Commuting again, cheek-to-cheek?

People are starting to come back to Central London, even if caution about rising case numbers, new variants and the onset of summer holidays mean the recovery is slow burn rather than big bang.

The graph below compares Transport for London (TfL) data on use of contactless and Oyster cards to tap in and out of stations on three sample days, according to different types of station (more detailed data and the station typology can be seen here). The days, chosen by me, are the last Thursday in July this year and last year, and the last Thursday in February last year. 

Screenshot 2021 08 12 at 14.14.00

The change between July 2020 and July 2021 is striking. Each group of stations saw around twice as many taps at the end of last month compared to the previous July, when restrictions were similarly relaxed, with a slightly stronger recovery for ‘City’ and ‘Tourist’ destinations, though ‘City’ station usage (which includes Canary Wharf, Holborn and Clerkenwell) remains only a third of pre-pandemic levels.

Comparisons with February 2020 show we are still a long way from business as usual, and it will be interesting to see whether change accelerates in September. But the overall picture looks positive for those who want to see people – the lifeblood of Central London – return to its streets, and is in line with the “organic” return to cities that James Forsyth wrote about in The Times last week.  

However, there could be bumps in the track ahead. One relates to human behaviour. Like many people, I have found my recent train and Tube trips a pretty pleasant experience. I’ve had a seat and not been too close to other people, even if wearing a mask is a minor spec-fogging inconvenience.

The closer we get to pre-pandemic levels of loading, however, the closer we will get to crowding levels that we find uncomfortable. It’s hard to say in advance what these will be – standing room only, shoulder-to-shoulder, armpit-to-nostril? – and tolerances will vary, but I suspect each of us could reach a tipping point where we no longer feel so happy using the Tube, however low Covid cases may be. 

More staggered commuting hours may mitigate crowding. And we can expect some reduction in demand from increased working from home, though if everyone works from home on Monday and Friday it will do little to ameliorate crowding midweek. But I suspect there will be a self-regulating brake on levels of Tube usage over the next few years at least, and that brake will apply itself at a lower level than before the pandemic.

The problem will become a whole lot worse if Transport for London’s funding deal, still being thrashed out with government, forces cuts in service frequency and capacity, as government has suggested it might. A recent national poll suggested that 23 per cent of people anticipate using public transport less, with most of those expecting to use cars more. In London, congestion, the soon-to-be enlarged Ultra Low Emission Zone and parking charges may make that less of an option. But squeezing services could increase crowding, and in turn drive more people away from public transport – maybe to walk or cycle, but maybe just to stay away from Central London altogether.

TfL needs a funding deal that recognises how precarious London’s recovery could be, and how easily service cutbacks could push the Tube into spiral of overcrowding, falling passenger numbers and falling revenues. This means looking beyond reliance on fares for the next few years at least, to run the system as a vital amenity for urban recovery, rather than a commercial service to customers. If the government wants people to come back into London and other city centres, it needs to support public transport systems that marry environmental sustainability with economic vitality.

First published by OnLondon.

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.

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.

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.

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]

Will sex save the city?

Ah, the romance of urban economics and human geography!

In a thread of tweets last month, global cities guru Richard Florida reflected on the future of clustering, the force of agglomeration that brings industries and people together in cities. Looking at advances in remote working during the pandemic, he suggested that location may become less important in future for industry clustering than for talent clustering. HQs may locate where CEOs want to live, even if that is not an urban centre, but talent will continue to cluster in selected locations. In his words, “young folks will continue to be drawn to cities for a combination of thick labor and more so mating markets.” 

Bloomberg columnist Noah Smith reached a similar conclusion pondering whether the changes triggered by the pandemic will enable workers to escape the overpriced grasp of ‘superstar cities’. He sees access to labour markets and office productivity as easier to replicate in a world of remote work, but is less sure about the informal knowledge spillovers that form the dark matter of agglomeration. And he thinks the social value of cities would be even harder to replace, particularly for young people seeking “bars, music venues, fun social events, lots of potential friends in their age group, and — probably the most important piece — opportunities to meet romantic partners.”

