Ahead of the mayoral election, Sadiq Khan set out an ambitious pledge to boost economic growth across the city with a target of creating more than 150,000 “good” jobs by 2028. This week, a new report from the London Chamber of Commerce and Industry (LCCI) sets out just how challenging that might be.
Produced with the Centre for London think tank, the report looks in detail at the economic landscape across the city’s 32 boroughs. While acknowledging that London remains the most productive place in the UK, it acknowledges, it paints a stark picture of “deep geographical disparities” in output, productivity and opportunity.
Unsurprisingly, perhaps, central London is the capital’s economic powerhouse, generating 66 per cent of its Gross Value Added (GVA) in 2021. It also provides most the jobs, with Westminster, Tower Hamlets – home of Canary Wharf – and Camden at the top of the tree, rivalled only by the business clusters around Heathrow.
Productivity is concentrated in that same area, although – “alarmingly”, the report notes – only four boroughs, Tower Hamlets, Hounslow, Camden and Westminster, are currently recording productivity levels above the citywide average.
The figures reflect London’s recent sluggish productivity growth overall, at just 0.2 per cent a year since 2007, as well as revealing large variations between boroughs. Tower Hamlets generates £66.50 per hour worked compared with Lewisham and Haringey, bringing up the rear, with £28 and £30 per hour respectively.
Inner London also has more businesses – 10 per cent of alone are in Westminster – and a concentration of the most productive sectors, including finance and insurance, professional, scientific and technical, and ICT. These industries, along with the real estate sector which is more evenly spread across the city, produced more than half of the total GVA it produced.
Outer London, by contrast, has more manufacturing, although industrial land there is increasingly under pressure, and higher proportions of both lower paid jobs – 21.2 per cent of them pay less than the Living Wage Foundation’s London Living Wage – and residents with no qualifications.
The report highlights Barking & Dagenham as having the highest levels of deprivation among all London boroughs, with 42 per cent of children living in poverty, the smallest number of jobs and a contribution to the city’s economic output overall of just 0.7 per cent. There are significant variations within boroughs too, with Tower Hamlets, for example, heavily dependent on Canary Wharf for its overall ranking.
The research showed that London remains “in need of levelling up too,” in the words of LCCI policy chief James Watkins says in his foreword. “Policymakers must not view London as a single entity, where wealth and opportunity are spread evenly. Not all London boroughs are equal. We cannot overlook the capital when considering measures to boost economic growth in the UK.”
The report was a “roadmap for informed decision-making and collaborative action to ensure London’s prosperity is inclusive and sustainable,” said LCCI chief executive Karim Fatehi. “We look forward to working with businesses and local and national government to develop solutions to foster equitable growth across the capital.”
Centre for London chief executive Antonia Jennings added that “tailored solutions and collaborative efforts” were needed to ensure continued citywide economic success, while Jason Perry, Conservative Mayor of Croydon and executive member for business, economy and culture at the cross-party London Councils group, highlighted the need for wider devolution to the boroughs.
“We welcome this report and its recognition not only of the variations between boroughs, but also the variations within individual boroughs that can be just as stark,” Perry said. “This is further evidence of why we need more local decision-making and empowerment of boroughs to tackle the challenges in their communities, which will help us grow all of London’s local economies.”
Read the report in full here. X/Twitter: Charles Wright and OnLondon. Support OnLondon.co.uk and its writers for just £5 a month or £50 a year and get things for your money too. Details HERE.