London’s new Growth Plan, a key commitment in Sir Sadiq Khan’s 2024 election manifesto, was launched this morning to a packed gathering of the capital’s movers and shakers at Imperial College, with the Mayor receiving almost a rock star’s welcome as he took the stage to herald a “moment of maximum opportunity” for the city. So what are the immediate takeaways from the densely-packed 100-page “blueprint to kickstart the capital’s productivity”?
London’s institutions seem to be working together
The plan is the joint work of City Hall and London Councils, the cross-party body for the capital’s local authorities, and was developed with engagement from business bodies, education institutions, trade unions and community organisations.
Underlining this, both Khan’s indefatigable business deputy Howard Dawber, a former Canary Wharf executive and Labour parliamentary candidate, and Jason Perry, Conservative Mayor of Croydon and London Councils “executive member for London’s future” were name-checked at the launch as co-creators of the plan. Sector leaders across the city have lined up to support it, and the document will be taken forward by a joint City Hall and London Councils board with private and public sector representation.
Further highlighting the need, as Khan put it, to “focus our collective energies” on putting the plan into practice, he will going this year for the first time to MIPIM, Europe’s biggest property conference, with London Councils leader Claire Holland joining him and property sector leaders in a charm offensive to woo developers and investors.
The government is backing it too
In marked contrast to the previous government’s anti-London stance, local growth minister Alex Norris praised Khan and suggested his administration was a model for what Whitehall wanted to see across local government. “We will be with you in partnership, taking on the hurdles holding you back,” he said at the launch. Whitehall and City Hall for once seem to be going in the same direction, although a lot remains to be confirmed in the spending review and devolution discussions, still continuing.
It’s an uphill task…
Notwithstanding the “greatest city in the world” promotional videos shown at the launch ahead of Khan’s speech, the plan’s starting point is bleak – productivity growth in London has flatlined since the 2008 financial crisis, averaging 0.12 per cent a year compared to 3.16 per cent in the decade to 2007. As Holland, who also leads Lambeth Council, put it, speaking very much from the front line, businesses can’t attract the right people, the housing crisis is harming communities and the economy, and too many Londoners are living in poverty.
…but the rewards of success are significant
The plan aims to get productivity growth back to two per cent a year by 2035 – a £107 billion boost to the capital’s economy, also providing £27 billion extra in tax to the Treasury to fund public services in London and beyond. And in creating 150,000 new “high-quality” jobs via a new “inclusive Talent Strategy” it aims to boost the earnings of the lowest earning 20 per cent of Londoners by a fifth.
The Mayor’s focus on inclusive growth remains. Londoners need to “feel the benefits of growth”, in their pockets and in their communities, he said: “Growth is the catalyst for social progress, for the common good, not just for the few.”
A galaxy, not a star
While acknowledging the major role played by central London, including “selling services to the world”, the plan also looks to support “polycentric” growth. Central London may be the “jewel” not only in London’s but in the UK’s crown, it says, but the capital’s economy is “like a galaxy, not a star”. That means a focus on “innovation corridors”, including the WestTech Corridor from White City, the UK innovation corridor going towards Cambridge and the Thames Estuary heading east from Stratford.
There’s a long action list
It includes starting a new “London Technology and inclusive Growth Fund” to back high-growth small and medium businesses, setting up a new centre to match investors with opportunities, encouraging the city’s public sector pension funds to invest in innovation, getting that talent strategy up and running, planning a new category of rent-controlled “key worker” homes and setting out a blueprint for essential infrastructure to support the plan…with “year one” actions helpfully itemised. Watch this space.
And who will pay?
The key question. Firstly, the plan calls on Whitehall, for skills and training, affordable housing and Khan’s now familiar shopping list of transport schemes – the Bakerloo line extension, the Docklands Light Railway extension and the West London orbital – to “unlock” thousands of new homes. All eyes on the comprehensive spending review, with Holland also stressing the importance of restoring financial stability to the currently hard-pressed boroughs so they could play their part.
But just as crucial might be the outcome of negotiations over devolution, with London’s leaders seeking “more freedoms to fund their own growth priorities and the flexibility to spend money in the best way to drive good growth”. The plan says allowing London to “retain and reinvest some of the “upside” of the growth it creates” by, for example, borrowing against future tax income to fund investment could mean much of the city’s growth could actually pay for itself.
Reactions
The Growth Plan has received a warm welcome from, among others, BusinessLDN chief executive John Dickie, who praised its “bold ambitions”, and said that delivering the agenda “will require the city to double down on existing efforts to tackle barriers to inclusive growth, such as housing and skills where we have the agency to act”. But Dickie also urged the government “to ensure London has the tools it needs to turbocharge growth and help the UK get out of the economic slow lane,” notably by “providing long-term, flexible funding”.
Hammersmith & Fulham Council leader Stephen Cowan welcoming the plan’s recognition of his borough’s industrial strategy, which involves a White City Innovation District established in partnership with Imperial. Cowan said the strategy as a whole has seen the borough already attract “more than £6 billion in investment and 13,200 jobs” and can “serve as a blueprint to deliver inclusive growth for everyone across our capital”.
For think tank Centre for London, chief executive Antonia Jennings welcomed the clear ambition of the plan to “set up the capital to be a sustainable, inclusive, world-leading global city”, but stressed that achieving this would require “greater fiscal devolution” than City Hall currently enjoys. She pointed out that London government presently retains to spend is it thinks best only seven per cent of tax revenues raised in the city, compared with New York’s 50 per cent.
OnLondon.co.uk provides unique coverage of the capital’s politics, development and culture with no paywall and no ads. Support it for just £5 a month or £50 a year and get things for your money other people won’t. Details HERE. Follow Charles Wright on Bluesky. Additional reporting by Dave Hill.