South London Sub Regional Economic Assessment

2010

For the South London Partnership

Early Draft for Consideration by Partners

Under no circumstances should any part of this document be used or quoted without permission

Team:

Kingston University

Dr P. Garside

Professor Sarah Sayce

Billy Clements

Kingston College

Peter Phipps

South London Business

Alena Harvey 1/ South London Sub Regional Economic Assessment: Introduction

1.1 An Introduction to the South London Sub Region (SLSR) The sub-region is defined as the seven London Boroughs of Bromley, Croydon, Royal Borough of Kingston upon Thames, Merton, Richmond upon Thames, Sutton and Wandsworth (Figure 1.1).

Figure 1.1 The SLSR within the London City Region.

Source: CERI, Kingston University

For many years the SLSR has been viewed as part of the Outer London belt which has been characterised as:

“On most indicators, Outer London is healthier, wealthier and greener than Inner London and indeed most urban areas in the UK. Its residents overall are highly satisfied with life in their neighbourhood, but would like to see improvements on some very local environmental issues, including crime, litter and anti-social behaviour.” 1

This localised caricature has dominated the discourse defining the SLSR for several decades and has reinforced both the image and the function of the area, within the wider regional economy, as a residential dormitory provider of highly qualified senior and managerial staff. Ultimately, this perception has simultaneously reproduced the highly centralised development patterns of the broader city region (which includes the Outer Metropolitan Area – OMA2) and reemphasised the associated notion that the separate Outer London economies are concealed around localised retail and public services.

1 GLA 2007 Outer London: Issues for the London Plan http://static.london.gov.uk/mayor/strategies/sds/london_plan/outer_london_issues_lon_plan.rtf

2 GLA Economics: Economic Evidence Base to support the London Plan, the Transport Strategy and the Economic Development Strategy, Page 26.

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This (highly dominant) stereotype has, over the last five years, been challenged through responses to the draft London Plan, the development of Sub Regional Development Plans and a more critical academic understanding of the complex nature of the Outer London economy3. This movement has lead to the production of the Mayor‟s Outer London Commission report4 which provides a more holistic understanding of the outer London economy and attempts to offer a less centralised development scenario than has previously been advocated for the city region. However, this is only a small step against decades of growth based upon unsustainable processes of development, which the report fails to fully acknowledge in terms of the possible consequences.

Figure 1.2 Adapted Key Diagram for the London City Region

Source: CERI, Kingston University

The actual SLSR is artificial in construct and as such it is not a self-contained sub-region. It has a long and varied history of development that underpins its contemporary linkages, mostly based upon the urban sprawl of London subsuming previous county towns, producing the now metropolitan centres, spill over residential estates and linear growth patterns along radial transport routes. As part of the wider city region it is no surprise there are significant labour market, business, leisure and educational linkages with adjoining areas. South London functions within London‟s wider central area and is influenced by proximity to central

3 Gordon, I (et al - LSE) (2009) London‟s Place in the UK Economy 2009-10 published by the City of London. 4 http://www.london.gov.uk/olc/questions/final-report.jsp

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London and the city. It is also influenced by the western corridor, London Fringe, M25 towns, Gatwick corridor, Thames Gateway, Surrey and Kent.

Figure 1.2 shows the linkages and corridors that are determined to affect the area from a city region perspective and the structural make up of all the sub regions. But this is based on current wisdom that tends to reinforce the centralised flow patterns that historically have created the current unsustainable circumstances.

Whilst the population of the area has increased since 1990 by 180, 000 (from 1,513,900 to 1,693,900) relative to London as a whole the area has witnessed a slight decline in terms of its population as a percentage of the wider region (from 22.3% in 1990 to 21.8% on 2009). This is primarily due to higher growth rates in central London and indicates that the area has generally maintained a growth rate broadly in line with the rest of the region. However, this simple regional comparison masks a wide variety of more complex demographic issues within the area as displayed in Figure 1.3 and which will also be illustrated later in this report.

Figure 1.3 Characterisation of the Population within the SLSR

Source: CERI, Kingston University

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In terms of previous work that has been undertaken to characterise the economic structure of the SLSR5 there is a reasonable consensus on its strategic areas, but certainly not on its development capacity.

“South London‟s key strategic areas are the Wandle Valley running through the centre of the sub-region, the River Thames to the north and west, Crystal Palace, the metropolitan centres of Bromley, Croydon, Kingston and Sutton and town and district centres.”6

The detail of these locations and the specific development sites within the area are shown in Figure 1.4. This is an attempt to represent the sum of the parts of the sub region by visually bringing together the respective sites and assets the area has to offer. It also represents the infrastructure within the area and is very much a characterisation of the different locations. However, this is also a very static picture of the sub region and does not reveal the full nature of the linkages and flows through the area. These are explored through the various sections within this assessment, because they are as equally important for understanding the existing economic processes at work in the area, as they are for defining the future challenges of the area and the wider region.

Figure 1.4 Key Strategic Areas with the SLSR

Source: CERI, Kingston University

To supplement this overview of the sub region a wide range of local documents were examined to assess the key issues facing each borough council. These were collated and

5 South London Partnership: South London Sub Regional Prospectus, Sub regional Development Plan, Sub Regional Economic Development Implementation Plan (with Action Plan) and the Overview of Key Issues Facing South London (for the Outer London Comission). 6 South London Partnership: South London Economic Development Implementation Plan.

4 synthesised into a key issues matrix (Appendix 1). This level of detail is not appropriate to include in the main text, however it clearly demonstrates the commonalties and differences across the sub region, mainly in terms of the vulnerability of the area and its perceived potential. The main issues are:

Economic

 High levels of economic activity – all LAs above GL average

 Public sector (Health particular) and consumer services employment important contributor to economy

 Diversity of occupation/economic base

 Importance of retail (consumer services) throughout sub region – Key met. centres of Kingston, Croydon, Bromley with network of smaller district and local centres – economies

 Industrial base to economy remains a key asset (Wandle belt)

 Importance of leisure/visitor economy sector to local economies

 SMEs constitute a major proportion of economy at LA level

o Growth of SMEs in financial/business services sector (pre-recession) and creative industries (increasingly media) - environmental sector seen as potential growth sector due to reputation

o Self-employment levels run relatively high throughout the sub-region

o Use of business support networks varied

 Loss of large corporates to London and South East (e.g. Surrey) an issue

 Lack of established commercial/industrial clustering – indistinct commercial identity

 Healthy enterprise and entrepreneurship levels (based upon VAT reg/dereg) and high levels of self-employment

o Varied longer term survival rates

Employment and Skills

 Low workplace based earnings/higher resident earnings

 Outcommuting (outflow of labour) particularly higher skilled residents

o Lack of high skilled positions (senior and management) to retain high skilled residents – losing to Central/West London boroughs

 Local variances in labour skills – large gaps between high skilled residents and identified pockets of low skills base, deprivation and unemployment

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 High proportion of lower skilled jobs within the sub-region

 Practical skills gaps identified by local employers in some areas (Business Surveys)

Infrastructure and Linkages

 Need improvements in transport infrastructure to support economic prosperity of the sub- region (both into London, cross sub region and orbital)

o Where strong transport infrastructure is in place (Richmond, Merton) seen as a major asset

 Building on links with major transport networks and facilities – Gatwick, London Underground, Biggin Hill

 Important potential of linkages with South East (Surrey, Kent), M25/M4 areas and the Gatwick triangle (identified high growth areas) – both physically and economically

o Identification of upstream/downstream supply chain linkages with these areas

Land Use and Property

 Loss of employment land to other development (particularly residential uses)

 Lack of new, quality commercial accommodation (particularly office) with low grade ageing stock suffering from vacancy as unsuitable for SMEs

 Lack of new industrial accommodation in the sub-region (apart from some areas) to support this sector

 Limited available supply of employment land in some areas with uncertain pipelines set against potentially large scale development pipeline sites depending on site access and infrastructure development

1.2/ A Brief Word on the Nature of this Economic Assessment Due to the institutionalised nature of the manner in which data sets are produced and the geo referencing which ties data to existing administrative and political geographies there are no data sets which easily align to the true functional economic geography of any area. Therefore whilst the spatial geography of the South London economy can be described it is not possible to support all aspects of its „true‟ economic geography with specific primary quantitative data. Therefore, in certain cases, qualitative data, based upon expert opinion and profession experience will be used to inform our story of place. These are represented here as fairly and as accurately as possible and provide a valuable insight into not just the area itself, but also the aspirations stakeholders have for the sub region.

The contemporary circumstances of the South London economy are intrinsically embedded within its historical development, its proximity to a wide range of economic markets, its accessibility and the previous visions/interventions of different policy and business communities. This is important to state, because no matter how objective assessments and data are deemed to be, due to the methodology and the implicit need of the work undertaken it will always present a skewed or partial version of „reality‟ and be used as part of a

6 vision/place making narrative which will inherently become part of its development process. Therefore whilst the aim of this assessment is to reveal the existing economic circumstances of the sub region, the limitations of the data and the potential political interpretation of the narrative are noted.

In addition to this there is also the challenge of distinguishing between what are the existing economic circumstances and what could be considered the development capacity of the area. This is a fundamental distinction, yet also essentially interlinked, because the future potential of the area is based upon an interpretation of the existing trajectory of the area. However, how this trajectory is measured and how this is interpreted is highly subjective depending upon the aims and needs of those making the interpretation. This needs to be understood in relation to those who have already told the story of South London and what this means in relation to the conflicting interpretations of the development capacity of the area.

Therefore, the fundamental approach of this assessment is to articulate the current state of the sub region in terms of its economic position and development and by doing so to define both the capacity of the area for future development and the flows that substantially link the area (or parts of it) to other locations that are part of the wider functioning spatial networks within the South East. This is undertaken within a context of examining the future sustainability of the city region, which critically questions the centralist vision of contemporary urban planners and policy makers, whilst considering alternative development scenarios for the sub region.

In terms of what is meant by economic, this assessment takes the view that within a developed capitalist society, all forms of development have an inherently economic component or influence to them. Therefore, it is essential to consider as wide a range of potential influences on the development of the area as possible, but simultaneously to make sure that it is interpreted or represented at a sub regional level. Ultimately, this means that a judgement call has been made on certain issues as to whether they have influence at this level and therefore warrant inclusion.

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2/ Review of Key Themes from Regional Strategic Reports

This section critically explores the views and perceptions of the sub region that have emerged from the regional perspective: GLA. This is particularly important because the bulk of the analysis examined here is used to legitimise and validate the objectives of the London Plan, which present the economic trajectory of the sub region in a very defined and interlinked manner with that of the wider region. This not only sets the context for the development of the sub region, but for future attempts to change its development. Therefore, it is essential to unravel the basis of these objectives to reveal any contradictions or misinterpretations about the sub region, and to reflect on the motives and sustainability of the regional ambition for the area.

2.1/ Commuting The key findings below are taken from the GLA‟s Working Paper 36 “Commuting patterns in London by qualification level and employment location” (Ennis, N, et al 2009) and reflect the existing problems with regard to travel to work patterns for not just South London but London as a whole.

The report shows that for any given place of work, employees in London with no qualifications travel shorter distances to work than people with high qualifications. The distance travelled varies by place of employment, with the largest centres drawing employees from the largest geographic area. So employees with no qualifications working in Central London generally travel further than employees with high qualifications working in many Metropolitan Town Centres.

