Home working risks slowing down London’s economy, report says

Featured Sponsor

Store	Link	Sample Product
UK Artful Impressions	Premiere Etsy Store

The shift to hybrid work since the Covid-19 pandemic risks undermining London’s position as a hotbed of creativity and economic productivity, a leading urban policy think tank has warned.

With office attendance in the capital at about 60 percent of pre-pandemic levels, the Center for Cities said it expected a hit to the economy of reducing interactions in the workplace. Some academic studies have shown that such interactions lead to increased production.

“Policymakers must be careful not to passively let a public health emergency develop into a long-term negative impact on the economy,” said Andrew Carter, executive director of the Center for Cities, which on Wednesday released a report on the effect of working at home.

Data collected from the London Underground in office districts showed that the number of returning office workers had plateaued since November 2022. The level of passengers leaving the stations since then has remained at about 70 per cent. of the pre-pandemic regulations.

On average, office workers in central London came to work 2.3 days a week, or about 60 percent of pre-pandemic levels, according to the report. The most common work pattern was two days a week.

Citing several studies with conflicting results, the report said it was unclear what effect reduced office involvement would have on productivity in the long run.

You are viewing a snapshot of an interactive chart. This is most likely because you are offline or JavaScript is disabled in your browser.

However, he did reference more than a century of academic literature demonstrating the economic benefits of face-to-face collaboration, known as “crowding” effects. These would “suggest there will be a long-term productivity hit” due to reduced office activity.

“The big risk here is that hybrid work sees a further deterioration in productivity growth due to poor performance over the previous decade and a half, at a time when the London economy needs to move in the opposite direction,” he added.

The report identified a discrepancy between the views of workers and bosses about how much time at home was desirable, citing recent comments about the need for assistance from top executives at companies including IBM, JPMorgan and BlackRock.

TO survey of 27 countries by the National Bureau of Economic Research, a US think tank, found that employers wanted an average of 0.7 days of home work per week, but employees preferred more than 1.7 days.

But despite this disparity in expectations, data from Indeed’s hiring website showed that companies have continued to advertise a growing number of hybrid jobs. That was due to employers’ desire to attract and retain staff in a tight UK job market, he said.

The Center for Cities report warned that office attendance could enter a downward spiral if businesses give up office leases in larger buildings and falling ticket sales lead to a reduction in services. Of transport.

The report said the government should support London’s mayoral authority to maintain the frequency of the tube and buses, despite the financial impact of the pandemic. He suggested innovations like removing rush hour fares on Fridays to encourage workers to commute.

He also warned against repurposing offices for residential use, which could lead to a permanent reduction in available work space. This would “limit the ability of the central London economy to grow in the future,” he said.