What is the future for Westminster?

Westminster City Council’s Labour Councillors believe the current economic situation has placed the West End in a very precarious position which, if decisive action is not taken urgently, could threaten its survival as an economic engine for London and the rest of the UKas well as create serious problems for the local economy

We have set out in this paper a series of Emergency Actions that we believe need to be taken by the City Council in order to attract more families to the West End to replace the missing office workers and overseas tourists.

We have also set out a series of Actions for the City Council, the Mayor and Government to take.

Finally, this document also looks at issues which the City Council should consider if office workers, tourists and shoppers do not return to the West End in the numbers necessary to sustain the area’s economy in its current form.

There is a need for wide debate and discussion about the future of Westminster and we hope that this document will start the process and stimulate ideas, suggestions and thoughts from residents, businesses, community organisations, academia and anyone who has an interest in these important issues.

We plan to organise a ‘virtual conference’ in September to discuss these issues. If you would like to attend please let us know at pdimoldenberg@hotmail.co.uk

The threats faced by the West End

London will emerge from the Covid-19 pandemic “poorer as a city” and “picking up the pieces will take a long time”. That was the stark warning from economist Vicky Pryce, as the London Chamber of Commerce & Industry unveiledthe dramatic impact of the crisis on business in the capital.

This is important as London’s Central Activities Zone, including the West End, makes a massive contribution to the national economy. Recent Centre for London research indicated that it generated 10 per cent of national economic output in an area covering just two per cent of London – “Global London is the heartland of Global Britain”.

The impact of Covid-19 has been very serious, according to the Centre for London: 

“London’s city centre emptied out faster and deeperthan other UK urban centres when lockdown started at the end of March, partly reflecting the higher proportion of jobs – predominantly higher paid professional and office worker jobs – that could be undertaken from home. Lower paid workers in hospitality and retail also stayed home, but mainly on furlough in the short term – many will be wondering if they have jobs to return to. Anyone who has been into central London recently will have noticed how empty its streets remain, while life returns to more residential neighbourhoods.” 

A survey conducted by the Evening Standard of FTSE 100 companies, of which 53 responded, “revealed many business chiefs are planning only a gradual return to the workplace for employees. The survey found: 

• Ten business giants do not plan to have most, or start welcoming many more, employees back until at least September.
• Many firms did not have or confirm a fixed return plan.
• Many corporates will look at more flexible working in future.
• Numerous companies are watching for government guidelines.

Many London bosses remain concerned about staff travelling in on the Tube, trains and buses and about making sure buildings can cope with social-distancing measures. Josh Hardie, deputy director-general of the Confederation of British Industry, stressed that “safety comes first” and that “changing people’s behaviour and confidence will take time”. 

The underground and rail commuter services are vital for London’s economy. Shashi Verma, Transport for London’s director of strategy and chief technology officer, told a recent Centre for London conference:

“If Central London returns to anything like the density that it has had for decades, [travel] demand cannot be served by any means other than rail – rail and Tube are the only means by which you can get one and a half million people into the city and adjoining areas and back out again every day. You can’t do that by bus, you certainly can’t do that by car, you can’t do that by active travel, you cannot do that by anyother means. That is why the economics of transport and the economics of Central London are so closely tied together.”

The West End hospitality sector is the hardest hit by plummeting revenues, with 75 per cent of businesses seeing cash flow nosedive. Clive Watson of the City Pub Group told the ‘Times’, “from Covent Garden to Canary Wharf is like a ghost town”.His company’s workforce has fallen from 1,200 to 600. Employment levels are down significantly across the board, with 42 per cent of firms reducing payroll and only one in 10 looking to recruit. Hotels and restaurants will soon face further difficulties when they suffer the loss of skilled labour from the EU.

Nationally, there has been a 1.4 million increase in unemployment since March 2020. The closure of retail/ food outlets and restaurants has disproportionally affected women and young people.

Jace Tyrrell, Chief Executive of the New West End Company, has warned that the West End is at risk of losing £5bn in sales and 50,000 jobs if tourists and office workers do not return. Tyrrell said that in the first full month since the reopening of non-essential retail on June 15, some 5.1 million people visited the West End – although this was still down 73 per cent year-on-year for the same period. To underline this, RBS has recently told 50,000 staff that they will not be going back to their office until 2021.

On 28th July, Selfridges announced 450 redundancies (14% of its staff). When announcing its store closures across the UK, John Lewis referred to the fact that online shopping now accounts for 70% of its sales (up from 40%). Other retailers will be facing similar shifts in their markets. This will result in empty (or half empty) stores in parts of the West End. The other side of this change will be the increase in the number of ‘white vans’ travelling around Westminster. Hermes has recently announced it is to create 10,500 jobs in the UK as it invests £100m in increasing its delivery capacity.