As a result employment profiles for the boroughs in South London also indicate that those with no and relatively low qualifications tend to travel within their local catchment areas. But within the high cost boroughs where the level of workforce with this qualification profile is relatively low, there is a tendency to draw from a catchment area that spills over into neighbouring boroughs. As a result places such as Kingston, Richmond, Wimbledon and Bromley provide an inward commute for low qualification workers from Spelthorne, Hounslow and Bexley.

Figure 2.1

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Source: Census 2001

This is also confirmed by the core strategies for these areas and as Figure 1.1 shows, it is very much within the centre and north of the sub region where the highest percentage of people travel short distances to work and that around the key centres there are clear areas where this type of commuting does not happen for these local residents.

The smallest town centres appear to draw employees only from the immediate surroundings, which may indicate that small centres have only local impacts. Employees are likely to travel the furthest distance to work when there are relatively few other opportunities available locally.

This is true at all skill levels but particularly for jobs requiring high qualification levels there are very few locations with large numbers of suitable jobs, so these employees are most likely to travel furthest to work. In this case, only the Thames Valley competes significantly with Central London for employees, so a relatively smaller share of residents there commute to Central London.

As a result, the commuting patterns for those areas, such as South London with a relatively high proportion of highly qualified employees, are extremely skewed to longer commute times. The result of not creating suitable jobs for these workers in a more distributed pattern has obvious affects on not just their quality of life, but the wider environment and restricts more diverse local economic development.

This long distance travel is illustrated by Figure 2.2 which clearly shows the high impact in places such as Bromley, Wimbledon and Richmond.

Figure 2.2

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Source: Census 2001

The commuting research carried out by the GLA also revealed that the relatively few jobs filled by those with no qualifications are spread round London fairly evenly, apart from a large concentration in Central London.

2.2/ The Retail Industry At sub and regional perspectives the existing and future development of the retail industry is essential to many large and small scale centres. Particularly for the Metropolitan centres in South London that for a long time (apart from Croydon and Wandsworth) have seen very little development. Even in the centres where development is taking place (which has stalled in many cases due to the economic downturn), competition in other parts of the region and the South East will at best have a stifling impact on their future role.

The findings and observations outlined below are taken from the most recent GLA report “Consumer Expenditure and Comparison Goods Retail Floorspace Need in London” (GLA/Experian 2009).

Table 2.1

Top 20 Retail Centres in London 2006

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Source: GLA/Experian 2009

As can be seen from the table, of the top 8 centres in London half are located in South London (or of the top 10 half are located in South London). This alone shows both the extent to which the development of the area is dominated by this section of the economy, and its contribution to the wider London economy.

In addition, the GLA report also maps out the retail catchment areas of the key centres and these are shown in Figures 2.3-2.6. This shows the extent to which the economies of these centres is embedded within their surrounding areas, stretching far into the South East along major arterial transport routes and merging with the catchment areas of associated and adjoining urban areas.

Figure 2.3

Kingston Retail Catchment Area

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Source: GLA/Experian 2009

For Kingston this shows the extent of the northern barriers to its reach, impacted upon by the West End and the CAZ, including the physical restrictions of the River. It also reveals the other barrier catchment areas that have impacted upon its development in terms of Reigate, Guildford and Staines, the latter of which has more than doubled its retail floorspace in the last 6 years with the Two Rivers centre.

Figure 2.4

Croydon Retail Catchment Area

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Source: GLA/Experian 2009

The extent of the Croydon catchment area clearly shows its northern boundaries which finish short of the River, curtailed by more centralised activity areas, and the extent that it flows down towards Crawley over the M25, drawn by the major arterial road and rail networks in between Sevenoaks and Reigate.

To the east the boundary is marked by Bromley, however to the west, even the Secondary area overlaps and obscures the catchment area of Sutton.

Figure 2.5 reveals the size and extent of the Bromley catchment area and the high level of competition it exhibits with Croydon, and the Sevenoaks areas, which tend to curtail its secondary catchment areas.

However, it also shows the south eastward spread of this catchment area due to the limited nature of existing competition and the limiting impact of Bluewater and Lakeside in the north.

Something which needs to be considered as part of future trends.

Figure 2.5

Bromley Retail Catchment Area

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Source: GLA/Experian 2009

Figure 2.6 shows the extent of the catchment area of the fourth largest retail centre in South London: Sutton.

Its primary catchment area is very elongated, squeezed in between Kingston and Croydon, following the major arterial north to south routes down as far as the M25.

As with the case of Croydon the secondary catchment area also overlaps this location and once again reveals the high level of competition between these centres within the sub region.

Whereas the competition with Sutton (in terms of other town retail centres) outside of London is defined by the limit of its secondary catchment area coming into contact with Reigate.

Overall, these very historic centres have grown up over a long period of time and become part of the wider London geography; however their catchment areas reveal their long term relationship with the communities in Surrey and Kent.

The main problem, according to the GLA report which defines these centres, is that growth in these areas is set to stop and in many cases the centres will start to lose their rankings, due to increased competition from development within London and the South East.

“We see White City and Stratford rising up the turnover ranking as a result of their developments. Only the positions of the West End and Kings Road East are unchanged and

14 the remaining centres‟ ranks fall as a result of the increased turnovers of the expanding centres.” (GLA/Experian 2009).

Figure 2.6

Sutton Retail Catchment Area

Source: GLA/Experian 2009

In addition the report also stresses that diversion from Greater London to the South East is already a major sales driver for centres such as Bluewater and Lakeside and, to a lesser degree, town centres such as Reading and Guildford.

Of all the retail catchment areas that have been analysed there are clear predictions of growth for many central and new centres, but in the predicted period over the next 20 years the forecasts show no change in the catchment areas of South London centres.

Therefore, from the GLA‟s interpretation of the situation the retail situation in South London is potentially very vulnerable, being exposed to high levels of competition, irrespective of changing shopping mode patterns, reflecting a stagnant growth area with falling rankings.

Considering this is one of the cornerstones of the South London economy, supporting not just a vast array of businesses, but indigenous and diverse employees (including low and no qualification workers), the impact of a decline in this sector will not only have a disproportionate affect on this sub region, but on the most vulnerable sectors of the labour market within it.

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2.3/ Office Based Growth The London Office Policy Review 2009 (GLA/Ramidus) outlines the key pressures and potential development issues for office accommodation in the region and is one of the key strategic documents informing the draft replacement London Plan.

The report outlines the cyclical and structural changes taking place in the office market place and defines their impact on new and existing office centres.

In terms of cyclical issues the reports defines:

 the impact of the recession,  the rental and yield adjustment,  the fall in output-related demand  the development downturn

In terms of general structural changes these are defined as:

 the impact of financial supervision reforms on London‟s finance markets;  London‟s reputation as a global finance centre resulting from recent events;  the threat from other global centres and central government policy, particularly the tax regime.

However, the report also goes on to highlight very particular structural changes that are having a spatial impact:

“Actual structural changes underway that are already changing the dynamics of the London office market. In this category we include the emergence of a polycentric office market in Central London, which has implications for Outer London (OL); the impact of policy vis-à-vis an eastwards drift; the increased marginalisation of large numbers of OL centres (in purely office market terms), rationalisation in the public sector and new working patterns. The latter two are summarised here. We regard the twin trends of property rationalisation within the public sector and the growing acceptance of flexible working styles as key to the changing profile of demand within, and throughout, London.

The public sector, one of the largest occupational sectors, is now planning its occupation of office space in ways that would not have been envisaged as little as five years ago. Bearing in mind the scale of public sector jobs both in central and local government throughout London, the impact on local markets could be significant. Many of these are heavily reliant upon the public sector to underpin their already fragile office markets, and shrinkage therein is likely to have a disproportionate impact in locations which might be considered marginal in commercial terms. Growing numbers of organisations are adopting new working patterns.” (GLA/Ramidus 2009).

In affect future demand is changing due to the efficient use of space and the overall reduced need for it. What is happening is a structural change in which the second most expensive cost for most organisations is managed far more responsibly than has typically been the case in the past. Traditional assumptions about the growth of employment and the associated growth in employment space will need to be re-visited.

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All of these changes have direct impact in terms of a long term reduction in demand for office space, particularly in marginal employment centres. But this is on top of the decline in relocation opportunities which in the past did define the relationship between the centre and outer London areas, including the relationship with the OMA.

For example, the degradation of Central London salary weightings together with the decimating impact of technology on back office functions has led to a massive reduction in the relocation market to these areas. What is left of the relocation market today mainly seeks a low cost regional centre, or moves offshore.

In addition to this impact, the report not only outlines the overall degradation of the office sector across outer London but the increased competition from mega developments and office campuses than have emerged (and are emerging) in central London.

Current mega schemes have a potential pipeline of 4.23 million sq m; which compares to 2.3 million sq m delivered in mega schemes over the past 25 years. In percentage terms, the largest growth is projected for Hammersmith & Fulham, Tower Hamlets and Newham, reflecting the development of new office centres. The smallest growth is projected at Croydon, Kingston and Sutton. Croydon has a comparatively large office stock but a large proportion of the occupier base lies in sectors that are forecast to have weak demand, such as public administration. Ultimately, it is anticipated that the mega growth schemes will curtail any future centripetal drifty to outer London.

Central London has become a polycentric office market, with large off-pitch office campuses in places such as Broadgate, Canary Wharf, More London and Paddington. Such centres provide a rent discount, Grade A buildings, public realm and support services. It is believed that these campuses have soaked up demand that might otherwise have leapfrogged further to traditional outer London centres.

Table 2.2

Office Market Assessment Grid for South London

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Source: GLA/Ramidus 2009

As can be seen by the table, it is fairly obvious that the potential for office market growth in South London, according to this review, is extremely limited and many places might see a real decline. This is mostly based on the lack of strategic sites, poor infrastructure and limited pipeline.

Overall this report reaffirms a centralist policy and the status quo type development that is already underway, generally reducing the need or significance of outer London employment centres and undermining their ability to stake a claim for this type of market. But this can be a self fulfilling prophecy and the negative impact of this on the environment and the long term sustainability of these centres are not explored. This therefore offers a very limited interpretation of the wider contextual issues or the actual potential capacity issues that need to be addressed to provide an alternative set of scenarios to this centralist interpretation.

In addition it does not consider the weight of significance if the inevitable form of status quo development is actually allowed to take place, not just in hard economic terms but in all respects related to social and environmental concerns. If anything it certainly highlights the vulnerability of spaces and places in South London and the increased need for future intervention to keep these areas being net contributors to the regional and national economy.

2.4/ Industrial Land and Capacity The Industrial Capacity London Plan (Consolidated with Alterations since 2004) Supplementary Planning Guidance (2008) once again as with many other major documents informing the London plan alludes to the vulnerability of the South London sub region.

The guidance highlights the wide geographical variations in the demand and supply balance across London, across its sub-regions (as identified in the London Plan) and within

18 boroughs. This is due to constraints on the quality, availability and nature of the current supply, which means there may be local shortfalls in quality modern floorspace and readily available development land, particularly in parts of West and South West London.

The guidance also clearly notes the historic decline in manufacturing but indicates that this decline is slowing and that in many areas innovation and technological advancement are producing a demand for the „right type‟ of industrial area. This demand is derived from a competitive wealthy regional market and specialisation as industries move towards the production of higher value goods or become more closely associated with services such as those with an emphasis on research, catering or the leisure market.