So will sex save the city? Cities have always cast their net wide, gathering young people (or at least those with the means) to meet and match up – from the aristocratic dances of “the season” in the eighteenth and nineteenth centuries, to the graduate convergence that sees a net flow into London of 25,000 people aged 20-24 in a normal year.

For all the features about the frustrations of dating in big cities, and despite the rising role of dating apps, restaurants, bars and workplaces still play a pivotal role in bringing many couples together. For all of those, cities offer a ‘thicker market’ – more opportunities and more choice, particularly for gay people or people from other minority groups who are more likely to be gathered in the big urban areas. And meeting up with your perfect online match is easier if they are a tube ride, rather than a flight, away.

London’s employment, entertainment and dating offer has drawn young people from across the world for years, but its short-term outlook looks pretty challenging right now. The restaurants and bars are closed, the theatres and nightclubs are silent, and the flows of people that animate the city are stilled. As reflected in Arup’s recent report for the Greater London Authority (and in Centre for London’s reports), London’s core has seen some of the sharpest slowdowns in activity of any city in the UK or comparator cities abroad, and London as a whole has seen the UK’s sharpest spike in unemployment and highest levels of furlough.

GLA research published in October estimated that lost tourist and commuter expenditure in the Central Activities Zone would be £13 billion in 2020. This loss of custom has hit London’s hospitality and cultural sectors particularly hard. Arup estimate that the West End arts and culture economy shrunk by 97% in 2020.

Moreover, while the UK’s vaccinations are a huge success story, the appearance of new strains of coronavirus means that an imminent big bang re-opening of London to international tourists, students and business visitors seems unlikely. But that will change over time; global travel will rebound, even if not this year. As I write, snow is turning to sleet outside, gusting around in a bitter easterly wind. As ever in the depths of winter, summer seems almost inconceivable, but we all know it will come.

The challenge is not to give up on London’s hospitality and cultural industries, magnets for the people who come to London to work, to study, to innovate, to make friends and more, as well as for those who visit for conferences or holidays. Confusing short-term sickness with long-term viability risks becoming a self-fulfilling prophecy, if we let the infrastructure of the city’s sociability decay. 

This means that more support is likely to be needed this year – to sustain what is hard to replace, to allow space for new growth, and to address long-term problems such as housing quality and affordability – so that London can continue to play its role as the UK’s gateway to the world. When we emerge from the other side of this crisis, young people will once again be drawn to the possibilities and freedoms that cities can offer. London needs to be ready to welcome them back.

[Published in OnLondon, 14 February 2021]

Losing my religion – or how I learned to start worrying and distrust the news…

 As the waves of Covid19 have ebbed and flowed over the past 10 months, I have become more and more fixated on the data that chart their course. Every afternoon, I check if the daily case, hospitalisation, death, and now vaccination numbers have been updated. I look at the curves, at regional patterns, at the maps that enable me to zoom in to my neighbourhood, and those where family and friends live. Every week I look out for the ONS infection survey, and for other surveys like the Imperial REACT study and the Kings College London’s ZOE symptom tracker.

Why am I doing this? I’m not sure it’s healthy behaviour. I am not an expert in interpreting epidemiological data; and much of the time I learn very little. The problem is that I find myself believing less and less what the government or most media outlets are telling me. I see a headline proclaiming that the lockdown is having no impact, even as cases are falling across the country, then another telling me the opposite 48 hours later. The next day a paper tells me that a new strain of coronavirus is more deadly (albeit with sly quote marks), while another news outlet tells me the question is still open.  The government cautiously suggests there is some evidence that lockdown is having an impact, when their own data show that case numbers have fallen by a third since the beginning of January.

At one level, this is not really surprising. The pandemic is a complex phenomenon, and its progress is the product of imperfectly understood pathology and the unpredictable behaviour of wearied humans, which is further complicated by delays of weeks between actions and effects. Different data may point in different directions, and reasonable people may disagree on interpretation.

But I worry that a lot of disagreement is not reasonable, but partisan. Online, the debate is polarised between presumed ‘covid deniers’ and alleged ‘lockdown lovers’. Passionate intensity reigns, and good faith arguments seem thin on the ground. When in early January I pointedto some limited evidence that case numbers seemed to be falling in the parts of the south east England that had been locked down since mid-December, I was corrected (rightly) for looking at case numbers rather than positivity rates (though the trend was sustained, so I was right even if accidentally), but I got the feeling that my real error was being on the wrong side of the argument, that I was suspected of trivialising the illness, or making a point for or against lockdowns.

