covid – Richard Brown

Back to work

Londoners have been slow to get back to their desks compared to workers in other large cities, according to Return to the Office, the latest report from think tank Centre for Cities. Why is that, does it matter and what can be done?

The report’s polling, carried out in June, finds that central London office workers are spending an average of 2.7 days per week in the office, less than their counterparts in Paris, New York and Singapore, though pretty similar to those in Sydney and Toronto. As in those other cities, their office days are concentrated in the middle of the week, with London showing the sharpest drop-off on Fridays, when just 40 per cent are traveling in to work.

London’s sluggish return is explained by two main factors, the report suggests. On the management side, London bosses seem more reluctant than those in other cities to specify when workers need to be in. And while workers and bosses alike value the chance to develop relationships and collaborate in person, London’s workers particularly also appreciate the cost savings and time flexibility offered by working from home – more than those in other cities.

The Centre for Cities findings reflect those of the King’s College Policy Institute’s London Returning survey of 2022. This found that most London workers felt positive about being in the office, but that 80 per cent said that avoiding the commute, its costs and its time demands was a good reason to continue working from home.

London government has sought to address this issue through the “Off Peak Friday” trial that ran from March until May on Underground, Overground, DLR, Elizabeth line and some National Rail services. It led to a modest increase in commuting on Fridays, but awareness and take-up was limited. Speaking at the Centre for Cities launch event on Tuesday evening, Deputy Mayor for Business Howard Dawber said City Hall was still mulling the outcomes of the trial.

However, while London commuting costs are high compared to most of the other cities in the study, I suspect the bigger problem lies outside the capital. On commuter lines beyond Sadiq Khan’s control, both expense – despite the paltry savings offered by flexi season tickets – and chaotic performance, worsened by rolling strikes in recent years, make a trip to London a pricey roll of the dice.

These costs and inconveniences may explain one area where London bucks the trend: in London, unlike the other cities, younger workers were spending most days in the office and saying they work most effectively there. They are also the workers most likely to live in London, while many older ones commute in from the Home Counties – a trend that was accentuated during the pandemic – or at least used to. Anyone who has joined an online call with younger workers balancing laptops on washbasins in shared flats with iffy WiFi while older workers dial in from their immaculately-restored half-timber country cottage may understand why the former are keener than the latter to get back.

At the launch event, panel members Dawber, Kat Hanna (Managing Director at Avison Young) and David Wreford (Partner at Mercer) agreed that the return to the office seemed to have plateaued in London, and that the pandemic had accelerated and intensified trends towards more flexibility. But there was less consensus among panellists and audience members on whether this was a good thing, and about what if anything could be done about it.

A fundamental question was, against the backdrop of government’s “Growth Mission”, how does hybrid working affect productivity? Intriguingly, Return to the Office finds that most workers could see individual productivity benefits from working at home, but were concerned about the long-term impacts on skills, pay and promotion prospects, all of which affect organisational productivity. The skills gap could particularly affect younger workers, unable to learn from working alongside more experienced staff, if the latter continued to stay home for most of the week.

The evidence on productivity is still emerging and tentative, though face-to-face interactions and proximity are the lifeblood of the agglomeration benefits that cities offer – even if these apply more for some teams and some sectors than for others. The report recommends that more research be done on the productivity impacts of hybrid working, but the risk is that we will only know the impacts when looking in the rear-view mirror; that we won’t know what we’ve got till it’s gone. So we need to make some informed judgement calls and watch for early signs of long-term effects.

In the meantime, more flexible working patterns were transforming working life for people with caring responsibilities – generally women, who the London Returning survey found were more positive about working from home and more reluctant to be told to work more days in the office. Reduce flexibility and these workers might once again be excluded from the workforce. The Mercer research confirmed this, Wreford added: women were most likely to switch or stay in jobs as a result of flexible working incentives, while men were more likely to be motivated by financial rewards.