In terms of this demand pattern, it is clear from the guidance that this has and will continue to impact in spaces and places that still have a manufacturing base and those places that are showing signs of innovation and specialisation. From the manner in which the vacancy rates are recorded it is apparent that South London is key to this continued demand, even though the report considers capacity to lie elsewhere.

The 2006 industrial land estimate for London includes 706 hectares of vacant land, an average vacancy rate of 12.7 per cent, which is a reduction from the rate of 14.7 per cent in 2001. The highest subregional rates of vacant land are found in North East and South East London (17 and 16 per cent respectively) and the lowest in South West London (4 per cent).

As a result the guidance considers it essential that, particularly, the South London sub region should be designated as restricted when it comes to the transfer of industrial land to other uses.

The research supporting the guidance concludes that within London three of the main areas requiring additional growth capacity directly affect the future of the South London sub region: Wandle Valley, Heathrow and the M4/A4 corridor and the Vauxhall Nine Elms Battersea Opportunity Area. This is based on the change in logistics, demand for waste management land and the growth in specialised manufacturing/services related industries.

Therefore, it is clear that in terms of industrial related business patterns the South London sub region is a viable economic sub region and the key issue for managing this is derived from understanding and adapting its capacity. This is a common theme in many of the strategic documents that discuss the future of South London and something which is far more open to intervention from the policy realm than many other driving factors.

2.5/ Central Gravity and Growth Areas – Challenging the Status Quo? Many documents, strategies and reviews that have been produced by the GLA clearly emphasise the importance of central growth and the potential growth of new key locations.

The Economic Evidence Base – October 2009 version to support the public consultation drafts of the London Plan, the Transport Strategy and the Economic Development Strategy states very clearly that:

“The development of London‟s radial public transport network has enabled the growth of Central London by reducing the cost of accessibility to a significant proportion of the region‟s population. Figure 2.3 shows that much of Central London can be reached on public transport within 45 minutes (minimum journey time) by over 1.5 million people. This shows

19 that the potential workforce for Central London is much greater than that for other parts of London. Indeed a similar picture is portrayed if the number of jobs accessible to residents within 45 minutes is considered (see Mayor‟s Transport Strategy, Figure 77). It also suggests that the access that businesses have to markets (either other businesses or people) is greater in Central London than elsewhere in London.” (GLA/Economic Evidence Base 2009).

This coupled with the perceived need to provide housing and link this to accessible business growth inevitably means that:

“The capacity for future housing growth is primarily located in parts of East London where there is a significant amount of redundant employment land. It is important that any housing developments are linked to areas with employment opportunities which, as shown earlier, means particularly Central London.”(GLA/Economic Evidence Base 2009).

GLA Working Paper 31 “Employment in London by firm size” also emphasises the significance of central London firm development as it highlights the importance of centrally based large sector organisations:

“The combined data also shows that 60 per cent of employment in London is in either a large private sector enterprise, a large public sector organisation or a large non-profit organisation.” (GLA/Prothero 2008).

The report defines in detail the significance large scale, predominantly central London employment, particularly the 1,365 private sector enterprises that employ at least 250 people within London (including the 110 ultra large London employers), as they are responsible for 49 per cent of London‟s total private sector employment.

This centrality and growth area significance is further highlighted by studies of specific sectors that are seen as critical to the London economy, such as the logistics sector (Working Paper 37, GLA/Thompson 2008). This sector is seen as an essential element in the stable functioning of the London economy and has potential to grow to accommodate planned growth patterns.

In South London those wards that have a high index of specialisation are not clustered together in the same way as elsewhere in London and are dispersed across a number of boroughs.

The same is less true in Inner London with Queenstown in North East Wandsworth having a particularly high index of specialisation for logistics employees. This is understandable given a number of prominent logistics locations there are such as New Covent Garden market and a concentration of courier and postal services.

However, the significant growth issues that are envisaged in this sector are once again driven by the wider development plan for London:

 The approval of London Gateway, DP World‟s proposal for a Deep Sea container Port alongside Europe‟s largest logistic park in the Thames Estuary just over the border of London in Thurrock;  Proposed new rail-freight handling terminals in the Greater South East. Locations include Howbury Park in Bexley, recently approved at inquiry, and Radlett in St

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Albans, where plans were refused by the local authority but have recently been resubmitted;  Interest by operators in using land at London Riverside for rail-based freight and associated logistics including the potential to deliver a high speed rail freight facility linked to High Speed 1 (Channel Tunnel Rail Link (CTRL).

And all of this does not take into account the widely debated centralised programme of development defined in the London Plan, which clearly accepts an inevitable pattern of development based along the lines of continued, unsustainable, existing trajectories. The notion of flood plain/estuary development and increasing commuter numbers set against an understanding of climate change is something that needs to be fully explored, within a context of providing viable alternatives of localised development around existing local economies with increasing diverse development.

This is something that has been raised as part of the Outer London Commission (The Mayor‟s Outer London Commission Report 2010), which has certainly gone some way to address the balance of the debate by highlighting the issues of:

 making the most of existing places  strategic outer London development centres  greater interregional working and corridor development  releasing the barriers to growth – particularly transport

But above all it is significant for actually raising the question/challenge of how to tackle the unsustainable long term problem inherent in existing approaches to development and how to make:

“London‟s „spatial strategy‟ more effective in coordinating investment beyond its traditional land use, transport and environmental areas of concern.”

In addition the Outer London Commission concluded that in terms of business capacity and growth potential, close location to international transport hubs will increasingly be a factor:

“Access to international transport links is an important factor in businesses‟ locational decisions, and airports will remain an important economic driver in outer London (particularly perhaps in west and south London).” (Outer London Commission 2010).

Figure 2.7

Density of origins by LAs for all SE Airports

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Source: GLA/Ennis – Come Fly With Me: Airport of Choice in Greater London

Which considering the linkages and use patterns for airports across the South East, as shown in Figure 2.7 (which does not include potential Biggin Hill development), it is fairly clear that the South London sub region is positioned particularly well to take advantage of this growth potential, if other transport and capacity factors were to be addressed.

However, the statements of the Outer London Commission are a very small scale challenge to the mainstream wealth of documents, reviews and strategies (including the London Plan) that reinforce and reproduce the concepts and belief that any form of „radical‟ change in thinking, let along policy implementation, to the traditional/status quo growth for London are unviable.

It is as much the weight of literature as it is the language used which tends to reinforce the basic notion of centrality, as there is little by the way of evidence or review that considers the negative aspects of this approach, particularly with respect to climate change and the reality of trying to engender sustainable communities. To truly consider an alternative set of development scenarios that challenge the status quo, a far more enlightened and balanced approach to sub regional development needs to be considered, starting with exploring the issues raised by the OLC in a wider context.

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3/ Key Economic Indicators

3.1/ The Structural Composition of South London The data in Appendix 2 represent the detailed economic structure of the sub region, its employment structure, the location quotients of all its industries and its level of GVA generated within the South London Sub Region from 1995 to 2007. They clearly show that within London and the South East out of the 19 sub regional economies it is in 15th place in terms of per head and index based figures. This highlights the incredibly vulnerable nature of the sub region, not just within the London area but also within the wider South East.

Of the 629, 242 people employed within the area the detailed employment data in Appendix 2 also reflects the bi-polar distribution of the employment sectors within the sub region, revealing the dominant sectors: retail, education, public admin, health, social work – but also the dominance of employment activities7, computer consulting and construction for Male Full time employment and the food and beverage groups for the Part Time workers.

The quotients in Appendix 2 reveal the structural strengths of the SLP area as they compare its structural composition with the surrounding economies of London, Outer London and the OMA. This does not reveal the size of the sector within the area rather the density of this type of employment as a comparative advantage to other areas.

Here the data show the quotient scores are above 2 for creative, arts and entertainment activities and for insurance, reinsurance and pension funding, except compulsory social security. Whilst these are not key employers only employing just over 3300 and 4900 respectively, they do reflect the uniqueness of the SLP economy set against other peripheral economies within the London City Region.

Perhaps more significant, set against the OMA, are the key employers that are concentrated within the area:

 Social work activities without accommodation  Public administration and defence; compulsory social security  Employment activities  Services to buildings and landscape activities

7 Employment activities 78.1 Activities of employment placement agencies 78.10 Activities of employment placement agencies 78.10/1 Motion picture, television and other theatrical casting 78.10/9 Activities of employment placement agencies (other than motion picture, television and other theatrical casting) n.e.c. 78.2 Temporary employment agency activities 78.20 Temporary employment agency activities 78.3 Othe r human resources provision 78.30 Other human resources provision

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Whereas there are less significant key employer differences between SLP and the Outer London area expect for architectural and engineering activities; technical testing and analysis.

As expected there are slightly less significant differences between the SLP economy and the total London economy, but where these do exist there is a particular representation of manufacturing industries in the sub region and in terms of key employers the main differences are:

 Sports activities and amusement and recreation activities  Residential care activities  Specialised construction activities  Other personal service activities

And finally there are even less differences between the SLP area and its buffer zone (adjoining authorities in London, Surrey and Kent), but once again where they do exist there is a significant representation of manufacturing in the sub region and in terms of key employers the main representation is in:

 Security and investigation activities  Residential care activities  Sports activities and amusement and recreation activities

Possibly the most significant areas that define the SLP area within the city region are its manufacturing industries, with quotients of 1.8 – 1.9 (depending on the sector), and whilst they may be low scale employers they are uniquely different to the rest of the City Region irrespective of which general areas are used for comparison.

The detailed figures for the employment analysis in the Appendix also reveal the dominance of part time employment within the sub region, which in comparison to other adjoining areas and even national trends, is another aspect of the area which displays its vulnerability.

The rest of this section outlines the broad economic indicators for the sub region and demonstrate in general terms the strengths and weaknesses, but mostly the changing character of the sub region. At a general level it is possible to see how some of the weaknesses displayed have become more defined over the past decade, due to both structural and cyclical changes.

3.2/ Basic Workforce Issues Figure 3.1

24

Full time Workers 3,500,000 3,000,000 2,500,000 2,000,000 London

1,500,000 South East Axis Title Axis 1,000,000 SLP OMA 500,000

0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: ABI

Figure 3.2

Part Time Workers 1,400,000 1,200,000 1,000,000 800,000 London 600,000 South East 400,000 SLP 200,000 OMA 0

Source: ABI

As Figures 3.1 and 3.2 show, over the last 10 years, the actual employment number for full time workers within the SLP area has remained fairly consistent whilst trends for the surrounding areas have moved more in line with economic fluctuations. This consistency of employment is particularly reflected in the number of part time workers within the area which continued to grow throughout the period, whilst surrounding and adjoining areas recorded a clear decline in 2000 and 2006.

This level of consistency (slight decline) in full time workers and constant increase in part time workers is clearly displayed in Table 3.1.

Table 3.1

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Full Time Workers

Area 1998 2008 change London 2,890,048 3,080,196 190,148 6.6

South East 2,353,162 2,593,534 240,371 10.2

SLP 436,690 429,778 -6,911 -1.6

OMA 1,820,905 1,953,845 132,940 7.3

Part Time Workers Area 1998 2008 change London 874,028 1,088,332 214,303 24.5

South East 1,071,922 1,164,178 92,255 8.6

SLP 158,051 199,698 41,647 26.4

OMA 798,397 872,193 73,796 9.2

Source: ABI

In terms of employment growth within the area it has all been due to an increase in part time employment, which has seen a steady increase across this decade, far more so than surrounding and adjoining areas.

