Is London in crisis? In too many ways the answer is ‘yes’

Is London in crisis? That was the provocative question providing the theme of think tank Centre for London’s annual London Conference, held last week. And as a bleak picture emerged throughout the day – of high costs, low pay, soaring rents, escalating numbers of families in temporary housing, rough sleeping at a record high, and a sluggish economy beset by skills shortages – it felt difficult not to answer yes.

Chief executive Antonia Jennings said that housing, childcare and even commuting have become widely unaffordable in the city, according to recent polling for the centre: “We have the highest rates of wealth inequality, child poverty and air pollution in the country. For far too many Londoners, the capital is falling short.”

Several bleak statistics stood out. Thirty-seven per cent of Londoners are now struggling to make ends meet, with inner city rents accounting for well over 50 per cent of income for low-paid workers, such as healthcare assistants and newly-qualified nurses. Street homelessness is now at its highest level since 2010, while the annual housing benefit bill is approaching five times the cost of providing recipients with social housing, while still failing to cover the cost of renting.

High costs and housing shortages have led to an unprecedented “hollowing out” of inner London: birthrate has been falling since 2012, schools have been closing, an exodus to the outer suburbs has gathered pace and, at the same time, more and more adult children have been unable to move out of their parental homes.

“We need to recognise that London’s housing crisis is the worst in the country,” said Claire Holland, leader of Lambeth Council and acting chair of the cross-party London Councils group. “We are at a particularly precarious moment.”

What about London the city of business and finance, where the City of London Corporation has just unveiled new images of the Square Mile’s skyline featuring 11 new skyscrapers under construction, approved or proposed, between them set to add a million square metres of additional office space by 2030, equivalent to 70 football pitches?

Again, some worrying figures were set out by centre researcher Millie Mitchell: productivity in the capital has essentially been “flatlining” for over a decade, she said. The City’s political chief Chris Hayward added that the cost of living, skills shortages and difficulties with attracting finance for growth were all in the frame.

It’s a mixed picture of course. London remains an economic powerhouse for the UK and a global city, home to world-leading industries, universities and other institutions, attracting some 400,000 new residents to work or study every year and contributing four in every ten pounds of revenue collected by the Treasury. “Across many metrics, London is an exceptionally successful city,” said Jennings.

Conference speakers highlighted more of the positives. A growing number of cultural spaces in the city are now both free and welcoming for children and families, said Catherine Ritman Smith of the recently refurbished and modernised Young V&A. The museum attracted more than 200,000 families in its opening weeks, she said.

London is a green city, said Matthew Frith from the London Wildlife Trust. In fact, some 50 per cent of the Greater London area is green or blue and home to 15,000 species of flora, fungus and fauna. Plans for more greening, including ten new parks and a 1,000-acre “tree ring” round the city have been gaining support, added Anna Taylor, London region head of the Campaign for the Preservation of Rural England.

And Port of London authority representative Sian Foster reminded the conference that London’s port is the busiest in the country, with a new focus on light river freight services carrying consumer goods into central London. These have the potential to take thousands of lorry loads of goods off the streets.

London is changing too. Economic output remains concentrated in the centre, but the biggest borough productivity hotspots over the past decade included Richmond and Croydon as well as Hammersmith & Fulham, Hackney and Camden. And while old-style banking and insurance is still the largest contributor to growth and output, information and communications, professional, scientific and technical activities are growing faster.

The Square Mile is already a leader in “green” finance, said Hayward, with increasing opportunities beyond its traditional image. And the future of work, too, is green, the conference heard. The number of jobs associated with the zero-carbon drive is forecast to increase four and half times by 2050, not only in finance but also in construction and “retrofit”, transport, power and more.

That means more opportunities for addressing the climate crisis and also for meeting the need for new and energy-efficient homes and good jobs for Londoners. If this sounded long-term, there were shorter-term suggestions too: increased grants to councils to prevent homelessness; an immediate uplift to housing benefit rates; reducing Right to Buy discounts in order to stem the flow of council housing out of the sector. If the capital could continue to speak with one voice, the conference heard, Whitehall might listen.

So is London in crisis? Certainly, the critical issues stacking up in the city can look insurmountable, with little sign of the action at national government level many at the conference agreed was required, whether on housing, capital for transport or wider devolution.

Even so, Sadiq Khan, rounding off the speaker list, perhaps predictably didn’t think so. “London has always bounced back, and we are bouncing back far quicker than other major cities post-pandemic,” he said. But there was, nevertheless, a note of caution from the Mayor as well. Deploying the words of former US Secretary of State Madeleine Albright, he might have summed up many Londoners’ current sentiments: “I’m an optimist, but I worry a lot”.

X/Twitter: Charles Wright and On London. The Centre  for London conference can be viewed in full here. If you value On London’s coverage of the capital, become a supporter or a paying subscriber to editor and publisher Dave Hill’s personal Substack for just £5 a month or £50 a year. In return you get a comprehensive weekly London newsletter and offers of free tickets to London events. Thanks.