Central London’s local authorities and the Mayor of London have come together with business groups to develop an action plan to drive the recovery of the capital’s Central Activities Zone post-pandemic.
The Central Activities Zone (CAZ) is the beating heart of the capital, covering areas including the West End, the City, Southbank and Docklands. While a small area geographically, it is crucial for the success of the capital:
It hosts 2.2 million jobs, equivalent to 6.4% of all UK employment;
It generates 9.5% of UK economic output, and almost half (44%) of London’s economic output;
It is home to world-leading clusters, from finance and med-tech to higher education and hospitality;
The CAZ was hit hard by the pandemic, with entire sectors crucial for the area – including hospitality, and arts and entertainment – shut down for months. Analysis by the GLA finds that in 2020 alone, the CAZ lost out on £10.9bn in spending due to the decline in tourism and £1.9bn due to commuters switching to home-working.
The CAZ is bouncing back, but the recovery has been slower than the rest of the capital and the UK. In July 2022, footfall in areas within the CAZ was on average 45% lower than July 2019. Both tube and bus ridership remain lower in the CAZ compared to pre-pandemic than in outer London. Consumer spending in the CAZ has recovered more slowly than the rest of London. The recovery is also vulnerable to the energy crisis and the recession, with businesses facing both increased costs, and a decline in consumer spending.
A robust recovery in the CAZ is vital to driving the wider recovery across the capital and the UK as a whole. Six central London local authorities have worked together with the Mayor of London and business groups to develop the CAZ Futures Action Plan, which sets out how we can drive the recovery and evolution of the CAZ. The action plan sets out a shared vision for the CAZ post-pandemic. In order to succeed, it must offer:
A unique habitat – an attractive place, which is clean, green and safe, where people want to visit, where people want to work, and businesses want to locate.
Unforgettable experiences not available anywhere else, which draw people in, from world-leading museums and galleries to a vibrant night-time economy;
A space for innovation and growth – the best place in the world for people to collaborate and innovate, with world-leading clusters in the industries of the future.
The action plan sets out what boroughs and the Mayor will do to drive the recovery, including:
Minimising vacant units on high streets including through creative meanwhile uses;
Supporting the hospitality, arts and entertainment, and retail sectors to address skills gaps, and to improve pay and job quality;
Making the CAZ an exemplar of a net zero urban centre through decarbonising buildings, helping businesses reduce emissions, and promoting green skills;
Enabling a thriving 24-hour economy, including through every central London local authority developing a night-time economy strategy;
Driving world-leading innovation districts, working with businesses and business groups to support growth in the industries of the future.
The action plan also sets out the key changes needed from central government to unlock the recovery. This includes:
Reintroduce the VAT Retail Export Scheme – the UK is the only European country without VAT-free shopping. Reintroducing the scheme would boost Treasury revenyu by £350m and support 78,000 jobs;
Ensure TfL has a fair and sustainable funding settlement beyond April 2024, in order to keep London moving;
Reform business rates and introduce an Online Sales Levy in order to level the playing field between high street retailers and online giants;
Review ‘permitted development rights’, under which vital workspace can be transferred without approval into residential use;
Devolving further powers of employment and skills so that London can ensure businesses can access the skills they need, and residents can access opportunities in central London’s economy.
Cllr Kieron Williams, Chair of Central London Forward and Leader of Southwark Council, said:
“London’s Central Activities Zone is the beating heart of our great city. Its success generates prosperity for the whole of the UK. But the CAZ can’t stand still. It needs to adapt to a very different world post-pandemic.
“For the first time, London government has come together to set out a collective vision for the centre of London. We are committed to driving the recovery and evolution of the CAZ, and to ensuring that all our residents can share in the success of their city.”
Sadiq Khan, Mayor of London, said:
“Central London is renowned all over the world for its unrivalled shopping, culture and heritage. It is a massive contributor to the exchequer and driver of the UK economy.
“But the centre of our city is facing unprecedented challenges, impacting the jobs and livelihoods of many Londoners. Businesses in hospitality, leisure, culture and retail were disproportionately impacted by the Covid-19 pandemic and are still struggling to fully recover, while energy prices and other costs are soaring and consumer spending is being hit by the cost of living crisis.
“I am determined to build on the success of my Let’s Do London tourism campaigns in supporting the recovery of the centre of our great city. The CAZ Action Plan is a crucial part of that work, bringing together local authorities and agencies to deliver lasting improvements and build a better London for everyone. We can’t do it alone though – we need more support from central Government to get central London firing on all cylinders.”
