Why is London lagging behind in recovering from the pandemic?

As UK cities start to recover after the pandemic, one major  urban centre – London – is still behind the rest of the pack in terms of spend and footfall, according to the latest data from Centre for Cities

Since the onset of the pandemic two years ago, urban planners and city officials have been pondering the fate of our cities as urban life retreated behind closed doors and much activity migrated to the suburbs.

Despite footfall and spend in cities plummeting by 80 to 90 per cent at the beginning of the pandemic, cities and large towns across the UK are recovering to their pre-pandemic levels, with one notable exception: London.

Centre for Cities has published a rolling data tracker of footfall and spend in cities and large towns across the UK to understand how urban environments are recovering from the pandemic. The tracker uses anonymised mobile phone data from Locomizer and anonymised offline credit card spend data from Beauclair and the results are published monthly.

At a recent FT Live event on the future of work, Andrew Carter – chief executive of Centre for Cities – made two important observations about the data. The first is that almost all UK cities and large towns have recovered to pre-pandemic levels of footfall and spend with the exception of London, which is lagging behind at just 60 to 70 per cent.

The second observation is that the composition of urban recovery is led by weekend and night-time users, while weekday users – typically workers – are not yet returning to the city centre at the levels they were pre-pandemic. While this is good news for the hospitality and entertainment industry, it raises some questions for corporate real estate on the future of office provision.

Reasons for slow recovery

London’s slow recovery rate may come as a surprise to many, but there are a combination of logical factors behind what’s happening in the capital. The first reason is that London has the highest concentration of knowledge workers who are able to do their job from home, so they no longer need to commute to do their work effectively.

Another reason is that London has the longest commutes of any British city and it has the highest reliance on public transport. If people can effectively do their job at home, they are less inclined to travel for over an hour to reach their office to do the same work. Also, desire to use public transport has declined since the pandemic because of hygiene and social distancing reasons.

The third reason is that London has the highest cost of living. Housing costs and rents are pushing people outside of the city into the suburbs and onto the margins of London. Coupled with the long commutes and the ability to do their work at home, workers are less inclined to travel into the city centre.

While the data from Centre for Cities focuses on the UK’s largest towns and cities, other cities across the world can take note. Greg Clark, group advisor on future cities and new industries for HSBC Group, was on the panel alongside Andrew Carter at the virtual FT Live event and commented that HSBC has been tracking 100 cities across the world to understand the variations and differences in recovery after the pandemic.

Clark said that the degree of urbanisation has an impact on how cities are adjusting to the pandemic. Cities, for example, that are investing heavily in digital infrastructure and high-speed city wi-fi will once again attract workers back to the city centre.

Reinventing the urban centre

The data from Centre for Cities suggests that London and other city centres need to reinvent themselves to become relevant to new ways of living, socialising and working. Andrew Carter suggests that we need a bigger mix of activities and a wider timescale in which those activities can be conducted.

‘People are living inverted hybrid lives after the pandemic, working from home and socialising in the city centre…’

Based on the assumption that work is no longer a 9 to 5 gig, there is a reduction in dependence on the city from a corporate and worker perspective. But there is an increase in the dependence on the city for socialising, interactivity and innovation. This will require a significant rewiring of cities to enhance opportunities for face-to-face interactions and activities.

People are living inverted hybrid lives after the pandemic, where people are working from their rural homes and socialising in the city centre. Offices are no longer the pull for people coming into cities so London, along with other major urban centres, will need to reinvent itself to bring people back to the city centre during the week.

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