Reports of the death of the office may be exaggerated, but New Year in London will nevertheless see a wave of small business failures as retail, leisure and hospitality miss out on “golden quarter” trading in the run up to Christmas.
That was the stark warning today from Rowena Howie, Federation of Small Businesses London policy chief, as the London Assembly economy committee considered the continued impact of Covid-19 and new ways of working on the capital.
“Business have struggled through the lockdowns and availed themselves of every grant they can, but that is not enough,” Howie told Assembly Members. “You will see more fail in January and February than in the preceding months. We are going to see a lot of businesses going to the wall.”
Her warning came as London headed towards Tier 3 restrictions from tomorrow, a move described by Sadiq Khan as “catastrophic” for hospitality and retail as he joined business organisations in calling for extra financial support from government.
The Mayor’s planning and regeneration deputy Jules Pipe echoed that plea, highlighting the impact of the pandemic on London’s Central Activities Zone (CAZ), responsible for 13% of UK economic output.
“The ongoing success of the CAZ is essential not just for London but for the whole of the UK economy,” he said. “It is essential that this activity is able to be restored.”
But the longer-term outlook was more optimistic, the meeting heard. “I don’t think this is the wholesale death of the office at all,” said City Corporation research chief Laura Davison, while Deloitte Real Estate director Mike Cracknell reported new construction still underway amid a shift towards “TMT” – technology, media and telecoms – alongside finance as the City “reinvented itself”.
Cracknell predicted that a shift to “hybrid” working, partly at home and partly in the office, could “return space back into the market and allow more businesses to have London as their home, which is a positive story”.
And decisions were increasingly about what sort of offices were required, said Pipe, with a new focus on shared and “collaborative” space. “In the long-term we’ve got every reason to be confident. We will bounce back. And retail will come back when we are using offices more.”
Pipe highlighted Khan’s economic recovery “roadmap”, setting out a 12-month plan to help both the West End and London’s high streets, along with City Hall’s “mission” to revive high streets across the city – part of the Mayor’s London Recovery Board programme – and the draft London Plan commitment to preserve existing business and workspace as well as creating more space where needed.
Warning of growing pressure on London workspace though, from permitted development rules making it easier to convert workplaces to housing as well as the government’s new proposed watering-down of London Plan restrictions, he added: “Getting the homes we need cannot be at the expense of places to work.”
Quizzed by Assembly Tory group leader Susan Hall, Pipe also denied that the decision to move City Hall to docklands showed a mayoral lack of confidence in Central London. The move would encourage regeneration in the Royal Docks, as the first City Hall had on the South Bank. “That wasn’t a central business district at that time. It has now become one,” he said.
The full economy committee meeting can be viewed here.
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