While we wait for the forever-delayed Levelling Up White Paper, a “levelling up mindset” is starting to take hold across Whitehall. Just before Christmas newspaper reports suggested that the latest Department for Work and Pensions review would explore whether pensions could be paid earlier in areas with lower life expectancy.
It is an intriguing idea. There are big differences in life expectancy across England. Between 2017 and 2019, a man born in Richmond-upon-Thames could expect to live in good health for nearly 72 years – almost 20 years longer than a man born in Blackburn. A woman born in Wokingham would have a similar advantage over one born in Nottingham.
But it’s a bit odd too. Faced with these yawning inequalities and the worrying fall in healthy life expectancy since 2014-16, you might think that addressing the causes of ill health and early mortality would be the focus of policy, not making sure everyone gets a comparable return on their national insurance contributions.
Allowing people to take their pension earlier in some parts of the country could also have strange consequences. Is a workforce that has been shrunk through early retirement really what economically disadvantaged places need? Would a wave of pension-seekers moving to northern seaside towns really act as a catalyst for revival?
But there is a bigger problem too. Health inequalities can be just as sharp within as between regions or even local authorities: data at “middle super output area” (MSOA) level show that in Kensington & Chelsea there is a 25-year gap in healthy male life expectancy between North Kensington and the area around Sloane Square. If we really want to target earlier retirement dates at those areas where people are likely to have least time to enjoy their pensions, should we not be looking at individual wards and MSOAs rather than large geographical areas?
Of course we won’t be doing that: such a system would be fiendishly complicated and deeply unfair to poorer people living in wealthier neighbourhoods. But it does highlight one problem with the levelling up debate. Health and other aspects of inequality are often presented in terms of geographies because we have good data collected on a geographic basis. But geography is not necessarily the primary issue, as anyone who has seen the wealth of the Vale of York or the poverty in north Westminster will attest.
This is not to say geography is irrelevant: the 2020 Marmot Review of health equity argued that, while life expectancy in richer places was pretty similar across the country, poorer places in London had better life expectancy than poorer places in the north. The review suggested that a mixture of economic and policy factors (particularly the impact of austerity) had hit northern areas particularly hard and had therefore widened the gap since 2010.
But the Marmot analysis is still comparing places – which in London contain a diverse mix of people, and may have become more mixed in recent years – rather than classes of people. Londoners on the poverty line may be only a block away from an artisanal coffee shop, but that may not help their health or other life chances.
There is research indicating links between income and health (for example, people in the poorest 10 per cent of households are ten times more likely to report poor health than people in the richest households), but it is more scanty. Most research on health inequality (and other forms) continues to use place as a proxy for a whole suite of characteristics that may offer or deprive particular people of opportunity.
My hope for 2022 is that we develop a more nuanced discussion of “levelling up”. I think this means southerners acknowledging that there are regional imbalances that do need addressing. I’d suggest that two of these are the need for investment in strategic transport schemes (rather than the apologetic bodge-job of the Integrated Rail Plan) and in research and development. But it also means that we shouldn’t make the mistake of assuming that every inequality is primarily regional in character when that may simply be a result of the basis on which we collect and publish statistics.
“Did you really just tell Richard Rogers to buy you a pint of Guinness? Do you even know who you’re talking to?” my partner Alex said down the phone.
It was 2001, and I was following Richard into the Marquess of Granby, round the corner from the Mayor of London’s temporary offices in Marsham Street. I had just started working with Richard and knew he was an eminent architect, but don’t think I got quite how important he was to a whole generation of architects and designers (of whom Alex is one).
That’s probably a good indication of why I’m not the right person to write an appreciation of his buildings, even though I had rushed to see Centre Pompidou in Paris on a teen holiday with two schoolfriends, a sole moment of cultural enrichment in a week that passed in a haze of gauloises and gut-rot red. His best buildings are effervescent with ideas, imagination and delight, engaged in playful if sometimes spikey dialogue with their surroundings, and opening their arms wide to users and passers-by. I find them entrancing to this day.
But I’m not going to write about them here. I want to write instead about working with and becoming friends with a truly incredible man.