Furthermore, while parts of central London’s economy were struggling with new work patterns, suburban areas might be thriving (though ONS analysis suggests local spending patterns have returned to their pre-Covid levels). And Hanna observed that a broader shift to mixed use might strengthen central London’s offer as a place of leisure, as well as work: “It’s called the Central Activities Zone; that doesn’t tell you what those activities need to be.” While peak hours Tube use remains below 2019 levels, evening and weekend riderships are already higher, suggesting that London’s offer to visitors – short and long distance – is stronger than ever.

Finally, what, if anything, should be done to change the situation? Mayor Khan wants central London to be busy, Dawber said, but can only offer incentives and encouragement. British bosses are reluctant to impose tougher “back to the office” mandates according to the polling, and government policy is pointing in the direction of more flexibility, not less.

So, is this the much discussed “new normal” – neither citypocalypse nor a snap back to the heady days of February 2020? It may be an equilibrium for the moment, but perhaps not a stable one. As panellists noted, climate change and artificial intelligence may dramatically change where, how and by whom office work is performed in the future. We may be only at the beginning of a period of rapid change.

First published by OnLondon.

Boomer Boom Bang-a-Bang

London’s population reached a historic high of 8,945,300 in the middle of last year, according to new estimates released by the Office for National Statistics. After slower growth at the end of the 2010s and a slight decline between 2019 and 2021, the number of people living in the city rose by 0.9 per cent – around 75,000 – between 2022 and 2023, the fastest growth rate since 2015-16.

Does this suggest that London has escaped the twin shadows of the Covid-19 pandemic and Brexit and is returning to its turbo-charged growth of the late 2000s and early 2010s? Well, maybe and up to a point.

Certainly, the capital has defied some of the more apocalyptic predictions that emerged during lockdown – of the age of cities stuttering out in an “urban doom loop”. But it is still growing more slowly than other UK regions and metropolitan areas, most of which grew by one per cent or more in 2022-23. London’s growth rate is in fact more like what other regions were experiencing ten years ago, when the capital’s population was surging by 100,000 or more every year – a growth rate of up to 1.4 per cent.

London is also growing a bit more slowly than experts forecast. The mid-2023 estimate is very slightly lower than that of the most cautious Greater London Authority (GLA) population projection, which was based on the 2021 Census and projecting forward the slower growth trends from 2017-21.

Borough patterns suggest a mixture of recovery and longer-term trends. In some places, the return to growth looks like a post-pandemic rebound. This is most notable in Camden, which saw one of the steepest declines in population at the beginning of the pandemic but has now more than recovered, with 2.9 per cent population growth between 2020 and 2023.

But there appear to be broader trends operating too. Hillingdon, Tower Hamlets and Newham have each shown persistent growth, adding at least four per cent to their populations between 2020 and 2023. On the other side of the equation, Lambeth, Lewisham, Haringey and Waltham Forest all have populations that remain two to three per cent below their pre-pandemic levels.

Even if London’s growth has slowed, its population dynamics remain distinct from those of other parts of England and Wales. The capital continues to see much higher international inward migration (around 154,000 in the year to mid-2023) and domestic outward migration (130,000 in the same year) than other regions.

The capital’s population is also buoyed by natural change – the surplus of births over deaths – which accounts for growth of 50,000 in the year to mid-2023. Meanwhile, across England and Wales this has dwindled to nothing or gone into reverse, with as many people dying as being born for the first time in 42 years.

London is still younger than average (both a factor in and a result of its natural growth rate): its median age is 35.9, compared to 40 or older in every other region in England and Wales. The age groups that have seen the fastest growth since the pandemic abated (2021) are people in their twenties and in their sixties. However, longer-term (since 2011) the twenty-something population has declined, and the fastest growth has been among Londoners in their fifties and sixties – maybe those who lucked out by buying property in the 1980s and 1990s.

