to re-appraise the prices we pay, so that essential and skilled tasks such as taking orders, cooking food and washing plates are well enough rewarded to attract people with the skills the sector needs, both from the rest of the world and London itself.

[First published by OnLondon, 7 May 2021]

Fund for all the family?

Five days after the 2021 Budget, are we any clearer what “levelling up” means?

One thing is clear. It doesn’t mean investing to tackle London’s problems, even after the damage done to the capital by the pandemic. Only two of London’s boroughs (Newham and Barking & Dagenham) are included in the priority tier of local authorities eligible for the new £4.8 billion Levelling Up Fund. The three prioritising ‘place characteristics’ set out in the Fund’s Prospectus could have been designed to exclude the capital:

Need for economic recovery and growth;
Need for improved transport connectivity; and
Need for regeneration.

It’s not yet clear how these are quantified and compared (or precisely what “regeneration” means), but the first two work well enough to rule out London, which is distinguished by a persistent mixture of dynamism and deprivation alongside an enviable transport network. Boroughs like Westminster and Tower Hamlets have intense poverty among their residents, but also have three times the economic output per head of the UK as a whole, and twice that of other big cities like Manchester, Belfast and Edinburgh.

So this is not a fund for London, or for investing in the needs of people rather than place. And there is a case to be made for that: even London’s most fervent advocates would recognise that there are places in the UK that urgently need investment in connectivity and economic activity. You could even see a precursor in Michael Heseltine’s City Challenge programme of the early 1990s: selecting and investing heavily in a few urban centres, following a bidding process, which would in turn power up new enterprise and opportunity around them.

But that doesn’t seem to be how this Fund will be applied. The prospectus invites local authorities to submit one bid each for up to £20 million (£50 million in exceptional cases for big transport projects). Twenty million is a substantial sum, but hardly transformative – and significantly less than was allocated to City Challenge bidders 30 years ago, when 20 cities received £37.5 million each (around £72 million in today’s money). Assuming £2 billion is handed out in the first round, this would enable 100 bids to be funded. It looks as if spreading the jam wide and thin is the priority.

This may also explain the variety of places in the priority tier. It includes most major city centres (apart from London and also struggling smaller cities like Sheffield, Plymouth and Portsmouth). But it also comprises “Red Wall” marginals and prosperous suburbs and rural areas such as Richmondshire (I suspect to the Chancellor’s embarrassment), Lewes and Trafford.

Poverty is not confined to the inner cities, but not every smaller town and rural area is struggling either. Some lack economic powerhouses and transport hubs, but nevertheless have prosperous populations of commuters and retired people. You can see the government’s problem here: it is hard to distinguish struggling from successful smaller towns without giving a higher weighting to deprivation measures, and doing that would have pushed the focus back towards London and the other big cities.

The language of the prospectus seems to fudge things further. It makes a very tentative and non-economic case for infrastructure investment:

“Investing in infrastructure has the potential to improve lives by giving people pride in their local communities; bringing more places across the UK closer to opportunity; and demonstrating that government can visibly deliver against the diverse needs of all places and all geographies.”

Elsewhere, the prospectus talks about funding projects that “bring pride to a local area”, about “infrastructure that has a visible impact on people and their communities”. It starts to sound as if the purpose of the fund is performative. It aims to give the appearance of activity and impact in the next three years, redeeming the electoral promise made to “Red Wall’ constituencies, rather than seeking any lasting change, let alone the type of economic rebalancing that has evaded ministers for decades.

Either I’m being deeply cynical or the Levelling Up Fund is. There’s no sense of strategy, of how “levelling up” might be achieved, or even of what it is. A bold government could focus a critical mass of investment on the places and projects that could maximise prosperity and opportunity, or it could hand funding over to local politicians to allocate in line with local priorities. Instead, we have the continuation of centralised munificence, infrastructure investment by supplication.

The Mayor of London and borough leaders have expressed anger at how the Levelling Up Fund has ignored London’s needs. If I was leader of a northern city, I might be angrier still.

[First published in OnLondon, 7 March 2021]