The other area unique to Westminster are our theatres, where the lights are out and unlikely to reopen soon. Reducing seating is not an option as this will hit the profitability of productions. Shashi Verma of TfL concluded his Centre for London talk with the following stark reminder, “The entire arts and culture district of London depends on people being around in Central London. If that goes, a lot of things go with it. Remember, this is the UK’s prime asset. And we’ve got to be careful not to destroy it.”

With many fewer commuters to Westminster’s shops and offices, a massive drop in tourists and fewer people coming to the Westminster’s theatres, clubs, bars, pubs, galleries and restaurants, the financial losses to Transport for London are mounting steadily. If fewer people are using public transport it not only means an increase in private car usage, but also the breakdown of the model under which London has operated since Victorian times.

Daily Telegraph writer, Rosa Silverman, argues that the prospect of working from home, shopping, eating-out and socialising locally will be attractive to many people and they will reject the opportunity to get back to their former way of life;

“What if we don’t want to? Not because we’re scared of catching coronavirus on public transport … but because we have found a better way of achieving work-life balance?” Indeed, polls suggest swapping the commute for more family and leisure time has been welcomed. “Surely now is the moment to focus on reviving local economies rather than reverting to behaviours that made us unhappy,” Silverman adds. “Where once we bought lunch in a city centre sandwich shop chain, we might now take our custom to our local high street instead. Suburbs and villages … could be reinvigorated now. Some of the money we save on eye-watering season ticket costs could be spent on lunch in a local café or pub.”

Silverman’s thoughts link closely with the ’15-minute city’ concept. The increasingly popular concept – “everything you need for daily life within a 15 minute walk from your home”, was the centrepiece of Socialist Party candidate Anne Hidalgo’s campaigning in the recent mayoral election in Paris. Hidalgo convincingly won a second term after the final round of voting, delayed because of the pandemic, took place in June. Interestingly, recent trading information from the City Pub Group mentioned earlier confirms the trend to more local activity, with“locations with ‘chimney pots’ like Parsons Green and Notting Hill trading well”.

There is evidence, too, that changing working arrangements will impact on where people chose to live. A study by the jobs site, Totaljobs, of 2,000 adults revealed that 43 per cent believed that an offer of flexible working would encourage them to move, causing an ‘urban exodus’ and “a real opportunity for regional employers”. In practical terms, many families will ask themselves, “why are we living in a small flat in London when we could buy a detached house elsewhere for the same money?”

Finally, another clear issue that has emerged from Covid-19 pandemic is the strong links that the spread of the virus has with overcrowded housing. Recent analysis by Nathaniel Barker for ‘Inside Housing’ has revealedthat areas with the most overcrowded housing have been worst hit by Covid-19. “Of the 30 areas with the highest percentages of households living in overcrowded conditions”, Barker explains,“26 are in London. Part of that can likely be explained by the acute affordable housing shortages in the city”. In addition, the heroic role played by ‘key workers’ in the NHS and other public services needs to be acknowledged by more targeted help for their housing needs in Westminster.

What can we do? 

As the Centre for London argues,“Central London needs people, the throng of workers, shoppers, residents and tourists. Its retail, hospitality and cultural industries serve and entertain the world; they cannot survive on the area’s 330,000 residentsalone.” 

The Mayor has written to the Prime Minister calling for emergency Government support for the West End https://www.onlondon.co.uk/sadiq-khan-and-business-groups-ask-prime-minister-for-more-support-for-londons-west-end/. The Mayor has

“grouped his requests into “eight proposals that would help secure the West End’s future survival”. As well as financial and fiscal help for employers and workers, he asks the PM to “prioritise investment in NHS test-and-trace and more support for hospitality businesses to implement systems”, which he says would do much to increase public confidence, and for the government to “explore” widening the compulsory wearing of face-coverings to “the busiest public spaces”.

But, is it possible to re-establish the West End to what it was pre-COVID, or can we take more fundamental action to shift it to a new and more long-term sustainable economic model? 

If retail is going to have a major part in the local economy: some customers need specialist advice, and there is a social/communal enjoyment of shopping. Events like Winter Wonderland, though it’s very disruptive locally, clearly works to the benefit of the West End retailers. Can we spread that sort of Christmas/New Year shopping experience throughout the year, by putting on some kind of visitor event(s)?

What does the future hold for the office sector? Given the technological changes since the introduction of broadband, the justification for having large-scale office premises in central London has been disappearing. As the lockdown has demonstrated, companies can cut their operating costs significantly be downsizing their office footprint and allowing staff to work from home for large parts of the week.