Figure 3.3 highlights the changing (or not so) economic structure of the SLP area during the decade 1998-2008 in terms of full time workers broken down by broad industrial classification.

As can be seen the area is dominated by a reliance on financial services, which over the decade saw a decline and then revival toward 2008. Therefore, considering the economic impact of the most recent downturn it would be fair to assume that current employment rates in this sector stand at somewhere equivalent to their 1998 figures. Over this period there was also a significant percentage growth in public sector services, whilst retail and the leisure service sectors, witnessed a significant percentage decline in terms of this sectors contribution to full time employment within the area. This demonstrates that over the last decade the area has become even more reliant on Public Administration, Education and Health, witnessing a decline in Distribution, Hotels and Restaurants, whilst its third main area of employment (Banking, Finance and Insurance) has remained fairly static.

Figure 3.4 shows the percentage break down for the employment levels in the SLP area for 2008 set against those for surrounding and adjoining areas for full time workers. The obvious issue highlighted by these statistics is how much more the SLP area relies upon its Public Administration, Education and Health employers than its surrounding and adjoining areas. Also that the Banking, Finance and Insurance sector is still a significant employer within the area in comparison to other surrounding and adjoining locations, particularly in comparison to the OMA and broader South East region.

Figure 3.3

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35.0 Economic Structure of SLP Area Full time Energy and water 30.0 Workers

Manufacturing 25.0

Construction 20.0

Distribution, hotels 15.0 and restaurants

Transport and 10.0 communications

Banking, finance 5.0 and insurance

Public 0.0 administration,edu cation & health 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: ABI

Figure 3.4

100% Comparative Economic Structure 2008 Full 90% time Workers Other services 80% Public 70% administration,educa tion & health 60% Banking, finance and insurance 50% Transport and 40% communications

30% Distribution, hotels and restaurants 20% Construction 10%

0% Manufacturing London South East OMA SLP

Source: ABI

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Figure 3.5

40.0 Economic Structure SLP Area Part time Workers Energy and water 35.0

Manufacturing 30.0

Construction 25.0

Distribution, hotels and 20.0 restaurants

Transport and 15.0 communications

Banking, finance and 10.0 insurance

5.0 Public administration,educatio n & health 0.0 Other services 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: ABI

Figures 3.5 and 3.6 show the economic structure within the area and comparatively with other locations for part time workers.

This presents quite a different scenario for the area and it is significant due to the increasing dominance of this type of employment within South London.

Distribution, Hotels and Restaurants witnessed a decline in part time employment over this decade, whilst Public Administration, Education and Health saw a minimal rise in part time employment relative to the other sectors within the South London economy. Even though Banking, Finance and Insurance part time employment went through two peaks during this period (2000 and 2004), its percentage contribution to the employment levels in the South London economy remained fairly static during this ten year period.

Comparing the percentage breakdown of part time employees with surrounding and adjoining areas (Figure 3.6), it appears that in terms of the main employment sectors the SLP area closely represents a mixture of the of the wider South East and London economic structures, with a similar reliance on employment within Distribution, Hotels and Restaurants and Public Administration, Education and Health, but still a slightly higher dominance of Banking, Finance and Insurance part time employment.

Figure 3.6

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100% Comparative Economic Structure 2008 Part 90% time Workers Other services 80% Public 70% administration,education & health 60% Banking, finance and insurance 50% Transport and 40% communications

30% Distribution, hotels and restaurants 20% Construction 10%

0% Manufacturing London South East OMA SLP

Source: ABI

3.3/ Basic Firm Structure Figure 3.7

450,000 Total Number of Firms in SLP Area 400,000

350,000

300,000

250,000 London South East 200,000 SLP

150,000 OMA

100,000

50,000

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: ABI

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Figure 3.7 presents a very basic overview of the actual number of firms at a comparative range of spatial scales to demonstrate the growth rate (or not) in terms of actual firm units within the SLP area. As can be seen the growth rate in the SLP area in comparison to the surrounding and adjoining areas is much less in terms of actual numbers of firms across the decade from 1998 to 2008.

Table 3.2

Change in Firm Numbers by Size band and Comparative Location

Size band 1-10 1998 2008 change number number number %cha

London 295,298 350,969 55,671 18.9

South East 275,375 342,420 67,045 24.3

SLP 55,622 68,062 12,440 22.4

OMA 218,633 264,069 45,436 20.8

Size band 11-49 1998 2008 change number number number %cha

London 35,771 37,504 1,733 4.8

South East 37,553 41,198 3,645 9.7

SLP 6,076 6,448 372 6.1

OMA 28,087 29,623 1,536 5.5

Size band 50 - 199 1998 2008 change number number number %cha

London 8,995 10,045 1,050 11.7

South East 8,767 9,826 1,059 12.1

SLP 1,477 1,540 63 4.3

OMA 6,700 7,664 964 14.4

Size band >200 1998 2008 change number number number %cha

London 2,557 2,691 134 5.2

South East 2,023 2,147 124 6.1

SLP 373 363 -9 -2.7

OMA 1,599 1,645 46 2.9

Source: ABI

However, as Table 3.2 clearly shows the general pattern of firm change within the different areas is far more complex than the basic overview would lead us to believe. The changes in the size bands obviously show that whilst the overall growth of firms in the SLP has been modest in comparison to the other areas, the distribution of this growth rate across the different firm sizes is far more radical than in the other areas.

In terms of micro firms the SLP shows a growth rate that far exceeds the OMA and London and is only slightly behind the growth rate for the whole of the South East, at 22.4 % between 1998 and 2008.

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The next size band up (11-49), small to small medium firms, also displays a growth rate that is in excess of the rate for London and the OMA, but is certainly lower than that for the whole of the South East at 6.1% for the decade in question.

However, when we examine the growth rate of the medium and, particularly the larger sized firm categories we find this trend is reversed, with the SLP area showing a minimal positive growth rate for firms between 50 and 199 employees and a declining rate for firms with over 200 employees.

It is fairly apparent that whilst the SLP area has and continues to see entrepreneurial activity within start ups and smaller firm activity, it has become less attractive towards inward invest from larger employers. Something which London, the South East and the OMA have not witnessed during this decade.

If we drill down into this size band information we can start to understand the specific sectoral distribution of the growth patterns within the SLP area. Table 3.3 provides this level of analysis which reveals not just the growth, or decline, of each broad sector by size band, it also clearly demonstrates the magnitude of each sectors contribution to the SLP economy by highlighting the actual number of firms within each band.

Within the micro size band there are only three sectors that both make a significant contribution to the sub regional economy and experienced significant growth during this decade:

 Construction  Banking, finance and insurance  Public administration, education & health

Whilst there were some expected declines in this size category (manufacturing), it is perhaps surprising that the Distribution, Hotels and Restaurants sector also experienced a slight decline, something which will require further investigation.

Within the small to medium size sector (11-49) there has really only been a significant growth in the Banking, Finance and Insurance sector, however unlike the micro sector there was a small scale increase in the Distribution, Hotels and Restaurant sector.

Within the medium to larger size categories the key growth areas were Transport and Communications, but particularly Public Administration, Education & Health. Most of the other sectors experienced different rates of decline apart from Other Services, which also witnessed an increase within all size bands apart from the micro category. This is also something that requires further detailed investigation to expose the drivers and detail of this trend.

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Table 3.3

Firm Change Structure by Size band in SLP Area 1998 2008 change Size band 1-10 number number number %cha Agriculture and fishing 65 238 173 266.2

Energy and water 34 23 -10 -32.4

Manufacturing 3,459 2,777 -681 -19.7

Construction 4,563 6,470 1,907 41.8

Distribution, hotels and restaurants 14,835 14,532 -302 -2.0

Transport and communications 1,744 1,869 125 7.2

Banking, finance and insurance 21,265 31,416 10,151 47.7

Public administration, education & 2,384 3,558 1,174 49.2 health Other services 7,273 7,179 -93 -1.3 Size band 11-49 number number number %cha Agriculture and fishing 5 13 8 160.0

Energy and water 9 6 -2 -33.3

Manufacturing 492 319 -172 -35.2

Construction 349 265 -83 -24.1

Distribution, hotels and restaurants 2,065 2,213 148 7.2

Transport and communications 228 230 2 0.9

Banking, finance and insurance 1,196 1,383 187 15.6

Public administration, education & 1,426 1,550 124 8.7 health Other services 306 469 163 53.3 Size band 5--199 number number number %cha Agriculture and fishing 4 2 -1 -50.0

Energy and water 4 0 -3 -100.0

Manufacturing 121 55 -65 -54.5

Construction 55 50 -4 -9.1

Distribution, hotels and restaurants 346 346 0 -

Transport and communications 77 93 16 20.8

Banking, finance and insurance 349 335 -13 -4.0

Public administration, education & 457 572 115 25.2 health Other services 64 87 23 35.9 Size band >200 number number number %cha Agriculture and fishing 0 0 0 -

Energy and water 3 1 -1 -66.7

Manufacturing 34 13 -20 -61.8

Construction 13 14 1 7.7

Distribution, hotels and restaurants 76 68 -7 -10.5

Transport and communications 39 34 -4 -12.8

Banking, finance and insurance 104 100 -3 -3.8

Public administration, education & 84 110 26 31.0 health Other services 20 23 3 15.0

Source: ABI

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3.4/ Micro Level Decline Pattern In terms of the decline in micro firm activity within the Distribution, Hotels and Restaurants division, a fine grained analysis of the sector using the 4 digit SIC reveals the following:

 There was some growth within this sector in areas that have significant number of units within the sub region – particularly Restaurants, Catering, Retail Sales in Specialised Stores, Retail sale in non-specialised stores with food, beverages or tobacco predominating, Retail Sale in Clothing, Repair of Motor Vehicles.  The main decline in this size band, which have significant numbers within the sub region were - Bakers, Butchers, Fishmongers, Retail of household appliances, electrical goods & hardware, Off Licences, Bars, the Sale of Motor Vehicles and Parts, Sale of Textiles and Book shops – but also a wide spread decline in small scale wholesale operations.

As a result of the significance of this decline within this sector at this micro level just under 2,500 business units were lost in the sub-region between 1998 and 2008. The small scale retailer and the small scale wholesaler (the cornerstones of traditional town and district centres) making up the greatest proportion of this decline within the sub region.

A story that is not too unusual for locations across the country that have witnessed the decline of small scale shopping centres due to changes in work life patterns, a shift in cultural habits and social networks, dominant large scale retail patterns and insufficient planning capacity within the public sector.

In terms of telling the story of place this is however far more significant for South London, as a place that up until this point has (almost) managed to hold onto its cultural heritage within its small scale centres. Maintaining some sort of balance around this form of community cohesion set against the pervasive forces of large scale patterns of development and labour market commuting, which tend to erode social networks and social capital, is an essential element of building sustainable communities,

If the pervasive forces, which dominate the development processes within the sub region (far more than other sub regions), are allowed to continue then this inevitable decline will continue to escalate and take with it the micro businesses at the heart of the localities that already exhibit signs of dysfunctional tendencies. This is not a cry for the sub region to be preserved in aspic but a realisation that managing the decline of smaller centres needs to be considered very carefully, because the costs reach far beyond just the vacant floorspace or immediate change of use.

