What will get London workers back into the office?
Last Friday, passengers began to travel with off-peak Tube and train fares and will be allowed to every Friday until 31st May, 2024. The new scheme – announced by Transport for London (TfL) at the end of January – is a bid to increase the number of people travelling on London transport after it was found that Tube usage numbers were still lagging behind pre-pandemic levels, with office occupation on Fridays similarly down.
People increasingly being permitted to choose to work from home since the pandemic; train strikes and costs exacerbate this trend. Research by the London Heritage Quarter (a collective of four central London Business Improvement Districts) at the start of this year found that one in five office workers were planning to work from home ahead of the January strikes, while 55 per cent of Londoners cited increasing costs as deterring them from travelling into work and thereby saving funds.
Chief Executive of London Heritage Quarter Ruth Duston, says: “Despite a clear appetite for a more regular return to the office, from both employers and employees, the impact of strikes clearly prevented workers from commuting. In addition, the continued domino effect that it had on the retail, leisure and hospitality sectors resulted in businesses having to cover for losses that are beyond their control.”
In the last six years, hospitality has increased its annual economic contribution by £20 billion to £93 billion, and is the third largest employer in this country. If London’s hospitality sector fails, so too does the UK economy. Meanwhile, the retail sector faced 120,000 job losses last year, and an estimated £1.5 billion was lost in 2022.
Businesses cannot afford to stay afloat with low consumer spending and increased costs. The London Chamber of Commerce and Industry (LCCI) London Quarterly Economic Survey found that 66 per cent of London businesses were increasingly concerned about the rising cost of inflation in Q4 of 2023 compared with Q3. Investment and economic growth are stunted if there remain uncertainties about costs and demand and London’s businesses need more certainty.
In a November 2023 survey of hospitality businesses by UKHospitality, 55 per cent of respondents said they had not raised their menu prices in line with their cost increases. Direct impact from this can be seen in wholesale and retail; accommodation and food; arts, entertainment and recreation industries accounting for a collective 66 per cent of all insolvencies across the UK in 2023, according Creditsafe. Every collapse has direct and indirect negative consequences on confidence and investment.
With the announcement of further train strikes this month, given the choice people inevitably elect to work from home, resulting in knock on effects of lack of footfall into central London. Last minute strike cancellations have little impact when choices have been made and the damage is done with the inevitable consequences that more business difficulties will follow.
Maintaining London’s transport as a reliable and affordable option for commuters throughout the entire week is imperative. A recent survey by Deltapoll, commissioned by the Eastern City Business Improvement District (EC BID), found that 61 per cent of Londoners name public transport as a crucial factor in considering their work environment; a further 72 per cent of City workers say the same. Clearly there is work to be done to stimulate confidence.
“It’s important that the RMT, TfL and other stakeholders find a swift resolution to end the threat of strikes while reassessing the increase in rail fares, so that we can enhance the appeal of public transportation again for commuters and ensure they receive value for their money,” Duston said.
In the run up to the mayoral elections in May, Labour mayor Sadiq Khan might have introduced an element of dynamic pricing and frozen TfL fares as a way to address this problem, but it remains to be seen whether this is enough to encourage footfall into central London and revitalise businesses who are already struggling with inflation and the rising cost of doing business in the capital.
Conservative mayoral candidate Susan Hall is skeptical about the TfL trial making a significant difference. Speaking to BBC News, she says that commuters “might change their habits slightly”, but “if people are doing a three-day week [in the office], they’ll just change their days and not come in another day”.
If transport fare cuts aren’t going to do it, further incentive needs to come from businesses themselves to attract workers back into the office. Deltapoll findings also reveal that 46 per cent of young professionals between the ages of 18 and 24 express a desire for more diverse and engaging work environments; which the EC BID is seeking to address through their RECHARGE 2024 campaign to tackle the mental, physical, and environmental wellbeing of employees in Canada.
Central London Alliance (CLA) brought together Blue Orchid Hospitality, Eastern City Business Improvement District, and Aldgate Connect Business Improvement District to create new opportunities to encourage the return to workplace, to increase dwell time and for pre and post work activities, and also encouraging visits on weekends and bank holidays. Last summer’s CLA Padel Tennis Festival in the Crescent in Canada, drove footfall into the City – with approximately 6,380 additional people visiting the Crescent over the summer – and contributed to a 900 per cent uplift in year-on-year sales for local businesses.
Nadia Perrier, Director of Central London Alliance, commented: “Collaboration is essential in our mission to drive footfall back into central London. We are proud of the achievements of the Padel Tennis Festival and our Reignite and London Love Affair campaigns, and hope to continue on our mission to return footfall and dwell time to central London in the year to come; encouraging people to witness new and exciting activities and opportunities to enjoy their time in the capital, whether before during or after a normal working day.”
“We encourage businesses to work together to improve urban attractiveness – creating work environments that are more enticing to workers – and enhanced travel solutions that make travel more affordable and convenient for commuters travelling into London.”
“Our partners are working tirelessly to encourage workers and visitors alike back into workplaces, which will drive a strong economic recovery for our capital, and thereby to support the rest of the UK,” she adds.