A recent FT article quoted the predictions of a number of FTSE rated companies:

“Nigel Terrington, chief executive of FTSE 250 lender Paragon, told staff they would not need to come back to the office until October at the earliest. “We’re operating very effectively, productivity is good and in many areas it’s up.” He forecast a permanent change: “The rule of thumb we’re using is 30 per cent will be in the office, 30 per cent at home, and 40 per cent toggling between the two.” Unilever, likewise, sees “a hybrid future of work, where people might spend a couple of days in the office and two or three days at home or working remotely”, according to chief executive Alan Jope.” 

There are, however, downsides to long-term homeworking:

“Some believe idea generation within teams and morale is suffering, particularly among the more junior cadres. Those younger staff members are often the most keen to return. Unlike their bosses, many are working in bedrooms or from coffee tables in crowded flat-shares and are concerned they are missing out on engagement with bosses and mentoring opportunities.”

And how will these changes impact on the West End as a place to live? Building more homes, perhaps by converting existing office blocks, is one way forward, probably involving more people renting. We may need to introduce statutory regulation for rented property to protect tenants from bad landlords, raise standards and encourage longer term tenancies at more affordable rents.

And we should consider the ‘doomsday’ scenarios, too. If the West End isn’t a place to work and shop, what’s it for? And if office workers don’t need to be near their employer, how many will want to stay in London if they can find more space for less money elsewhere? How can we persuade them to stay? How do we provide jobs for all the people currently working in retail and hospitality? What are the training needs?

In bureaucratic terms, will the Council’s City Plan be fit for purpose if decades of assumptions about a West End economy based on employees commuting by train and tube require a fundamental rethink?

Also, is the Council’s Oxford Street plan the right plan for today and the future? The Council is planning to spend £150 million, supported by additional contributions from the private sector. Do we need to think again before committing to this massive expenditure in very changed circumstances?

We are still coming to terms with the impact of Covid-19 on our way of life and we do not claim to have any of the answers yet. The production of an effective vaccine could change the situation dramatically overnight.

However, we believe we need to start thinking about these difficult and complex issues now, so we can begin to understand the dynamics and opportunities going forward.

So, here are some initial ideas and thoughts, broken down into (a) Emergency Action to get the West End back on its feet and (b) Issues for Westminster Council, the Mayor and Government. Please let us know your thoughts, ideas and suggestions.

Emergency Action to get the West End back on its feet

Our discussions with the Westminster Property Association indicate that the next 9-12 months are going to be very difficult for the West End economy. We need an emergency set of initiatives to encourage more people back in to the West End to shop, enjoy and work. We need to build on the unique characteristics of the West End to offer a ‘great fun day out/weekend away/staycation holiday’ for people in London, the South East and the rest of the UK. We have to think big

 

1. Promoting the West End as a place for ‘great fun day out/weekend away/staycation holiday’– We need to run a major advertising campaign to encourage UK families to come to the West End this summer as a great alternative to going on holiday abroad. We have the hotels, the restaurants and bars, the sights, the history and soon the museums and galleries and other attractions will be open. It is a golden opportunity for visitors to see explore and experience the rest of London, too, the South Bank, the Royal Parks, Greenwich, the City and more. Our Blue Badge Guides can offer interesting walking tours of familiar and not-so-familiar landmarks. Railway companies should be asked to introduce special deals for families travelling to London and West End hotels encouraged to offer attractive rates to visitors, too.

The Council’s recently announced social media campaign https://www.westminster.gov.uk/see-sights-without-crowds-sightseecrowdfreeneeds to be expanded on a nationwide basis through the use of press and TV advertising to get the message across that the West End is open for business.

 

2. Promoting West End fun events – We need to offer people something they cannot get anywhere else that will make shopping fun (and safe) and certainly much better than buying online. So, how about arranging “the biggest street market in the world” every weekend along Oxford Street, with arts/crafts, antiques, clothes, farmers markets, street food and more. Maybe we should create “the UK’s only urban beach” on Regent Street by importing tons of sand with loungers, deckchairs, beach volley ball and bars? Or why don’t we organise a massive ‘Fun Fair’ along The Mall just as we did 20 years ago during the Millennium? And why can’t we organise live open-air performances (with appropriate social distancing) in Hyde Park, St James’s Park, Regent’s Park? All these fun events could attract families to the West End, drive footfall and help shops, restaurants and cafes, while observing safe social distancing at all times.

 

3. Having a great time in Westminster’s Villages– Anecdotal evidence from landlords and businesses is that the areas where people live (and are working from home) are faring better than office/employment areas. So, shops, restaurants and bars in Marylebone, St John’s Wood, Bayswater, Maida Vale and north Paddington are starting to recover. If this trend is going to continue at whatever scale, we need to talk to retailers, restaurateurs and bar owners to ask how we can help them rebuild their businesses and potentially take on more local staff. There may be opportunities, too, to provide additional local employment accommodation. This is an opportunity to rebalance Westminster’s economy so that traditional residential areas take on a mixed economy and provide local jobs and enhanced local services, too.