3.5/ ‘Other Service’ Growth Pattern Over the period 1998 to 2008 the figures also revealed a constant growth in the larger size bands within the Other Service classification, drilling down into this data set reveals the following areas where this growth took place and where there was significant impact on the sub region in terms of units and/or employees.

Size Band 11-49  Activities of other membership organisations not elsewhere classified  Library and archive activities

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 Artistic and literary creation and interpretation  Activities of religious organisations  Operation of sports arenas and stadiums  Other sporting activities  Hairdressing and other beauty treatment Size Band 50 -199  Motion picture projection  Artistic and literary creation and interpretation  Operation of sports arenas and stadiums  Other sporting activities  Physical well-being activities Size Band >200  Operation of sports arenas and stadiums  Gambling and betting activities

Ultimately this reflects the growth in leisure and sports activities within the region (and to a certain extent) the growth of the gambling and betting sector, that has also seen a significant growth in many other regions.

Club memberships and private memberships have become a facet of contemporary culture for those with sufficient disposal income, which underpins the growth in this particular sector of the economy.

3.6/ VAT and Firm Creation Figure 3.8 highlights the trends in net VAT registered firms within the SLP area and in comparison to other adjoining and surrounding areas. It shows that for the decade in question the net rate of change tended to follow these other locations and economies: if anything in a more stable trajectory.

Figure 3.8

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16,000 Net Change in VAT Registrations 14,000

12,000

10,000 London 8,000 South East South London Partnership 6,000 OMA

4,000

2,000

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: VAT Registrations

In terms of how this trend applies to different sectors, Figure 3.9 shows the net change by broad industrial classification for the same period for the SLP area. This demonstrates how the Real Estate, Renting and Business activities have been extremely erratic in comparison to other sectors when it comes to SME growth in the sub region. Whilst there has been a slight increase in some of the other categories (Construction, and to a certain extent towards the end of the period in manufacturing), the majority of the SME sector (at this level of disaggregation) demonstrates a fairly flat net change trend.

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Figure 3.9 2,500 Agriculture; Forestry VAT Registrations Net Change in SLP and fishing

Area by Industry Mining and quarrying; 2,000 Electricity, gas and water supply

Manufacturing

1,500 Construction

Wholesale, retail and 1,000 repairs

Hotels and restaurants

500 Transport, storage and communication

Financial intermediation 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Real Estate, renting and business activities

-500

Source: VAT Registrations

This erratic pattern, with a significant trough, in conjunction with the relatively stable trend in other major sectors is very similar to the patterns experienced across the boroughs of London and quite distinct from the surrounding and adjoining areas of the South East and the OMA. Appendix 3 reveals that the fortunes of the SME sector in the SLP area are far more allied to the intense fluctuations of the net changes within the London area than they are to those within the wider city region. This perhaps shows its lack of independence from the gravitational ebb and flow of economic activity within the Capital, particularly with regard to the linkages that business activity SMEs have into the regional economy. This reflects the transport infrastructure issues and supply chain issues with regard to the spatial markets of SMEs, that tend to provide their businesses locally within an environment dominated by the continual need and demand to service a highly centralised economy. Therefore, the pattern of SME development witnessed by the OMA and the rest of the South East, which did not experience such a severe trough as London and its sub regions, with regards to a net loss of business service SMEs during the 2002 period, did not protect or impact upon the South London markets to the extent one would expect considering their spatial relationship.

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However, set against this lack of independence is the ability of the sub region to create a better working environment for new businesses to survive in than all of the other London sub regions. As Table 3.5 displays, the highest percentage of survival rates for the region lie within South London (excluding the City).

Table 3.5

SME Births and Survival Rates 2008 1 Year 2 Year 3 Year 4 Year 5 Year Births per per cent per cent per cent per cent cent London 48,810 91.5 73.7 56.5 46.6 39.4

Inner London 26,190 91.0 72.8 55.0 45.3 38.3

Inner London Boroughs Camden 2,670 91.4 74.2 58.6 49.1 41.9 City of London 1,110 92.3 77.9 68.5 59.9 52.7 Hackney 1,360 93.4 76.5 59.6 50.0 43.0 Hammersmith and Fulham 1,760 90.1 69.3 51.7 41.2 32.7 Haringey 1,255 91.2 70.5 54.2 44.2 35.9 Islington 1,645 91.2 74.8 59.6 48.0 41.0 Kensington and Chelsea 1,515 91.7 73.6 58.7 49.8 42.6 Lambeth 1,485 90.2 69.7 52.5 42.8 35.4 Lewisham 910 91.8 74.7 57.7 46.2 37.9 Newham 870 92.5 70.7 52.3 43.1 36.8 Southwark 1,650 90.9 74.8 58.8 47.6 40.9 Tower Hamlets 1,500 91.7 72.7 56.3 47.0 39.7 Wandsworth 2,395 88.5 68.1 49.1 38.6 32.2 Westminster 6,065 90.6 73.2 50.5 42.0 35.8

Outer London 22,620 92.2 74.8 58.2 48.1 40.7

Outer London Boroughs Barking and Dagenham 460 90.2 73.9 55.4 44.6 39.1 Barnet 2,370 91.6 71.9 53.8 44.5 38.2 Bexley 780 92.3 76.9 59.6 50.0 43.6 Brent 1,690 91.1 68.9 52.4 42.0 34.0 Bromley 1,270 92.1 78.0 63.8 52.8 46.1 Croydon 1,405 91.8 76.2 59.1 49.1 41.3 Ealing 2,065 90.8 71.2 54.0 43.1 35.1 Enfield 1,230 93.5 76.0 60.2 50.0 41.9 Greenwich 755 93.4 75.5 57.6 47.7 39.7 Harrow 1,215 93.8 76.1 61.7 50.6 42.8 Havering 855 92.4 78.4 63.2 53.2 46.2 Hillingdon 1,145 91.7 76.4 59.8 50.2 41.9 Hounslow 1,225 91.0 75.9 60.8 49.8 40.8 Kingston upon Thames 775 95.5 80.6 65.2 56.1 48.4 Merton 1,195 90.8 70.3 54.0 44.4 37.2 Redbridge 1,115 92.4 73.1 54.3 44.4 36.3 Richmond upon Thames 1,365 93.0 79.1 63.7 54.2 47.3 Sutton 670 93.3 78.4 64.2 53.7 47.8 Waltham Forest 1,035 93.7 75.4 56.5 46.9 40.6

Source: ONS Business Demography

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This indicates a strong level of sustainability for the SME community within the sub region and a better long term return on investment in the area than in comparison to other locations within the region.

Ultimately, the overall trend lines for SME development in the SLP area do not show the dramatic changes (rates of growth or decline) as in its surrounding and adjoining areas, but they do demonstrate the greater stability of its business environment, even though it displays a certain lack of independence from the wider regional trends in some key sectors.

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4/ Labour Markets, Commuting and Sustainable Spatial Geographies?

4.1/ Regional Commuting Patterns and Life Style Choices Commuting is the one of the largest issues that links the spatial geography across London (and to the rest of the South East) for which there is relatively reliable data (a little old in the case of the Census) that is accurate and can be compared consistently over time.

The process of travelling to work is not just an act of travel; it is a life choice that affects our quality of lives, our ability to be productive, causes a significant impact upon the environment and creates a huge resource demand within the regional economy. Inevitably, for an efficient and long term sustainable economy to work it is essential that the distance travelled by and time taken in travelling to work is reduced to the shortest feasible, whilst still maintaining a function of the clustered agglomeration economies that provide its competitive edge.

Therefore, the notion of how diseconomies occur is really based upon the lag in productivity caused by the increasing volume and time taken for people to actually get to work. However, this in itself is really only a measure of lag impact on productivity and does not take into account many other sustainable factors that also will inevitably impact on the functioning of the wider agglomeration.

The commuting patterns in and around London and the South East demonstrate the extent of the interrelationship between the labour markets and the businesses within this area, but also the life style choices (or not as the case maybe) that people have made in terms of their environment they wish to define as home.

For example Figure 4.1 shows the mean and median house prices in Outer London in 2009. These set against the mean prices for London (£363,043), Inner London, (£464,678), South East (£253,905) and England (£216,493), show that for many this area (or at least parts of it) are a very specific choice for people to live in terms of location and demand which can command such high prices.

It is perhaps not surprising that in the top 9 outer London boroughs in terms of house price rankings 4 are located in the South London outer area, whilst Wandsworth (as an inner area) is also within this high end price bracket.

To live within these areas is a quality of life choice that many people make, if they can afford it based (in many cases) upon their incomes and ability to secure high salaries, but fundamentally based upon their commitment to commute.

This is a commitment that many people within and out side the region make, based upon a balanced (but not necessarily rational) set of decisions that they believe offers them (and their families in many cases) a quality of life that is sustainable whilst allowing access to the types services, accommodation and environment they perceive they require.

Figure 4.1

39

House Prices 2009 Outer London + Wandsworth

600,000

500,000

400,000

300,000 Median Mean

200,000

100,000

0

Brent

Ealing

Barnet Sutton

Enfield

Merton Harrow Bexley

Bromley Croydon

Havering

Hounslow Hillingdon

Redbridge

Greenwich

Wandsworth

Outer London Outer

Waltham Forest Waltham

Kingston upon Thames Kingston upon Barking and Dagenham Barking and Richmond upon Thames upon Richmond

Source: CLG Housing Live Tables

The house price figures also reveal the overall split within the sub region in terms of Croydon and Sutton, which are not just below the average for the sub region but considerably below the average for Outer London.

This reflects the economic geography of the sub region and localised divisions within the sub region, not just in terms of house prices but also in terms of commuting, educational attainment and income. But also the diversity of the economy and the nature of the relationship of people with their local areas.

Table 4.1 offers a generalised view of the numbers of people who commute out of their area of residence to another borough in terms of work for the whole of London.

As can be seen from this table there are many boroughs within the South London area that exhibit a very high percentage of commuting activity (Wandsworth 66% and Merton 60% of the workforce). And there are several (Kingston, Croydon, Sutton) that exhibit a relatively low level of activity. This would tend to support the issue that TfL raise that 60 % of journeys begin and end in Outer London.

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However, as stated above diseconomies are not just about the volume of people that move around. For in the case of Lambeth and Wandsworth, whilst the numbers are very large the distances and time taken are relatively small.

Table 4.1

Travel to Work Numbers for London Boroughs by Area of Residence

Area of residence Total Commuters Workforce Percentage

Lambeth 89639 130,745 69 Wandsworth 93639 141,186 66 Haringey 63114 95,736 66 Lewisham 75147 114,583 66 Hackney 51064 79,235 64 Hammersmith and Fulham 52592 83,022 63 Islington 50367 79,855 63 Southwark 67573 107,868 63 Kensington and Chelsea 46379 75,559 61 Merton 56839 94,930 60 Newham 51666 86,433 60 Waltham Forest 57853 97,774 59 Brent 69,273 118,704 58 Redbridge 61014 106,109 58 Greenwich 52028 91,588 57 Tower Hamlets 41970 73,953 57 Barking and Dagenham 37,192 65,869 56 Camden 51652 91,872 56 Ealing 78821 143,764 55 Harrow 49941 97,759 51 Barnet 74,387 145,912 51 Richmond upon Thames 45341 89,420 51 Bexley 51,202 103,635 49 City of London 2068 4,299 48 Bromley 67406 141,500 48 Enfield 57006 121,263 47 Hounslow 48429 103,616 47 Westminster 39265 89,471 44 Sutton 39612 90,293 44 Havering 45641 104,538 44 Croydon 64555 156,734 41 Kingston upon Thames 30704 74,877 41 Hillingdon 37051 117,035 32

Source: Census 2001

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Hence it is important not just to look at the numbers involved or the just the percentages, but also the distance travelled: which in the case of London can equate to considerable timescales.