Nicky Gavron, London Assembly member and tireless advocate for better urban planning, had brought Richard into see the newly-elected Ken Livingstone. Ken waved a copy of Richard’s Urban Task Force report, which had been published the previous year, saying “I want you to do this in London.” I had been working in the Mayor’s Office, and Ken asked me to work with his new Chief Advisor on Architecture and Urbanism (“Big Richard and Little Richard!” he grinned) to make that happen.
Together with Ricky Burdett, Director of LSE Cities, and Gale Valentine, we set up shop as the Architecture + Urbanism Unit (A+UU), recruiting Mark Brearley, John Fannon, Emily Greeves, Jamie Dean, Tobi Goevert and Eleanor Fawcett. Richard had been an advisor to the Mayor of Barcelona, whose City Architect was a powerful figure overseeing large departments, and saw this as his model. We didn’t have the battalions for that, so had to persuade him to adopt a more subtle approach. We tried to intervene selectively in projects being promoted by the boroughs, Transport for London and the London Development Agency to push them to a better place, “catch and steer” in Mark’s phrase.
Faced with the trundling beasts of public sector procurement, Richard often became frustrated (“Where are my million trees? Where are our 100 Public Spaces?”), exploding that he was wasting his time, or more amiably deciding he had had enough, and we all needed to go out for lunch or to the pub. He took no salary, but came in two days a week, chasing progress but also deploying all his skill and persistence at meetings with the Mayor and other bigwigs – to do deals on how architects would be selected and briefed, on what role design would play in the planning process, on how east London could fulfil its promise.
He stuck with it too, continuing to harry projects long after the rest of us had sounded the retreat, and showing patience and persistence with a bureaucracy that could be unfathomable even to insiders, where other architects would have packed up and retreated to the studio. Quite often, he would ask me to draft him a ‘tough’ (favourite term) note to the Mayor, demanding a project be stopped or an official sacked. As is the way of bureaucracies, these notes would then find their way back down to me from the Mayor’s Office, with a request for me to draft a response for the Mayor to sign off. I could keep these correspondence volleys going for weeks.
From 2004, I became increasingly involved in the London 2012 project, so saw less of Richard for a few years. A characteristic encounter was at the Venice Architecture Biennale, where he was awarded a Golden Lion in 2006. We greeted him in the street, and were scooped up and led to a lunch in a wood-panelled restaurant, down a side street I have never found since.
Flying back that evening, we were on the same plane as Richard and Ruthie, though they were in Business Class. I said hello as we got on, and expected they’d be long gone by the time we got out – that’s why you pay for Business Class after all. Instead, I found them waiting as we came through baggage reclaim, to see if we needed a lift anywhere. When we got into the Addison Lee, Richard told the driver “Chelsea, via Brixton.” The driver muttered that Brixton wasn’t really on the way to Chelsea. “It is now,” replied Richard with a familiar mix of charm and steel which precluded much argument.
Richard continued to advise Ken, and then Boris Johnson for a couple of years, though took less of an active role as the A+UU morphed into the larger Design for London, headed by Peter Bishop. I think Richard saw his time at the GLA as something of a missed opportunity. We did not build his 100 public spaces or plant his million trees, and City East did not transform Docklands.
This is all true. But, as I said to him, those concepts had a long afterlife, and the cultural changes in how design and planning are done in London government were subtle but profound. The legacy of A+UU is still there in the current Mayor’s Good Growth by Design programme, in his panel of ‘Design Advocates’, in boroughs’ design review panels, in the Public Practice scheme that places newly qualified architects in public sector jobs, and in the inspiration he gave to a generation of planners.
After Richard left the GLA, I started working with him again, intermittently helping him to write articles or letters to the papers protesting against suburban sprawl, against toy town designs, and against the impact of austerity on the public realm – the ‘Continuity Urban Task Force’ as I used to call it. And it was very hard to pay for a meal at the River Café if he spotted us eating there. Richard enjoyed the good life – the River Café, the holidays in Mexico and Italy, opera and art – but he sought to share it as widely as possible, and was genuinely upset and angry when people were denied access to decent housing, food and healthcare.
In 2013, the Royal Academy hosted Richard Rogers: Inside Out, an exhibition that was as much about Richard’s political and civic beliefs as it was about his buildings. This caught the interest of Katy Follain, an editor at Canongate, and she asked Richard to write a book with the same blend of the personal, professional and political. I was trying to find something new to do after ten years on the Olympic treadmill, so was flattered when Richard and Ruthie asked me to help (especially given Canongate’s offer of some real writers).
