Foreword

The Economic Future of the Central Activity Zone (CAZ) Phase 1: Office use trends and the CAZ ecosystem Report to the Greater London Authority (GLA)

Introduction

Aims of the study

Our scope and phases of work

The report researches the future of the Central Activities Zone (CAZ), to assess the impact of both the COVID-19 global pandemic and Brexit on the CAZ in the medium term (2 – 5 years) and long term (5 – 10 years). The CAZ operates alongside the rest of the capital and therefore the study also examines the relationship this impact will have on London as a whole. Arup, Gerald Eve and the London School of Economics were appointed by the Greater London Authority (GLA) to carry out the work in two stages. Phase 1, this stage, is a baseline review of the CAZ with a particular emphasis on office use trends in the CAZ; interdependencies within the CAZ ecosystem; and, the interaction of the CAZ with the rest of London and the UK. Our focus in this report has been on the future trends among office workers and employees, and their impacts on the wider CAZ ecosystem. Other, important parts of the CAZ ecosystem, such as the behaviour of non white-collar workers, tourists and residents, have been considered to the extent that they are affected by white collar workers. Phase 2 will build three scenarios which will test the scale of the economic impact on the CAZ over the medium and long-term cycles. During both Phase 1 and Phase 2, qualitative research is being undertaken through subject expert focus groups to test sentiment, confidence and observations of performance in the CAZ during the pandemic. The work will culminate in a final report in spring 2021 which will provide policy recommendations and strategy implications to support a sustainable recovery for both the CAZ, and London. It is in this final report that the outcomes of a quantitative modelling exercise will be outlined. This model will look at three likely future scenarios, designed based partly on the findings in this report.

Our assumptions on COVID-19

This work is being produced during a hugely uncertain period. Phase 1 has been carried out during December 2020 and January 2021, a time in which a Brexit deal was announced, the UK left one pandemic-induced lockdown to enter another, new strains of the COVID19 virus spread rapidly, and vaccines began to be administered. The reader should bear this volatility in mind when studying this work. Our work assumes that the health emergency as a result of the pandemic has concluded within two years but, that some cultural and behavioural legacies may endure, including a fear of further pandemics, or new strains, and that there is not a further macro-economic shock. We also assume that the government response is yet to be determined (that is, we do not assume a particular set of policy responses in our work).