International comparisons suggest that London is not alone in its population growth patterns. Slow recovery is the norm following Covid, and other large northern hemisphere cities were already seeing a slowdown before 2020. US Census Bureau estimates suggest that in 2023 New York City’s population was still six per cent below its April 2020 total, though population loss is slowing. Paris has also seen a long-term decline, largely as a result of falling birth rates, which accelerated during the pandemic.

Cities have not gone away, but their slow recovery perhaps reflects the unexpected “stickiness” of changes in working habits and a sedate return to international migration patterns. If that is so, London’s slow growth may just be a delayed bounce-back. Comparisons with the GLA projections suggest this might be the case: those projections modelled growth slowing in 2022-23, whereas in fact it speeded up.

It may also be that growth is constrained as the cost of living in the capital remains sky-high and London struggles to meet the London Plan’s housebuilding targets, let alone the more ambitious goals suggested by the last government and think tanks such as Centre for London.

This should be a cause for guarded optimism. If policy and delivery are constraining growth we can turn that round, adopting the “Get Britain Building” mantra of the new government. London can build its way back to sustainable growth as a liveable and exciting destination for UK citizens and international visitors – provided of course that other measures, such as arbitrary immigration restrictions, do not stifle the UK’s world city.

First published by @OnLondon.

Drifting back

After the turbulence of recent months, many Londoners will be hoping for a return to normality, albeit under the shadow of a cost-of-living crisis and a looming recession. But is the city’s office economy returning to pre-pandemic patterns of commuting and working, or have we settled into a “new normal” of hybrid working, empty office blocks and diminished city centre businesses?

London’s streets certainly seem busier, and on the days that they are running, so do London’s tube trains. This is borne out by Transport for London data: trip volumes have been increasing since the summer and now average around 80% of pre-pandemic levels. There are some spikes and dips to this trend, (such as Jubilee celebrations and bank holidays elevating usage, and strikes and heat waves reducing it), but Tube use is now just 20% below pre-pandemic levels.

There is a persistent rhythm emerging too. Weekends are still busiest, with nearly 90% of pre-pandemic trips. Monday, Tuesdays and Fridays are quieter with averages of 65-70%, and Wednesdays and Thursdays slightly busier with averages of 70-75%. However, since the beginning of September, the recovery in trip numbers has been particularly sharp around the City of London and Canary Wharf, suggesting that an increasing proportion of passengers are office workers, as opposed to leisure visitors or workers in other sectors.

Other figures confirm the impression of a gradual return to offices. Remit Consulting have been collecting data on office occupancy throughout the pandemic, based on access control systems (swipe cards and so on) from a sample of around 150 large office buildings in the UK. After advice to work from home was lifted at the end of January, office occupancy figures rose quickly to around 25% and stayed at that level throughout the summer, but since the beginning of October have climbed above 30%.

Remit estimate that “normal” office occupancy levels were 60-80 % before the pandemic, so 30% occupancy in fact equates to offices being around “half full” on the average day. Remit also have a more detailed breakdown by London office ‘submarket’ which shows West End offices back to around 42% average occupancy in October, with City and Docklands offices lagging behind.

Further west, in the SW1 corridors of power, offices are busier. When Jacob Rees-Mogg told civil servants to return to their desks in April, there was an immediate, but amusingly short-lived, effect on behaviour. Office occupancy leapt up from a departmental average of less than 50% of capacity, hitting 65% in mid-May, but had fallen back again by the end of that month.

Jubilee celebrations, summer holidays and industrial action kept numbers low over the summer, but occupancy has been back above 65% since the beginning of October. This is not far off pre-pandemic levels – though to be fair there have been an awful lot of ministers to clap in and out of Whitehall offices over the past few weeks.

While the higher levels of civil service return may reflect a tougher line from ministers, it seems that the return to offices has in fact gathered pace just as politicians and newspapers stopped demanding it. But it remains a trickle rather than a surge. Where do we go from here?