The experience was hard going to begin with, when some early draft chapters came back covered in red scrawl. Richard’s dyslexia may have meant that he struggled to write long-form prose, but he knew what he wanted and knew what was good. We played around with structure, between timelines and topics, and ended up with a book that started narrow – focusing on a boy’s birth in Florence and his arrival in cold grey England in the 1930s – then widened its scope, using projects as jumping off points for discussions of urban development, public space, politics, inequality.
At first, Richard was reticent about the autobiographical elements; he wanted to look forward not back. But over time, he relaxed into the process, with long interviews where he reflected on his life, influences and ideas, recorded in his house in Chelsea, in his Hammersmith offices, on the terrace of the Tuscan farmhouse he and Ruthie rented every summer. The conversations were inspiring, a comfort to me as my own parents slid into ill-health, and often great fun. One taped interview, on the train back from Manchester after a party conference, starts structured and gradually dissolves into giggles as the free Virgin Rail Rosé takes effect.
As the chapters of A Place for All Peoplewere edited and finalised, Richard turned his attention to the design. I think Canongate were used to authors who would turn over a manuscript, fret a bit about the cover photo, then shut up until the proofs arrived. Richard had other ideas. He called up Andy Stevens, the graphic designer who had worked with him and his son Ab on the Inside Out exhibition design, and negotiations with Canongate began (Tracing paper? No. Different coloured papers for different sections? No. Spiral binding? No.) Once a format was agreed, pages would be laid out and reviewed again and again, by Richard, Ruthie and Ab, until Richard was happy with the flow and interplay of the textual and photographic narratives.
And this, I think, was at the heart of Richard’s genius. He was notoriously bad at drawing and struggled with writing, but he had brilliant ideas, acute judgement, and – an overused word but right in his case – a vision for what places and societies could be. He searched out the right partners and collaborators, and used all his powers of charm, persuasion, encouragement and menace to bring out the best in them and make the results of their work together as good as it could be.
Richard was so full of life, so endlessly curious, so excited about the possibility of a better world, and so tireless in trying to bring it about, that the world seems to have lost a little of its colour with his death. I’ll miss him enormously.
As autumn sets in and Covid case numbers drift upwards, there is some good news for Londoners. Having been hit hardest by the first wave of infections, the capital now has some of the lowest case numbers. On 18 October, out of 315 English lower tier (unitary and district) councils, the ten with the lowest case rates were all London boroughs (except where indicated, all data in this article have been downloaded from the excellent Government dashboard).
This isn’t to downplay the terrible effect Covid has had on London. The disease has already killed more than 20,000 people in the capital, and has had a particularly brutal impact on poorer and disadvantaged communities. However, unlike March 2020, when cases shot up in the city and widespread urban flight was predicted, today you are safer from Covid living in Inner London than almost anywhere else in the UK.
This is good news, but it’s not immediately clear why London cases are so low. While the capital has the highest levels of antibodies according to the latest Office for National Statistics (ONS) survey, it also appears to have the lowest vaccination rates. The ten English lower tier authorities with the lowest vaccination rates by 14 October were all in London, and are many of the same boroughs that also have low infection rates. I’ve been wondering how we can account for this, without making spurious assertions about vaccine effectiveness.
Vaccination is not the only way to acquire immunity, so Londoners’ early exposure to the virus will have made a difference. London’s cumulative case numbers are equivalent to around 12.5 per cent of the population, which is higher than the other southern English regions, but lower than the Midlands and North. But in the early days of the pandemic, most cases were untested and unreported unless people became seriously ill, so London’s total cases have almost certainly been underestimated. By July 2020, 13 per cent of working age Londoners were already estimated to have been exposed to the virus, twice the national average.
However, there are also issues about how vaccination rates are calculated. Most Covid statistics use the 2020 mid-year population estimates as their denominator, but vaccination rates use the National Immunisation Management Service (NIMS) database. Reputable commentators have suggested that this database, which has been credited for supporting the rapid roll-out of vaccines, tends to overestimate populations of working age adults – particularly young adults and students, who are most mobile. Using ONS mid-year estimates for 2020 rather than NIMS figures makes a big difference to vaccination rates in London, as shown in the chart below, which shows the position as of 12 October.