So far, so Twitter. But the mass media are not much better. Rather than trying to offer level-headed analysis, some papers seem wilfully optimistic, others determined to find the clouds behind every silver lining. And Government, along with a BBC that has increasingly operated as state broadcaster during the crisis, seems to issue statements and information based primarily on their likely effect on behaviours, rather than on their accuracy.

I have mixed feelings about all this. I can actually understand and to some extent support the ‘behavioural’ approach taken by the government and the BBC. The last thing we need now is irrational optimism leading to reduced compliance with government restrictions. Even George Orwell saw the value of propaganda in war time; and if the enemy today is complacency and lockdown fatigue, then we cannot be surprised if the government uses every means to keep it at bay. 

But this approach has shaken or even corroded my faith in institutions (a faith that may have been too blindly given in the first place). I have always listened to politicians through a sceptical filter, but that filter is now applied to scientific advisors, academics and BBC journalists. Hearing them, I no longer simply expect to become better informed, but at some level suspect that I am being played, that the aim of the communication is behaviour modification (“a call to action” – or more likely inaction, these days) not enlightenment. 

Scepticism may be healthy, but when faith in institutions is eroded, all sorts of wild flights of fantasy can take its place. To paraphrase a quote attributed to GK Chesterton, when people stop believing in institutions, they don’t believe in nothing, but can believe in anything. Behaviour change communication may be entirely benign in intention, but it also risks fuelling conspiracy theories and sweeping distrust of experts. 

Meanwhile, I go back to the data, clicking on the charts every afternoon, trying to keep both optimism and pessimism in check as the pandemic rolls grimly on.

 

Against declinism

Jointly with Mark Kleinman

[First published on Kings College London blog (also at Centre for London blog and OnLondon, w/e 24 January 2021]

London enters 2021 in a very different mood, not just to last year, but to much of the zeitgeist of the last 30. There were fireworks on the Thames on new year’s eve, but no crowds were watching in the streets and parks. The mood of the impressive light and sound show was one of resilience and solidarity, rather than unbridled confidence. As with the opening ceremony for the 2012 London Olympic Games, praise for the National Health Service took a central role, but the tone was less celebratory than seriously grateful.

London has suffered badly, both from the health and the economic impacts of the pandemic, as can be seen in The London Intelligence Economic Tracker. As we write, the NHS in London and throughout the UK is again straining under pressure. The emerging labour market evidence shows a particularly severe downturn in London. The Greater London Authority (GLA) Economics team report that the number of workforce jobs fell 3.8% (229,000) in the capital between March and September – a far greater fall than for the UK as a whole, at 1.8%. They go on to say that while in the earlier stages of the pandemic, there were only modest changes in headline labour market statistics relative to the large falls in activity, this has changed more recently, with large movements in London’s unemployment rate. In the three months to October, the unemployment rate rose a record 1.2 percentage points to 6.3% in London – the largest quarterly rise since the series began in 1992. Only the North East region has a higher current unemployment rate than London, at 6.6%.

As we hobble through the next few months, bigger questions are being asked about the future of cities and of London in particular. Will the “urban age” of big cities leading global trade and growth return? Or does the future lie in more dispersed and fractured economic activity, as globalisation falters, global travel slows and/or the benefits of agglomeration are outweighed by the convenience and safety of working from home?

The debate has been growing in recent years about whether we have reached “peak London”, whether the city’s phoenix-like recovery from post-war deconcentration and urban flight has run out of steam. Like waves of pandemic infections, the turning point of cities’ fortunes are more easily visible after the event: nobody really expected London to start growing again in the mid-1980s.

Population growth has been slowing in London over the past three years. Moreover, recent analysis of Labour Force Survey data by Michael O’Connor and Jonathan Portes suggests that London’s population could have fallen during the pandemic by as much as 700,000 – a huge turnround. And consultants PwC recently forecast a 300,000 person decline by the end of 2021. These are only estimates and projections, and of course much of this change might be temporary. Will 2020 prove to be a blip, reflecting the extraordinary circumstances of the pandemic, or will it be another inflection point like 1987?