Many workers welcomed more flexible working, and are keen to retain its benefits. The survey commissioned by Kings College London this spring as part of their Work/Place project (on which I worked) found London workers embracing hybrid working patterns enthusiastically: 61% reported hybrid working, defined as working from home at least one day a week (compared to less than 20% before the pandemic). A further 13% worked only from home.

Workers expected the changes to stick too: 75% said they were “never going back” to a five-day week in the workplace, with three days a week at home the most popular option. The results of a second phase of the King’s survey (undertaken in the summer) are due to be launched at a joint event with Central London Forward next week, so we will have some idea of whether these views have shifted over time.

But there is a big difference between these workers’ expectations and those of employers. The UK-wide Business Insights and Conditions Survey found that the proportion of employers (weighted by employee numbers) planning to use home-working as a permanent part of their business model rose from 16% in October 2021 to 24% in May 2022. It was much higher in the ‘office-based’ sectors (professional, scientific and technical services, and information and communications) that account for around one in five London jobs.

However, in the latest wave of the survey (August 2022) that proportion appears to have started to fall across the board, suggesting that bosses may be becoming cooler about long-term home-working (a finding which seems to be mirrored in trends tracked by the WFH Project, a consortium of north American universities).

This gap between employer and employee expectations suggests that we have not yet reached equilibrium. Hybrid working certainly poses challenges – both for planned communication within and between organisations, and the “watercooler moments” of serendipity and casual interaction that form the foundations for corporate culture. Mixing digital and real-life interaction is tougher in many ways than the world of universal home-working during the pandemic.

Over time, new ways of working may diminish or overcome these challenges – through enhanced technology, or changes in culture or behaviour. Managers may tighten rules to ensure that teams can meet effectively and to prevent working from home becoming a perk for those with the privilege of controlling their own workflow (at the moment, it is overwhelmingly concentrated in more senior managerial and professional roles), or conversely to prevent a culture of office attendance and preferential treatment for those (mainly male) workers without caring responsibilities.

But as the recession bites, employers may feel emboldened to push for more presence in the office. There are already stories of companies such as Meta (formerly known as Facebook) retreating from the highly permissive approach they took during the pandemic, and some bosses may share Elon Musk’s views about home-working if not his cack-handed approach to employee relations. Even if returning to the office is not mandated, the threat of redundancy may boost presenteeism although, alternatively, tighter economic times may push employers to seek savings on property costs.

There may also be some polarisation: primarily remote working may become the norm in some sectors or companies, while being in the office becomes more established in others. The King’s College research showed that the biggest increase in home-working was among those who were already working from home at least one day a week before the pandemic.

Where more people are in the office, “fear of missing out” – on advancement, on collaboration, on gossip – may draw even more people in. Conversely, where online meeting and collaboration tools are the norm (perhaps augmented by periodic spells of intense in-person collaboration), employees will respond accordingly – not just in their daily habits, but in long-term decisions about where they live.

London’s office economy has not yet returned to its pre-pandemic state, but nor do I think it has settled into a “new normal”. Huge challenges for the real estate sector and the ecosystem of city-serving businesses remain, and some of these will be discussed at the King’s College/CLF event next week. But the future looks less bleak than it did during the pandemic, and any case for stripping back transport seems much weaker than it might have done even a few months ago. The debate about Crossrail 2 even seems to have restarted. Reports of London’s demise look to have been premature at best.

Originally published by OnLondon.

9 to 5?

With Cristian Escudero

How many people are working from home, and how many have returned to the office? The answer to this – apparently simple – question is surprisingly complicated.

Estimates have varied – as the pandemic has waxed and waned, as government guidance and regulation has changed, and as different surveys have asked subtly different questions. As part of a new project at King’s College London, Work/Place: London Returning, we have been comparingthe different surveys and what their results tell us, alongside our own Wave 1 Work/Place survey of London’s workers.