(A side note: might the ONS mid-year estimates from 2020 also be wrong? They probably are. Most commentators believe London has lost population over the last year, though estimates vary wildly, from Professor Jonathan Portes’ estimate that around 700,000 people may have left the capital, to the GLA’s more cautious projection that around 100,000 people have done so. If we reduced London’s population by a pretty extreme ten per cent, or around 900,000 people, both vaccination and case rates would be higher, but not dramatically so – though the effect would be greater if population loss was concentrated in the Inner London boroughs.)
What does this all tell us? The first thing, which many of us have learnt over the past 18 months, is to be careful to interrogate statistics, asking what story they are being made to tell and whether there are other stories that might also fit, particularly where there seem to be dramatic differences between places.
The second is to ask why local vaccination rates are being published in ways that seem to make take-up look artificially low in places with younger populations. This might seem trivial, or even a useful nudge for the young and for people in vaccine-hesitant communities to get their jabs, but using questionable data for righteous ends can be toxic. There are enough scurrilous rumours about vaccination effectiveness circulating without allowing people to draw hasty conclusions from the fact that the places with the lowest case rates are also those that appear to have the largest proportions of unvaccinated people.
The figures for deaths in council areas are seven day case rates by date reported, and the deaths attributed to Covid in the capital are defined as those where Covid has been mentioned on the death certificate, as of 14 October.
So many prime ministers have pledged action on social care before recoiling, that I really wanted to celebrate the PM grasping the late summer nettle of reform. But he seems to have brushed casually past it while racing after shimmering mirage of making the NHS “the envy of the world”. Providing a ‘cap and floor’ for personal contributions to care is a good thing. It will reduce anxiety and help protect inheritances for many moderately well-off families, though using workers’ national insurance contributions to do so seems pretty well the least appropriate way of achieving that.
Or almost. State-provided adult social care (which London Councils estimate is 65 per cent of home care and 54 per cent of residential care) is currently funded by London’s boroughs, drawing on government grants, and the dysfunctional ugly twins of local government finance – council tax and national non-domestic rates.
Paying for social care accounted for more than 50 per cent of London borough service spending in 2018/19 according to Centre for London analysis (excluding public health, education and police services). London’s older population and younger population with care needs are both forecast to grow over the next decades, so the costs will rise. When he was chief executive of Barnet Council, Andrew Travers drew a ‘Graph of Doom’ showing social care (including children’s services) gobbling up the whole borough budget by 2030. The £3 billion or so (out of a total of £36 billion) left for reform of the system over the next three years would only just close the funding gap in London. It’s pretty thin gruel.
Even putting the matter of funding levels and taxes to one side for a moment, it makes no sense for the service to be delivered this way. People value social care, and see it as a critical service, but also look to councils for housing, planning, waste collection, street cleanings, park, libraries and schools.
The current model also creates an unhealthy tension between the NHS and social services, as older people are shunted gracelessly between home care, hospitals and residential care. I have heard anecdotes about councils employing full time lawyers to argue against hospital discharges into their care, and (full disclosure) I am personally in the middle of an unseemly haggle with the NHS and social services about who should be providing my mother’s care.
The row over the miserly allocation of funding to social care improvement, compared to the sums lavished on the NHS, illustrates the point. It is artificial to distinguish between the care provided to an old person at home and the care she receives on a hospital ward, not least because if you get the former right, you are less likely to have to pay for the latter.
I am generally all for devolution, but I think this may be the exception. The PM announced that the “NHS and social care systems need to be brought closer together” and talks of “integrated care systems”, but we have been hearing soft phrases like that for years. I think we need to be bolder, and nationalise funding for adult social care.
This does not necessarily mean nationalising care homes and care agencies, though in some cases that might be desirable or even necessary. It should mean tighter regulation to ensure decent pay and more consistently compassionate care. In many cases, services would be provided pretty much as they are now (the NHS is far more used to operating through third-party providers than it was in the past), but decisions would be taken in a genuinely integrated way, where budgets allocations were not the issue.
This is not intended as a criticism of borough social services departments – London has some pioneering boroughs like Hammersmith and Fulham, who are I think the only local authority who levy no charges for home care, regardless of care recipients’ savings.