Table 4.2 shows the percentage of the workforce within each borough that travel on average the furthest distance within London to get to work: this is between 10km and 20km.

Table 4.2

Travel to Work Numbers by Furthest Distance Travelled in London

Number of People who travel 10km Area of Residence Workforce Percentage to less than 20km

Redbridge 36,743 106,109 34.6 Merton 30,858 94,930 32.5 Bromley 45,145 141,500 31.9 Enfield 36,961 121,263 30.5 Greenwich 27,778 91,588 30.3 Bexley 31,373 103,635 30.3 Barnet 42,231 145,912 28.9 Richmond upon Thames 25,602 89,420 28.6 Waltham Forest 27,183 97,774 27.8 Barking and Dagenham 18,093 65,869 27.5 Harrow 26,468 97,759 27.1 Kingston upon Thames 20,057 74,877 26.8 Newham 22,136 86,433 25.6 Ealing 36,330 143,764 25.3 Croydon 38,901 156,734 24.8 Sutton 20,963 90,293 23.2 Lewisham 25,695 114,583 22.4 Brent 22,725 118,704 19.1 Hounslow 18,160 103,616 17.5 Havering 18,092 104,538 17.3 Wandsworth 22,698 141,186 16.1 Hillingdon 18,487 117,035 15.8 Haringey 14,830 95,736 15.5 Lambeth 14,433 130,745 11.0 Hammersmith and Fulham 7,677 83,022 9.2 Hackney 6,288 79,235 7.9 Southwark 8,163 107,868 7.6 Tower Hamlets 5,326 73,953 7.2 Kensington and Chelsea 4,307 75,559 5.7 Islington 4,432 79,855 5.6 Camden 4,832 91,872 5.3 Westminster 3,900 89,471 4.4 City of London 98 4,299 2.3

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Source: Census 2001

As can be seen from this table, and as might be expected, it is mostly the Outer London borough residents that travel the furthest distance. But just in terms of percentages, the South London boroughs are some of the highest exporters of labour over this distance (Bromley, Merton, Richmond and Kingston between a quarter and a third of the labour force).

The key questions therefore based on this type of information are where do these people travel to and what type of work are they engaged in. This is very important because it will provide an insight into the type of regional economy they are supporting, their life style choices, the costs to the regional economy and the environmental impact that these commuters are having and, when considered in relation to the house price data, the types of disparities that are being created inter and intra sub regionally.

4.2/ Commuting Patterns in and across South London To fully understand the geographical extent of the commuting pattern into South London and its linkages with the wider South East it was possible to map out the total commuting patterns into the sub region. This is shown in Figure 4.2 and clearly shows the vast extent and range of areas that people travel from to actually work within the sub region.

Figure 4.2

Source: Census 2001

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Once the transport network is taken into account it is fairly obvious why these commuting patterns exist across the South East.

Figure 4.3

Source: Census 2001

The commuting patterns which have developed over many decades reflect the major transport networks across the South East and particularly the major corridors to the SW (A3) the South (M23) and the SE (M20). These corridors are also supported by the rail networks, particularly down to the south coast in area around Brighton.

Whilst this SE network is very extensive, the linkages into these counties and areas beyond the Surrey and Kent borders are relatively small in comparison to the workers that travel into the sub region from adjacent areas or indeed move around within the sub region for work purposes.

If we take a closer look at the more significant local geography of the area, by focusing in on the adjacent local authorities to the sub region (something we could call the buffer zone) it is far more apparent where the significant functional geographies lie in terms of the sub region acting as a place of employment and drawing labour from outside of the area.

Figure 4.4

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Source: Census 2001

Figure 4.4 clearly shows where the strongest linkages are with regards to the SE and other London local authority districts.

The strongest links in terms of bringing people into the area are to the west where Richmond and Kingston have a very close affinity with the labour force in Hounslow and to the north where several boroughs have very close ties with the labour markets in Lambeth and Lewisham.

Outside of the sub region the strongest connections, in terms of labour market attraction, are with Elmbridge, Epson and Ewell and Reigate and Banstead (and to a lesser extent Mole Valley).

All of these external connections represent both the need in the sub region for importing labour, particularly in terms of middle to low wage earners, to service the public sector, retail and leisure industries, and the radial linkages that that allow relatively convenient access along the arterial routes.

Whilst these connections are relatively strong it must be recognised that the number travelling in from these areas on a daily basis is quite small in comparison to the numbers travelling internally within the sub region or even travelling from the sub region elsewhere or across the sub region to other locations, to which we will return.

45

Therefore it must be recognised that, apart from certain locations, the labour markets surrounding the sub region, especially to the south east, are fairly isolated, both a reflection of the demand and the access issues for cross border travel.

This is also relatively true of the cross border links in terms of exporting labour from the sub region to other parts of the South East outside of London.

Table 4.3

Export of Labour from the SLP sub region to the South East

area of residence Kingston Richmond Type of Employment Bromley Croydon upon Merton upon Sutton Wandsworth Thames Thames 11,43 Total 8,164 11,816 9,642 5,620 8,612 5,014 5 Higher managerial occupations 769 858 1,045 673 1,894 739 885 Higher professional occupations 1,129 1,511 1,722 1,267 1,857 1,325 1,428 Lower managerial and 2,802 4,060 3,302 1,861 2,940 3,995 1,708 professional occupations Intermediate occupations 880 1,781 1,061 605 670 1,994 321 Small employers and own 442 467 316 165 268 425 121 account workers Lower supervisory and technical 741 1,020 636 412 354 1,013 187 occupations Semi-routine occupations 650 1,136 724 291 280 985 144 Routine occupations 560 642 502 261 203 713 78 Never worked and long-term 0 0 0 0 0 0 0 unemployed Full-time student 191 341 334 85 146 246 142

Source: Census 2001

Table 4.3 shows, as might be expected, due to proximity, size and labour markets, Croydon exports the highest number of workers into the South East and this tends to be towards the Gatwick/Crawley area as does Sutton. Richmond and Kingston also export a reasonable amount of people on a daily basis, particularly towards the Heathrow area.

Overall the main category of export tends to be in the lower managerial and professional occupations, and to a certain extent the higher professional occupations. This tends to be due to the greater spatial mobility of these employees, who are more inclined to travel further distances and are more flexible in terms of their job search options.

But, as with the employees moving into the area on a daily basis from the South East, the numbers being exported are relatively small in comparison to the numbers moving around the area, through the area or from the area into Central London.

In terms of the impact on the transport system, the through journeys are extremely significant to the sub region.

Table 4.4

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Through Journeys in the South London Sub Region from the South East

Area of residence Central London City of London Westminster Crawley 2161 490 586 Elmbridge 10772 2,420 3,366 Epsom and Ewell 5988 953 1,766 Guildford 5059 1,168 1,642 Hart 2055 501 618 Horsham 2727 658 840 Maidstone 5086 1,161 1,243 Mid Sussex 5054 1,461 1,388 Mole Valley 4059 811 1,313 Reigate and Banstead 7144 1,470 1,899 Runnymede 2542 444 809 Rushmoor 1505 312 489 Sevenoaks 10594 2,655 2,478 Spelthorne 3176 414 994 Surrey Heath 2144 434 713 Tandridge 5294 1,204 1,469 Tonbridge and Malling 6152 1,584 1,458 Tunbridge Wells 5881 1,809 1,503 Waverley 4215 1,065 1,348 Woking 4849 1,157 1,484 Totals 96457 22,171 27,406

Source: census 2001

As Table 4.4 shows the total through journeys from districts within the South East, that have to cross the sub region, to get into Central London is very close to 100k per day and 50% of this traffic is travelling directly to just two areas: Westminster and The City of London.

Essentially this reflects the centralised geography of the labour markets within this part of the South East, which tends to rely upon localised district centres for employment or a long distance commute into Central London.

This however is just part of the strain on the infrastructure of the sub region and as Figure 4.5 shows it is the most congested sub region outside of the centre. This is therefore a problem for the sub region not just in terms of the notoriously bad orbital connections, but also for the arterial radial connections that support not just the area but also the central economy.

To highlight the notoriously poor orbital connections and the extent of the journeys with the sub region (particularly within individual boroughs), Table 4.5 details the number of commute journeys within the area between partner boroughs.

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Figure 1.5

Highway Congestion in London

Source: GLA Econimic Evidence Base 2009

Table 4.5

Internal Commute Patterns within the SLP Sub Region

area of workplace Total Area of Outside Kingston Richmond Bromley Croydon upon Merton upon Sutton Wandsworth residence Own Area Thames Thames within SLP Bromley 9505 63,942 6,269 233 648 191 795 1,369 Croydon 20988 5,147 78,408 826 3,517 484 6,742 4,272 Kingston upon 11138 74 635 33,434 3,042 3,791 1,191 2,405 Thames Merton 20521 315 3,191 3,515 31,262 1,348 3,739 8,413 Richmond 7005 64 315 3,547 842 33,928 250 1,987 upon Thames Sutton 21933 516 7,605 3,119 6,723 754 38,224 3,216 Wandsworth 11281 328 1,499 1,809 4,333 2,329 983 40,580 Total 102371 70386 97922 46483 50367 42825 51924 62242 Source: Census 2001

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As Table 4.5 demonstrates by far the greatest proportion of travel within the sub region occurs within individual boroughs, which would equate to distances of between 2km and 10 km, depending on the borough in question.

However, one of the most striking issues within this table is the relatively limited cross border travel from some authorities into the rest of the sub region. Richmond especially only exports just over 7000 people into jobs within the rest of the sub region which is far less than many local authority areas outside sub region.

Bromley, Kingston and Wandsworth are the middle exporters of people into employment within the sub region outside of their areas, but these are only similar to the number coming in from some adjoining SE districts and significantly less than the numbers coming into the area from Lambeth and Lewisham.

Only Merton, Sutton and Croydon are the significant contributors of labour into the sub region outside of their area and show clear signs of a combined labour market (Croydon and Bromley to a less extent).

This is a product of the size of these labour markets, the density of employment, transport access and diversity of jobs within this pooled area. However, it is still significant, that irrespective of this type of linkage, the main connections within the sub region are mostly with adjoining boroughs. The barriers to travel within the sub region are very evident within these patterns and for some boroughs there is virtually no connection whatsoever, particularly at the extremes of the sub region.

These travel patterns and labour market economies are the product of many decades of development, defining the geography of the area, based upon localised economic centres and the general centrality of development around an urban core, which in many ways does not fit with the administrative boundary of the sub region.

To highlight this case even further and to start to question to logic of maintaining centralised forms of development at such a high level of urban agglomeration, travel from the sub region to the rest of London needs to be assessed.

