London is internationally recognised as a leading business centre and a desirable place to live and work. It consistently sits in the top five global cities in many rankings, particularly as a centre for finance and technology.
However, dark winds are coming. A recession is looming, and inflation is spiraling. We haven’t seen the full extent of Brexit, such as the European regeneration funding we will miss out on. Nor do we know the full extent of the impact of the pandemic on rates of attendance in the workplace.
Against this turbulent economic backdrop, it is more important than ever for London to retain its position as a world-leading city. The private sector can’t sit on its laurels but must work with the government and public sector to provide opportunities to boost productivity.
Here are three specific areas of focus that could help us to foster productivity and contribute to the long-term success of the capital.
Rethink planning to invite creativity
The first thing that needs to change is the planning regime. The system needs to be more flexible to allow developers and architects to create better quality, attractive buildings.
For example, why is there only one building in London with a running track on the roof? Why can’t we have more examples of creative design? It needs to be easier for developers to create buildings that occupiers really want.
Following the pandemic, London employers large and small are increasingly recognising the importance of creating workspaces that staff truly want to visit. don’t yet know how the general trend to continue working from home will impact long-term productivity. For example, how will training and mentoring work? There’s a risk that younger generations will suffer from a lack of contact with more experienced staff.
Real estate needs to provide an attractive space place and excellent and an experience that encourages people to visit. Workspaces need to be reimagined with fewer desks and larger meeting rooms, as well as more breakout spaces, quiet rooms and amenities that people really want. Landlords and developers need to be given the freedom to create best in class offices with more amenity space that will help occupiers recruit and retain staff.
A more specific aspect of planning that could be revised to provide better workplaces relates to listed buildings. There are currently more than 600 listed buildings in the City of London alone, many due to minor heritage aspects that prevent owners from improving their functionality. If listed status could be more flexible in terms of how they are graded, for example, owners may have an opportunity to develop a building in a way that promotes regeneration, sustainability and the best use of space for tenants while continuing to preserve key historic attributes.
Create affordable workspace ecosystems
A second issue that needs to change is the requirement from most London local authorities to include up to 20% of affordable workspace in new commercial developments or refurbishments where the existing building increases in size?. This policy is needed to create a diverse mix of companies within each borough, but could it not be revamped to help all parties?
Currently, with build costs having increased markedly in recent times, accommodating the affordable element is hampering the viability of potential schemes. It is also unviable for many affordable workspace operators due to the cost of fit out in relation to the subsidised rental income they receive.
Creating a small area of affordable space does not help the SME occupiers either, as it is too small to have any real impact. It reduces the chance of creating an ecosystem where growing businesses can thrive within the environment. SMEs thrive on collaboration. They feed off each other’s productivity. By creating disparate pockets of affordable space across a borough, local authorities are missing a trick.
Instead, each borough could have an entire building or development dedicated to affordable workspace, paid for by a levy on property owners. This would be a more productive and therefore optimal outcome. A community of SMEs could be fostered, in the style of an incubator, who thrive on each other’s creativity. London’s future lies in the hands of these creative people, but we need to give them the right facilities.
Educating for the future
For London to retain its leading position in the worlds of tech and finance, we all need to do much more to foster skills in young people. While this calls for action from the government, the private sector, including the real estate world, needs to play its part.
Arguably, the private sector is not doing enough to help inner London schools equip children with the skills they need for the technology and finance sectors. The city is home to many world-leading universities and institutions, but we are not giving enough attention to younger students.
Creating a diverse workforce that will protect the city needs to start at an early age. If the private sector supports London’s schools, we can equip students with a diverse set of skills that will help the city lead the UK.
This is where the government needs to play close attention to the levelling up agenda. Undoubtedly, areas of the country need increased funding and infrastructure, but diverting funds away from London risks having a domino effect across the country in the not-too-distant future if productivity falls.
We need to ensure that London’s young, talented people play their part in research and development, which the government is looking to move away from the southeast. As economic uncertainty and disruption look likely to remain for a prolonged period, now is the time to ensure our capital is as productive as possible.
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