Although the headline figures emerging from the various surveys have varied, one feature has remained consistent throughout: London’s experience has been different to the rest of the UK’s. The capital saw more people furloughed at the beginning of the pandemic, and has persistently had more people working from home. For example, in its 2020 round of interviews, the Office for National Statistics (ONS) Annual Population Survey (APS) found that 37 per cent of London’s workers had worked at home the previous week, compared to 26 per cent across the UK. In January to March 2021, the ONS Opinion and Lifestyle Survey found that up to 65 per cent of Londoners and 46 per cent of people across England had worked from home as a result of Covid the previous week. In late March 2022, the same survey showed that around 26 per cent of the UK population worked from home, while 37 per cent of Londoners did. Most recently, in July 2022, ONS analysis showed London had seen sharper rises in homeworking, and bigger drops in commuting from out of region, than any other English regions between late 2019 and early 2022.

Remote working has always been more prevalent in London: APS data shows that 18 per cent of London’s workers had worked from home in the week prior to interview in 2019, compared to a UK average of 12 per cent. But why are people who live and/or work in London (the groups are similar but not the same) so much more likely to work from home, and are they likely to return to the office over time?

There are some factors that enable London’s workers to work remotely and there are others that encourage them to do so. More London workers can work remotely because of the industries they work in. As our paper sets out, many more Londoners work in professional services, and information and communications roles – for example, as lawyers, accountants, consultants, TV producers, IT consultants, architects. These jobs accounted for 22 per cent of London employment, but only 14 per cent across England. These were also the jobs that switched online most easily: in January 2021, employers in England estimated that 44 per cent of professional services workers and 59 per cent of information and communications workers had been working from home in the previous two weeks.

By contrast, in sectors such as hospitality – which rely heavily on face-to-face contact and account for a similar proportion of jobs in London and across England – nearly 75 per cent of staff were on furlough at that time. London’s workforce split between the workers who took their work home, and the workers whose work vanished as commuters and tourists stayed away, which also explains why the capital had both the most resilient productivity, and the highest rises in unemployment during the pandemic compared to other English regions.

Industrial structure accounts for some but not all of the difference. The effect is compounded by occupational structure: 62 per cent of Londoners worked management, professional or associate professional jobs in 2021, compared to 50 per cent across England. Around 40 per cent of people doing these jobs worked from home for at least one day the week before they were interviewed in 2020, compared to caring, skilled trade and customer service jobs, where 10 per cent or fewer reported doing so.

These features of London’s workforce help to explain why Londoners and London’s workers (overlapping but distinct groups) can work from home; the Work/Place survey also sheds light on why they are choosing to do so – at least some of the time. The survey found that the costs of commuting, and the time it takes, were the leading factors behind home-working. While respondents valued the flexibility of working from home, they did not dislike their office environment – on the contrary, many valued the sociability and buzz of their London workplace – but disliked the time and expense of daily commuting.

Commuting is a big cost – in terms of time and money – for people living and working in London. Labour Force Survey data for London boroughs showed their residents commuted an average of 39 minutes each way in 2016, compared to 28 minutes for other English local authorities, and showed similarly lengthy commutes for people living in commuter districts such as Chiltern, Dartford and Elmbridge. One London PR agency has estimated that commuting can cost £8,000 or more every year, when additional childcare costs are added to season ticket costs – equivalent to 22 per cent of the average PR salary after tax.

London workers have both the capacity and incentives to work from home, at least some of the time, and the fact that leisure visits have been recovering faster than workplace visits suggests that it is long-term changes in habits rather than short-term fear of infection that is influencing behaviour. Against this backdrop, it is unsurprising that our Work/Place survey found that only a minority think that the five-day commute will return. For the moment, the preference seems to be for hybrid working, with around 45 per cent of London workers viewing two to three days working from home as optimal. Culture and practice will shift the dial one way or another in specific organisations and industries, as would government action on the costs of commuting and childcare, but our research suggests that the impact of the pandemic on London’s work patterns has been significant and will be long-lasting.

First published by Kings College London.