More of this, please. Photo: Getty.
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Believe it or not, London doesn't have enough offices

We're demolishing the equivalent of seven Shards, says Deloitte.

Okay, I know this sounds unlikely, but it’s true nonetheless: London is facing a worrying shortage of office space.

This, I suspect, may come as a bit of a surprise. Everyone with an internet connection will know that the capital is facing a housing crisis (if only because there’s a section of the media that talks of little else). But London's commercial property market seems to be thriving. There are huge new developments underway in places like Docklands and King's Cross, and the most visible change to the city over the last few years has been the growing number of skyscrapers dotting the skyline.

And yet, according to the ‘London Office Crane Survey’ published last week by Deloitte, "office space is likely to remain in short supply over the next two years". What gives?

One reason for the apparent disconnect is that the received wisdom that we're building a lot is just, well, wrong: office construction rates have actually been running at below their historical average for five years now. Okay, there are 230 skyscrapers on the cards – but the majority of these don’t have planning permission, and even if they go ahead, most will be residential. Basically, our perceptions are skewed by a few very visible projects.

But there's something else going on, too. While there's 9.2 million square feet of new office space currently under construction, another 4.5 million square feet is being demolished. This, notes Deloitte, is the equivalent of knocking down 7.6 Shards. Throw in an economic recovery, which means more businesses wanting more space, and thing are starting to get a little tight.

Eventually, the shortage should translate into a new wave of developments; that's likely to mean more skyscrapers, if only because of the eye-wateringly high cost of land. That, though, is some way off. This year will see a spike in the number of new buildings completed, but the lowest number of new starts since 2010; there's not much in the pipeline for next year either. All told, it’s likely to be 2017 before the current demolitions start to translate into a new wave of shiny new skyscrapers.

So for the immediate future, the main result of the shortage will be a rise in office rents. Already these are almost back to pre-recession levels, with a West End office now setting you back an average of £110.00 per square foot per year. Great if you own a building – not so great if you just want to rent one.

Here’s an infographic, summarising the report’s full findings.  

This is a preview of our new sister publication, CityMetric. We'll be launching its website soon - in the meantime, you can follow it on Twitter and Facebook.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Brexit. You can find him on Twitter or Facebook.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.