Encouraging breakthroughs in the race to find a jab that gives protection against Covid-19 has raised hopes that commuters and tourists will soon start returning in large numbers to the “ghost town” West End and City for the first time since March.
A study from consultant Arup suggests that a best case scenario, in which office workers feel confident enough to work four days a week at their desks within a year, will generate an extra £41 billion in economic output and help save 57,000 jobs in hospitality, retail and entertainment.
In a slightly more cautious projection, in which the average time spent in the office is three days a week, the benefit is estimated at £22 billion and 31,000 jobs. Business leaders are desperate for the lifeblood of office workers and visitors to surge back after eight months of deserted streets, empty restaurants and closed theatres.
The report published today, was written before trial results from two vaccines — one from Pfizer and BioNTech, and the other from Moderna — showed they were both more than 90 per cent effective in offering protection from the virus. The famine in central London has already led to the permanent closure of hundreds of businesses, including landmarks such as the Ledbury in Notting Hill, Le Caprice in Piccadilly, the Ace Hotel in Shoreditch, and the Habitat store on Tottenham Court Road.
Thousands more are thought to be on the brink with only emergency measures such as the furlough scheme and rent holidays keeping them afloat.
The Arup report, commissioned by business groups, models five possible outcomes for 2021 ranging from “a worst case” third lockdown in the New Year to a “robust recovery” after a vaccine is made available.
It says its “base case” is a slightly more muted recovery with office occupancy gradually rising from around 30 per cent now to 65 per cent by the end of next year. This would mean an extra quarter of a million commuters in central London every day spending in shops, restaurants and bars.
Businesses are pinning their hopes on an early vaccine roll-out in 2022 bringing office workers and shoppers back to central London
In the worst case “doom and gloom” scenario with no vaccine and new lockdowns, office occupancy would fall back to the lows of about 15 per cent of last spring. If this happened an estimated 117,000 jobs could be lost in a devastating “mass extinction event” for businesses across the capital.
Business leader Ruth Duston, who oversees nine central London business districts and who commissioned the study, said: “The realistic prospect of a vaccine will fill many in the business community with great hope. It’s clear from these projections that any measures which mean people can return to their offices come with enormous economic benefits.
“But even with office workers at their desks three days a week by next year, we must remember that occupancy rates will still be significantly lower than they were pre-Covid-19.”
Alexander Jan, chairman of London’s Midtown Business Improvement District, said: “As the report highlights, the advent of a successful vaccine provides more than a glimmer of hope on the horizon for London and indeed the whole of the UK.
“What we now need urgently is a properly thought-through set of flexible policies aimed at getting the central London economy back on its feet. Pre-pandemic, central London provided nearly two million jobs. Central London produced nearly 11 per cent of national output, as well as the lion’s share of London’s £39 billion tax surplus, that is spent on public services elsewhere in the country.
“In the midst of discussions on building back better, levelling-up and sustainability we must not lose sight of the need to get economic growth, competitiveness and employment, up and running in London and the rest of the UK so that we can sustain so many of the vital public services that people all over the country rely on.”
Matthew Dillon, associate director at Arup, said: “To secure the strong, post-vaccine recovery we need in central London, we must create compelling reasons for people to be in their office.
“This means re-thinking the role of the workplace, of streets and of public realm, focusing on people’s experiences and placing more emphasis on health and wellbeing. Making our workplaces into locations that people feel comfortable accessing, with added space for collaboration, more meeting places, and improving access using low-cost, sustainable, active forms of transport, should be a priority. These will be key to bringing back workers, and with them, London’s economy.”