The resurgence of our biggest cities in recent years has been symbolised by the boom of their commercial centres. The gleaming glass towers that have emerged out of the ground are signs of the renewed vim that the centres of London, Birmingham and Manchester have enjoyed since the early 1990s, with jobs, residents and visitors flocking to them once again. Covid will not see a reversal in this trend.
Tracking how people have started to use city centres again since the phased lifting of lockdown in June shows a large divergence in the ways they have bounced back. Small and medium-sized city centres – places such as Birkenhead, Bournemouth and Wigan – have seen strong recoveries. The opening of non-essential shops, pubs and restaurants saw patrons arrive back again, and by September average footfall was either equal to or above pre-lockdown levels.
The same is not the case for large city centres. The opening of amenities did not see large increases in the number of people on the streets of London, Manchester and Birmingham. Indeed, while the rise is obvious when looking at the data after lockdown restrictions were lifted in smaller city centres, there was much less change in the centres of the largest cities. They have, to a large degree, remained in lockdown.
The main reason for this is that the boon to them before March – the army of office workers they pulled in on a daily basis, who spent money in shops, cafés and bars – is now an Achilles heel. In Leeds and Birmingham, just 15 per cent of city centre workers have returned to their place of work. And in London and Manchester, that figure is around 16 per cent.
That is around 120,000 fewer workers coming into central Manchester (enough to fill the city’s Etihad Stadium twice over), and 1.5 million in central London. That’s quite a hole to fill, and is why the Prime Minister was so keen for office workers to return at the end of August, before the rise of the second wave of Covid-19 necessitated a reversal in the policy.
There have, of course, been many commentators who say that the Prime Minister was out of touch in his calls for people to return to their desks. They argue that now people have embraced working from home, they will not be in any rush to return. This is fuelled by companies such as Microsoft and Facebook telling employees they can work from home indefinitely. In this version of the world, those gleaming glass towers will become redundant, and our city centres will no longer be hubs of activity as we retreat into a digital world. Proponents of this view should look at the history of the city, and reflect on three key points.
The first is that cities have always been petri dishes of disease. Gathering people together helps us realise our key strengths, but it is also our weakness – people bring disease, and density helps disease spread. This is a threat that cities have had to deal with throughout the six millennia of their existence and, crucially, they have continually adapted too. The Romans invented aqueducts to bring fresh water into towns and cities, for example, and the Victorians invented sewers to take London’s dirty water away.
Secondly, Covid-19 is not the first epidemic that people in cities, in east Asia in particular, have lived through in the last 20 years. The current pandemic follows Sars, bird flu and swine flu. These diseases have not caused the hollowing out of successful cities there.Thirdly, the value of face-to-face interaction is likely to become more important to the UK economy in the coming decades.
Research by the Centre for Cities has shown how the UK economy has been concentrated in its city centres since the late 1990s, and this greater concentration has been at the heart of the boom that a number of large city centres have experienced. This concentration has happened despite the costs of a city centre office, and despite the rise of communications technologies (Skype was first released in 2003). This shows that certain types of businesses are willing to pay a premium for face-to-face interaction.
Covid doesn’t fundamentally change this. And given that it is “knowledge-based” businesses that are likely to play an ever-increasing role in the national economy in the years to come, city centres are likely to remain popular business locations, even if employees work some days each week from home. A recent Google poll of the tech giant’s employees suggested that a clear majority would like to return to the office at some point – even if it’s just on a part-time basis.
Where there are workers there will be demand for cafés, bars and restaurants. Our city centres will continue to be places of leisure as well as places of work. The very real policy challenge right now, though, is whether those current amenities will still be there when staff return. Many of these businesses will have been hanging on for workers to get back to their desks after a gruelling summer, and the second wave of Covid-19 may well spell the end for a number of them.
The Chancellor’s change of heart about offering support to businesses by effectively extending the furlough scheme might mean that many more hang on through the winter than would have otherwise been the case.
I do not doubt that many of them are “viable”, to use the Chancellor’s own words, in a world where Covid-19 is successfully managed. But he has already shown that he is reluctant to offer support indefinitely. And so while the workers will return one day, whether the existing set of high street businesses are there to serve them now seems to depend on this return happening by next spring, when the recent extension of financial support comes to an end.
Paul Swinney is director of policy and research at the Centre for Cities.