And the NHS is far from perfect; it has a lot to learn from social services about the management of long-term conditions, which often seems to take second place to the more life-affirming business of ‘curing’ people in hospitals. There would still be a role for local authorities, in managing interfaces with housing and other services, in promoting public health and preventative services, and in acting as champions and advocates for their residents – perhaps through continuing to play a part in assessments of need.
There are elements of today’s announcement that should be celebrated, but it is still tinkering with the system rather than seeking to transform and upgrade arrangements that date back 70 years. There has been a lot of talk about better joint working between the NHS and local government, but progress has been limited in London. I’m afraid that the consequences of missing the opportunity for more fundamental structural change – or at least beginning a debate about it – will become increasingly apparent in the next few years.
Saying that Londoners are underpaid may not win many votes outside the M25, but persistently low pay is a huge problem for the capital and its citizens.
One way of looking at this is to compare Londoners’ salaries to the benchmark set by the London Living Wage (£10.85 in 2020/21), which is calculated as a rate that meets “everyday needs”. The chart below compares this benchmark to London’s 10th and 25th percentile pay rates – that is, the highest pay for the bottom 10 per cent and bottom 25 per cent of earners respectively – for sectors where there are enough workers to enable reliable estimates.
The chart shows where London’s low pay problem is concentrated. Twenty-five per cent of workers in retail, hospitality, admin support (jobs like security guards), social work (bundled with better-paid health jobs above), and entertainment were being paid less than the minimum hourly rate needed to live in London in 2020. Hospitality wages are particularly low: more than 60 per cent of workers in that sector were paid less than the London Living Wage.
There are two other things worth noting. Firstly, low pay may be a national problem, but it is more acute in London. Loughborough University research on “minimum income standards” indicates that Londoners in different household types need between 20 and 60 per cent more than people in other UK urban areas to afford a decent quality of life.
London jobs do pay a wage premium, but this is less than 10 per cent at the bottom end of low-paid sectors such as hospitality, security, residential care work and construction. In other words, the workers who most need the wage premium to live in London are also those least likely to get it.
Second, London’s lowest-paid sectors – industries such as food production (one of the lowest paid manufacturing sub-sectors), hospitality and social care – are some of those with the most acute labour shortages at the moment. (Others shortages, such as of HGV drivers, are complicated by the need for specialist training and licences.) They are also the sectors which have been most dependent on overseas workers in recent years.
The issue of labour shortages is hitting the news – and supermarket shelves – right now, though some suggest the problem will solve itself over the coming weeks, as the distorting effects of pandemic support measures are removed. The furlough scheme, which has been accused of keeping workers in defunct jobs, rather than pushing them to look for new ones, ends next month. But it has been winding down for a while – the number of furloughed jobs in London halved between the end of February and end of June (though this is a slower rate of decline than other English regions) – while labour shortages have persisted or worsened as the economy has re-opened.
The other element of pandemic support has been the temporary £20 per week increase in Universal Credit (UC). More than a million Londoners were claiming UC in June 2021, three times the number two years earlier. Some of these are people who are out of work, but nearly 400,000 are working Londoners whose pay is simply not adequate to their needs. The removal of the £20 per week increase in UC, also due to take place at the end of next month, might encourage some non-working Londoners into employment, but will also push more working Londoners into poverty.
If people won’t be forced back into low-paid jobs by the removal of state support, can we look overseas instead? As border restrictions relax, London may once again attract workers from around the world, though the new immigration regime will prevent new arrivals for working in some of the city’s most crisis-hit sectors.
But by debating how we can use imported labour and benefit subsidies to fill jobs that don’t pay enough, perhaps we are asking the wrong questions. Beyond the question of basic morality, coronavirus has exposed the precariousness of this approach to staffing our shops, bars, restaurants, building sites and care homes. Low pay may even be holding back innovation, as the Resolution Foundation recently observed, and hence productivity growth.
London’s economy is likely to change dramatically in coming years as the long-term impacts of the pandemic combine with the impact of technology and action on climate change. To be ready for these changes and the opportunities and disruptions they will create, London needs to pay workers better (as proposed by my former colleagues at Centre for London) or find smarter ways of doing their jobs. We can no longer afford low wages.
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.
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.
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.
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.
“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.
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.
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.