4.3/ Commuting Patterns from South London The total number of people travelling from the sub region to the rest of London is 295, 725 and Table 4.6 shows where these people are exported to on a daily basis.

This means that, with the through journeys, around 400k people a day are travelling across the sub region (with journeys in excess of 10km), over 100k are travelling within the sub region from one SLP borough to another, and 320k are travelling within their own borough.

In total this means that on average 820k people a day are using the sub regional infrastructure, which does not take into account casual, school runs, shopping and leisure trips of any kind.

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Table 4.6

Commute Numbers from SLP Sub Region to the rest of London

area of residence Richmond Kingston upon Area of workplace Bromley Croydon Merton upon Sutton Wandsworth Thames Thames Barking and 131 82 3 33 16 29 34 Dagenham Barnet 161 220 119 189 180 78 300 Bexley 3,197 304 30 49 12 61 70 Brent 197 319 187 248 340 133 407 Camden 3,774 3,257 1,536 2,937 2,504 1,442 7,142 City of London 9,853 5,918 2,873 6,044 4,835 2,558 13,943 Ealing 285 409 473 549 1,462 302 973 Enfield 82 122 38 51 45 33 117 Greenwich 2,590 539 59 180 65 102 261 Hackney 722 594 186 445 289 229 1,048 Hammersmith and 852 1,293 1,328 2,305 3,183 853 6,228 Ful Haringey 132 184 37 133 55 51 225 Harrow 60 94 66 75 160 45 134 Havering 118 84 16 19 16 27 32 Hillingdon 241 453 1,060 531 3,380 388 844 Hounslow 279 569 1,481 835 6,870 551 1,697 Islington 2,094 1,753 712 1,418 1,019 677 3,391 Kensington and 1,249 1,476 843 2,215 1,740 884 6,211 Chel Lambeth 3,563 6,836 1,025 3,391 1,214 1,831 5,952 Lewisham 5,367 1,560 73 255 82 269 412 Newham 426 202 79 145 58 94 211 Redbridge 101 58 34 42 6 26 58 Southwark 6,057 4,517 1,034 2,292 1,213 1,409 4,089 Tower Hamlets 3,377 2,006 829 1,710 1,208 869 4,031 Waltham Forest 201 138 28 75 50 41 138 Westminster 12,792 10,580 5,417 10,152 8,334 4,697 24,410 Column Total 57,901 43,567 19,566 36,318 38,336 17,679 82,358

Source: Census 2001

Within the above table the top three destinations for each of the SLP boroughs have been highlighted to reveal their closest partners in terms of labour market connections. From this it is obvious that most boroughs have a fairly strong relationship with Central London, some more than others, but also that some boroughs have a special relationship with one or two labour markets that are not part of the usual flow of people. Richmond and Hillingdon/Houslow is a fairly obvious one, determined by the Heathrow labour market area and associated industries.

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Of all the boroughs, Kingston perhaps has the most evenly distributed connection with the rest of the London boroughs outside the sub region, and less of a focus on central employment. This would critically be a factor of its poor transport infrastructure into the centre (in comparison to the other boroughs), its diverse and highly educated labour force.

4.4/ A Sustainable Future? Overall the SLP sub region exports approximately 250k people per day into 9 Central London boroughs and over 120k per day into just 2: Westminster and the City of London.

If we were to calculate the cost of this average journey (average journey time 1hr each way) and what it means simply in terms of person days, it would equate to just over 60,000 person days a day taken up by travel. Based on the types of salaries earned within the sectors that these commuters are involved in, this would equate to a huge daily cost in terms of personal GDP.

However, apart from this huge labour cost (and drag on productivity) it is also clear that there are many other issues at stake, some of which, such as the quality life for the individuals and communities, it is not possible to quantify here and some of which, such as the environmental impact, it is possible to allude to.

Table 4.7

Lowest 12 Boroughs for Carbon Emissions 2007

Per Capita Ind and Road Emissions Area Comm Domestic Transport Total Population (t) Bromley 378 766 343 1493 300.7 5

Richmond upon Thames 320 450 224 995 180 5.5 Lewisham 298 536 269 1104 258.5 4.3 Hackney 295 406 175 877 209.7 4.2 Havering 290 545 444 1280 228.4 5.6 Harrow 282 509 165 957 214.6 4.5 Waltham Forest 275 468 193 937 222.3 4.2 Haringey 270 507 195 973 224.7 4.3 Merton 265 409 173 850 199.3 4.3

Kingston upon Thames 247 350 241 840 157.9 5.3 Sutton 239 418 185 845 185.9 4.5 Redbridge 231 539 289 1060 254.4 4.2

Source: DECC – Measure Kilotonnes of Carbon

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At present of the lowest 12 boroughs measured by carbon emissions for Industry and Commerce, 5 of them are within the sub region.

This is a clear indication that within these locations at present they have the capacity to be able to increase their business contribution to the London economy without causing an excessive increase in emissions to dangerous levels. This is both on a local, regional and international basis.

Table 4.8

Highest 8 Boroughs for Carbon Emissions 2007

Per Capita Ind and Road Emissions Area Comm Domestic Transport Total Population (t) Westminster 2466 483 336 3285 234.1 14 Tower Hamlets 1596 364 306 2266 215.3 10.5 City of London 1523 20 66 1609 8 201.1 Camden 1118 406 170 1695 231.9 7.3 Hillingdon 1032 560 570 2164 250.7 8.6 Southwark 899 486 270 1657 274.4 6 Kensington and Chelsea 768 394 174 1336 178.6 7.5 Newham 727 451 298 1477 249.6 5.9

Source: DECC – Measure Kilotonnes of Carbon

Whereas the top that have the highest emissions account for where 242k people per day travel to in Central London from the sub region to work.

At the moment the cost in terms of health alone are significant issues as to why this type of centralist policy cannot be allowed to continue, but the long term implications are even more serious on the local environment and the global climate.

All of this clearly indicates the huge problems associated with the labour markets connections in and around South London and the essential need to critically evaluate the centralist policies that exacerbate this type of development.

Ultimately it is not a sustainable agenda, which impacts on the communities where people travel from (dormitory societies deprived of social capital with polarised inefficient local economies) and the communities where they travel to (congested environmentally dangerous space). Not including the impact on the individuals, the huge cost of moving them, the drag on productivity and the negative impacts on the wider environment.

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5/ Workforce and Worklessness

5.1/ Key Workforce Statistics The below series of figures represent the key workforce indicators for the SLP area set against its surrounding and adjoining areas. However, before these are discussed Table 5.1 reveals the latest numbers that are involved within the SLP workforce area to give an indication of the actual size and percentage of the workforce issues.

Table 5.1

Key Workforce Statistics for SLP Area 2008/09

number denominator percent

Economic activity rate - working age 894,500 1,098,200 81.4 Employment rate - working age 835,200 1,098,200 76.0 % of working age who are employees 708,000 1,098,200 64.5 % of working age who are self employed 125,200 1,098,200 11.4 Unemployment rate - working age 59,300 894,500 6.6 Unemployment rate - 16+ 60,500 932,200 6.5 % who are economically inactive - working age 203,800 1,098,200 18.6 % of working age who are economically inactive - want a job 59,300 1,098,200 5.4 % of working age who are economically inactive - do not want a 144,500 1,098,200 13.2 job Source: Annual Population Survey

As can been seen the economic activity rate is relatively high and the unemployment rate relatively low for figures representing an economic downturn. However, the key impacts of public sector decline have not been fully recorded within this context.

5.2/ Economic Activity Rate Figure 5.1

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84.0 Economic activity rate - working age 82.0

80.0

78.0 London South East 76.0 SLP OMA 74.0

72.0

70.0 2004/5 2005/6 2006/7 2007/8 2008/9

Source: Annual Population Survey

As Figure 5.1 demonstrates the economic activity rate was still growing in the SLP area up until the end of 2009, unlike in the surrounding areas of the South East and the OMA. And whilst the economic activity rate was growing within London during this time, the rate in the SLP area was far in excess of the regional average.

Therefore in terms of activity rate the SLP area shows clear signs of catching up with its surrounding areas, with the continued potential for high levels of participation from its workforce. However, this should not be confused in terms of a highly productive sub regional economy as the GVA figures demonstrate that, whilst activity is high and growing, the area itself is constrained by low productivity sectors and a vast amount of outward commuting to high productivity sectors in other central locations.

In terms of activity, this clearly reflects the fact that the potential exists if the opportunities could be provided in a more localised setting.

5.3/ Unemployment and Economically Inactive Figure 5.2

54

9 Unemployment rate - 16+ 8

7

6 London 5 South East 4 SLP 3 OMA 2

1

0 2004/5 2005/6 2006/7 2007/8 2008/9

Source: Annual Population Survey

Figure 5.2 indicates that whilst the unemployment rate in the SLP area has been consistently higher than that in the South East and OMA, it has tended to lag behind and follow the general London trend.

However the recent recession that has hit all areas, as indicated by the 2008/9 statistics, appears to have disproportionally hit the SLP area, widening the gap between the sub region and the South East and OMA (which for the previous three years had been closing) and bringing the rate for the area closer to that for the London average.

This certainly ties in with the narratives from the sub regional workforce support networks and the Sub Regional Interim Work and Skills Plan, which clearly indicate that, due to the structural dependence of SLP residents for employment within financial and business services, the sub region is at an inherent disadvantage due to the nature of the current economic downturn.

This characteristic is also displayed in Figure 5.3 which shows the number of economically inactive who want a job. The numbers in this category relative to surrounding areas has grown in the sub region in the run up to the downturn and during the peak impact of the crunch on the financial services sector during 2009.

Figure 5.3

55

8 % of working age who are economically 7 inactive - want a job 6

5 London 4 South East

3 SLP OMA 2

1

0 2004/5 2005/6 2006/7 2007/8 2008/9

Source: Annual Population Survey

As the sub region has very high economic activity rates and, in the main, a very high cost of living there is little opportunity for long term unemployment and inactivity. The result, as shown in Figure 5.4, is that inactivity rates are relatively low in comparison to the London average, but do tend to follow the trends within surrounding areas.

Figure 5.4

25.0 % of working age who are economically inactive - do not want a job 20.0

15.0 London South East 10.0 SLP OMA

5.0

0.0 2004/5 2005/6 2006/7 2007/8 2008/9

Source: Annual Population Survey

This does not mean that relative/absolute deprivation and low income groups do not exist within the sub region; it means the relative exclusion of these groups is even greater than would be experienced by groups in other sub regions. This results from a greater

56 polarisation of the social dynamic within the south sub region and a less effective framework of support/investment triggered by the isolated and sparse spatial patterns of these groups.

5.4/ Self Employment Figure 5.5 presents one of the key statistics that differentiates the sub region from its surrounding areas: the percentage of people who are self employed.

Figure 5.5

11.6 % of working age who are self employed 11.4 11.2 11.0

10.8 London 10.6 South East 10.4 SLP 10.2 OMA 10.0 9.8 9.6 2004/5 2005/6 2006/7 2007/8 2008/9

Source: Annual Population Survey

The sub region displays very high percentages of people who are self employed in comparison the rest of the South East and London. For this section of the economy it is much closer in its structural make up to the OMA, which during the same period has displayed (at times) equal and greater to percentages of self employed.