The latest demographic projections issued by the GLA in November 2020 forecast a return to growth – though at a slower rate than the past decade, when London’s population grew by almost 90,000 every year. Their “central projections” anticipate growth of around 50-70,000 people per year instead, with the next two years at the lower end of this scale. This would lead to a potential population of around 11 million by 2050 (compared to just under 9 million in 2019).

Population growth is driven by two factors: migration and natural increase. In the year to mid-2019, London’s population was estimated to have increased by 54,000. This consisted of net of 77,000 people to London from overseas, net movement of 94,000 people from London to the rest of the UK, and a net increase of 71,000 people from the balance of births and deaths.

The GLA’s central projection assumes that international migration will be suppressed for the period to 2022, but will then bounce back to average 95,000 (net) every year. The GLA’s expert panel felt that on balance, future reductions in migration are more likely than increases. However, they advised against discounting the possibility of higher levels of international migration, pointing to the resilience of international migration; the possibility that new immigration rules may result in foreign nationals settling in London for longer, and potential reductions in emigration rates of UK nationals in post-Brexit Europe.. The projections also suggest that net domestic migration to the rest of the UK will return to around 100,000 per year by 2030. So most of the projected growth will be fuelled by resurgent natural change (births minus deaths), which has fallen since 2010 but is forecast to stabilise at around 60,000 per year. London will continue to see a rapid churn in population, but its growth will be fuelled from within.

Similarly, the GLA project continued economic growth over the longer term. Their economic projections anticipate contraction and jobs losses in 2021, followed by recovery in 2022, with economic output (GVA) exceeding the 2019 peak by 2022, and the number of jobs in 2022 just reaching the peak of three years earlier. Beyond that, the implication of GLA and other forecasters’ cyclical and trend analyses is for the London economy to resume previous levels of growth, both in output, and perhaps to a slightly lesser extent, employment.

How credible is this? London’s position as a leading global city has taken a hit from Brexit and the UK’s management of coronavirus, but the city is still in a potentially strong position, with strengths in tech, green innovation, financial and business services, education, arts and culture. London needs to remain open and inviting, through immigration policy but also through nurturing and restoring its wounded cultural and hospitality sectors – the “soft power” foundations of its global appeal. The UK as a whole will continue to need London, as a driver of economic growth, for its fiscal contribution and as its gateway to the world. Brexit, and the UK’s potential isolation outside the major trading and economic blocs, makes London’s role more rather than less important.

How much does the government understand this, and will it commit to the infrastructure and other support needed for London to continue to grow? The signals are mixed: national planning policy is now focused on concentrating growth in cities, and the government’s latest algorithm envisages London building more than 90,000 homes every year – many more than the Mayor’s London Plan proposes, the GLA’s projections would imply, or that London is actually building at the moment.

Given this expectation, and the economic importance of London and South East, you would expect the government to want to invest in the capital’s infrastructure. But worryingly, in the National Infrastructure Review last November, the government suspended support for Crossrail 2, the next phase of major transport infrastructure investment in London, beyond safeguarding work. As Alex Jan has commented, Crossrail 2 is “pretty integral” to the London Plan, though all major infrastructure projects have their ups and downs – Crossrail 1 was first mooted in the 1970s, with roots in the Abercrombie Plan of 1944. Government commitment to “levelling up” regional imbalances in the UK is welcome, but this should not happen by starving the capital of much-needed public investment.

We will not know for some time whether short-term population and economic decline are temporary diversions or longer-term redirections of London’s future. We do not know whether 700,000 people really have left London over the last year, or whether and how quickly they may come back. And we do not known how far recovery from the crisis could see some rebalancing of activity within London and the wider South East. We know, in short, that there are still a lot of unknowns.

But public policy should shape the future rather than just responding to it (a core proposition of Centre for London’s London Futures programme), and governments should be wary of drawing conclusions about long-term trends from short-term disruptions. London’s potential for growth should be nurtured so that the city can work better for all its current citizens, as well as the two million more who could arrive in the next 30 years, and so that the capital can support recovery across the UK.