 

Issues for Westminster Council, the Mayor and Government

We support the Mayor’s call to Government for support for the West End. Westminster City Council have made an encouraging start. But more needs to be done. 

Business

• The Council should call on landowners and landlords to reduce or freeze rents in the badly affected business areas.
• Call for the Government to reduce Business Rates for at least 1 year
• Council to push for some categories of low skilled work, like carers and workers in the hospitality industries, to be included in the immigration quotas.
• The Government to extend its furlough scheme beyond October for sectors of the economy that remain severely depressed.
• More flexible office space which can be easily booked by start-up businesses and individuals
• Landlords to let vacant retail space to independent retailers, makers and crafts people in ‘pop-up’ units
• Tax breaks for start-ups could include business rate discounts or holidays, and capital allowances for investment in office and shop fit-outs – an ‘enterprise zone’ for the West End
• Planning policies need to acknowledge that ‘experiential retailing’ has a major role to play in reviving the West End and research needs to be undertaken to guide the Council’s planning approach to the changing retail climate.

Transport

• Encourage employers to introduce staggered working hours so that staff can travel into Westminster in less crowded and safer railway and tube carriages
• The Council should make the recently-introduced temporary cycle lanes permanent and make them appropriate for all ages and abilities by adding physical segregation
• The Government should restore free child fares so that families can get to and about Westminster more easily
• The Council should encourage the creation of ‘consolidation centres’ and ‘on-line pick up points’ so that the increased white van delivery traffic can be controlled

Cultural Economy

• Government to relax the licensing laws to allow theatres the option of 7 day aweek opening. This will allow them to schedule performances and spread them out to meet social distancing requirements.
• More public, park and road space to be allocated for outdoor performing arts
• Distributing ‘cultural vouchers’ across the country could also play a part once theatres and other venues start to re-open, drawing people back into the West End and city centres across the country, where attending a play or performance could be accompanied by food, drink and shopping.

Jobs

• There needs to be a major drive by the hospitality sector to attract people in to the hotel and restaurant business by offering high-quality training and attractive remuneration
• Council assistance for local unemployed people to learn to drive/upgrade their driving skills so they can apply for the growing number of delivery jobs
• Particular assistance needs to be offered to the low-skill, low-paid office cleaning and security staff who will face real problems over the coming months and years as their employment shrinks or disappears.
• At present only about one-third of Westminster residents work locally. Some people have no journey to work because they do not have a job. Our aim must be to skill-up currently unemployed/under-employed people so they can compete for a local job in whatever area of work they chose.

Homes 

• ‘City centre living’ has revived many UK cities such as Manchester and Leeds. We believe there is scope for the conversion of some low-grade office space to residential, but we are concerned that the uncontrolled conversion of empty office space to residential will lead to low standard accommodation that will soon deteriorate to ‘slum’ conditions and housing the very poorest families.
• We strongly believe that building more social housing to reduce overcrowding is an essential requirement for post-Covid 19 Westminster
• Following the heroics of many key workers over recent months, it must make sense to build more homes for key workers 

Community

• One strong and very positive feature of the response to the Covid-19 pandemic has been the overwhelming response from local community support groups from right across Westminster.
• It is vital that the thousands of volunteers who selflessly gave of their time are nurtured and supported over the coming months and years. This will require organisation and financial support from the Council and will be a very good investment in maintain and growing Westminster’s social and economic infrastructure. 

Environment

• Sustainability and greening needs to be at the heart of everything we do, not an added ‘nice to have if circumstances allow’
• Encourage greater use of electric vehicles by providing more on-street charging points
• Accelerate the use of clean power in energy efficient homes by installing photovoltaics in new developments and retrofitting elsewhere whenever possible
• More local “parklets”
• Better use of public spaces as areas for physical activity, including more outdoor/park gyms
• Creating traffic-free neighbourhoods that are welcoming and sustainable, not clogged with traffic
• Enable traffic-freestreets (temporary or otherwise) to be used for outdoor events.
• Reallocating road space away from vehicle traffic, towards pedestrians, children and cyclists
• More cycle hangars and Santander docking stations in north Westminster
• Promote walking and cycling to improve health and tackle obesity.

Over the next few months we want to stimulate a debate in Westminster amongst residents, business, community groups, voluntary organisations and individuals on the future of Westminster. Collaboration has been a feature of the battle against Covid-19 and it needs to be the same as we go forward in the future.

 

Westminster City Council Labour Group

August 2020