It has been recognised for a long time through all the boroughs in South London that this section of the workforce is a critical part of the sub regional economy, and these figures show that this is going to be an increasing issue. This has implications for business support mechanisms, premises, home working/technology requirements, transport and procurement procedures which will require further investigation.

5.5/ Structure of the Residential Workforce Figure 5.6 presents the comparative picture of which industries the residents from the SLP area work in (not as in the case of the ABI which shows the jobs within the area). This is significant because it clearly shows, more so than surrounding and adjoining areas, the structural dependence of the labour force within the area upon two key employment sectors:

 Banking, Finance and Insurance  Public Administration, Education and Health

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This is of no surprise, but it does serve to demonstrate the vulnerability of the area to the current downturn and future spending reviews.

Figure 5.6

35 % of Residents Working by Industry: 30 SLP and Surrounding Area, 2009 agriculture and fishing energy and water 25 manufacturing

20 construction distribution, hotels 15 and restaurants transport and communications 10 banking, finance and insurance public admin. 5 education and health other services

0 London South East SLP OMA

Source: Annual Population Survey

Figure 5.7

40 % of Residents Working by Industry: 35 London Sub Regions 2009 agriculture and fishing

30 energy and water

manufacturing 25 construction 20 distribution, hotels and restaurants 15 transport and communications banking, finance and 10 insurance public admin. education 5 and health other services

0 SLP Central London East London North London West London

58

Source: Annual Population Survey

Figure 5.7 reinforces the level of this structural dependency within the SLP sub region, as it compares its workforce composition with other London sub regions. Whilst other sub regions display a slightly more dispersed level of activity across the main industrial sectors, the numbers once again confirm the dominance of just two industrial sectors within the SLP area.

Figure 5.8 gives a clear indication of the occupational structure of the SLP area in comparison to its surrounding and adjoining areas.

Figure 5.8

25 % of Working Residents by Occupation in SLP and Surrounding

Areas 2009 % all in employment who are - 1: managers and senior officials

20 % all in employment who are - 2: professional occupations

% all in employment who are - 3: associate prof & tech occupations 15 % all in employment who are - 4: administrative and secretarial occupations % all in employment who are - 5: 10 skilled trades occupations % all in employment who are - 6: personal service occupations

% all in employment who are - 7: 5 sales and customer service occupations % all in employment who are - 8: process, plant and machine operatives 0 % all in employment who are - 9: elementary occupations London South East SLP OMA

Source: Annual Population Survey

This demonstrates that not only is the SLP workforce dominated by two particular sectors, but that the area has a preponderance of residents that are employed within the three most senior occupational levels. Only within the OMA is the percentage employed within one of the most senior occupations (managers and senior officials) higher than in the SLP area. Not surprising given the commuting patterns from this area into London and into the county towns from within their own regions.

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But it is also clear from Figure 5.8 that in comparison to the outer lying areas the SLP area has less of its workforce within the skilled trades and elementary occupations. This is also reinforced by the commuting patterns into the sub region to fulfil these occupations.

This pattern is also highlighted by the occupational structure of the SLP area compared to the other London sub regions. As shown in Figure 5.9.

Figure 5.9

30 % of Working Residents by Occupation % all in employment who are - 1: managers and senior officials London Sub Regions 2009 25 % all in employment who are - 2: professional occupations

% all in employment who are - 3: 20 associate prof & tech occupations

% all in employment who are - 4: administrative and secretarial 15 occupations % all in employment who are - 5: skilled trades occupations

10 % all in employment who are - 6: personal service occupations

% all in employment who are - 7: 5 sales and customer service occupations % all in employment who are - 8: process, plant and machine 0 operatives % all in employment who are - 9: SLP Central East London North West London elementary occupations London London

Source: Annual Population Survey

It is apparent from this distribution of occupational types across London that the Centre and the SLP area service not just the financial and business sectors, but also the senior positions within these sectors. Whilst the occupational structures of the other sub regions are far more evenly dispersed across the various categories.

This is potentially another vulnerable aspect for the sub region, not just due to the life style implications of these occupations but, because of the actual imbalance in the occupational structure of the area, causing a polarisation of the occupations and associated residential patterns. This has further implications for the need of these senior positions to constantly maintain a certain income, which can only be achieved (at present) through travel and a need to draw into the area other occupations to service the lower income sectors within its economy.

Ultimately, this pattern of development, which as Figure 5.10 explores for the sub region over the last five years, demonstrates an ongoing polarisation of the residential workforce

60 within the area, which if left unchecked will continue to destabilise not just its functioning economy but also its social capital. The basic fundamentals of a sustainable community, including the social relations that support and deliver economic activity, require a mixed and diverse set of people and activities. This is something that is essentially being eroded within the sub region, as the unsustainable short term requirements of the existing patterns of development are being given priority.

Figure 5.10

25.0 % Residents in SLP area by Occupation 2005 to 2009 % all in employment who are - 1: managers and senior officials

% all in employment who are - 20.0 2: professional occupations

% all in employment who are - 3: associate prof & tech occupations 15.0 % all in employment who are - 4: administrative and secretarial occupations % all in employment who are - 5: skilled trades occupations 10.0 % all in employment who are - 6: personal service occupations

% all in employment who are - 5.0 7: sales and customer service occupations % all in employment who are - 8: process, plant and machine operatives 0.0 % all in employment who are - 9: elementary occupations 2005 2006 2007 2008 2009

Source: Annual Population Survey

This polarisation of the workforce is not only reflected in terms of the position people occupy but also by the level of education attained. Figure 5.11 shows the manner in which this is represented in the SLP area set against surrounding and adjoining areas, including the other London sub regions.

5.6/ Qualifications and Pay Set within this context and considering the size of the sub region in terms of the workforce, it is obvious that, in relative terms, the area exhibits quite a dramatic polarisation of working age people based on their qualifications. Only central London displays a more skewed percentage of its workforce within the higher qualification category.

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This further confirms the distinct nature of the sub region with regards its residential workforce set against its surrounding sub regions and regions. It emphasises the particularly highly skilled/qualified nature of these communities and the potential they offer for developing local economies and businesses within the sub region, rather than servicing development elsewhere within the Capital or even within the rest of the South East region.

Figure 5.11

45 % of Residents by Qualification Categories 2006 40

35 % with degree or equivalent and above 30 % with higher education below degree level 25 % with GCE A level or equivalent 20 % with GCSE grades A-C or 15 equivalent % with other qualifications 10 % with no qualifications 5

0 London South SLP Central :East North OMA West East London London London London

Source: Annual Population Survey

The level of qualifications and senior positions found within the SLP area are also reflected in the gross pay scales.

Figure 5.12

62

Median Gross Weekly Pay 2009 700.0 633.6 623.4 598.6 600.0 520.0 536.6 500.0

400.0

300.0

200.0

100.0

0.0 SLP Kent Surrey London South East

Source: Annual Survey of Hours and Earnings

Figure 5.12 compares the median gross weekly pay within the SLP area to its surrounding areas and shows that on average the workers within the south London sub region command a higher wage than those of their neighbours. Surrey is the closest area comparator, where significant median wages are also recorded.

This is to be expected as the social environment and quality of life within the two areas is comparable for a range of communities, but at the same time it obviously masks the wide variations at the local level and the inherent polarisation brought about by this high level of income.

5.7/ Benefit Claims Figure 5.13

63

6.0 JSA Claimant Count Rate

5.0

4.0 London South East SLP 3.0 Central London East London North London 2.0 OMA West London

1.0

0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Claimant Count DWP/ONS

The JSA Claimant rate reveals the rate of change within the SLP area has followed a similar pattern to that of its surrounding areas and in terms of direct comparison it has almost been identical to that for West London over the last 10 years. However, it is also worth noting that under the current down turn the rates within the OMA and South East have almost become the same.

Figure 5.14

64

1.8 JSA Claimant Rates for those Claiming 1.6 Over 12 Months

1.4

1.2 London South East 1.0 SLP Central London 0.8 East London North London 0.6 OMA West London 0.4

0.2

0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Claimant Count DWP/ONS

For the long term claimants (those over 12 months – Figure 5.14) there was not such a dramatic fall in the SLP area as there was in other locations during the boom period leading up to the economic downturn, which means that the upturn in the rate (which has occurred in the SLP area equal to other locations) has brought the SLP long term claimant profile closer to those of other areas. In fact the overall trend for the decade for long term unemployment has resulted in a significant drop for most areas apart from West London, SLP, OMA and the South East.

Table 5.2

% Change in Claimant Count by Occupation 2005-2010

Sought Occupation 2005 2010 change %cha

0 : Occupation unknown 45 330 280 613.0 1 : Managers and Senior Officials 1,925 2,350 425 22.0 2 : Professional Occupations 1,305 1,560 255 19.6 3 : Associate Professional and Technical 2,555 3,395 835 32.7 Occupations 4 : Administrative and Secretarial Occupations 3,265 4,780 1,510 46.3 5 : Skilled Trades Occupations 2,890 3,400 510 17.6 6 : Personal Service Occupations 1,105 1,790 685 62.1 7 : Sales and Customer Service occupations 3,410 6,930 3,520 103.1 8 : Process, Plant and Machine Operatives 1,375 2,070 695 50.8

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9 : Elementary Occupations 4,865 6,095 1,230 25.3 Column Total 22,745 32,695 9,950 43.7

Usual Occupation 2005 2010 change %cha

0 : Occupation unknown 45 330 285 617.4 1 : Managers and Senior Officials 1,930 2,350 420 21.6 2 : Professional Occupations 1,215 1,575 360 29.4 3 : Associate Professional and Technical 2,445 3,405 955 39.1 Occupations 4 : Administrative and Secretarial Occupations 3,240 4,610 1,370 42.3 5 : Skilled Trades Occupations 2,725 3,445 720 26.4 6 : Personal Service Occupations 1,030 1,770 740 71.6 7 : Sales and Customer Service occupations 3,605 7,080 3,475 96.4 8 : Process, Plant and Machine Operatives 1,315 2,080 765 58.1 9 : Elementary Occupations 5,185 6,050 865 16.6 Column Total 22,745 32,695 9,950 43.7

Source: Claimant Count DWP/ONS

Table 5.2 indicates the types of occupations most affected by unemployment (JSA Claimants) during the economic downturn. This is split into the types of occupation sought and the usual occupation of the claimant. Although it must be noted that this is not a direct measure of unemployment and for many in the professional and senior managerial positions, because they choose not to (or can not) claim JSA, it does not present an accurate picture of their position.

The statistics reveal that the immediate impact of the down turn has had a significant impact across all areas, with a minimum of a 20% rise in all claimants irrespective of occupation. As expected, due to the caveats of the information the professional and senior managerial occupations saw the least rise (although this was 20-30%) where as the greatest increase (where the data is likely to be more accurate) was within the main residential employment sectors for the SLP area: personal service, and sales and customer service occupations.

Once again, this is the type of impact within the area which will serve to increase the polarisation of those in work or seeking work, who are professionally and spatially more mobile and those who are not.

In terms of the different types of benefits claimed within the area in comparison to other locations (Figure 5.15), the SLP area tends to reflect the trend within the South East and the OMA far more than London and its sub regions. However, in comparison to these areas within the wider region, the SLP area does exhibit an obviously higher rate of income support/pension credit, which distinguishes it from these areas and bring it more into line with West London.

Figure 5.15

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6.0 Rate of and Type of Benefit Claimants 2009 carers allowance (CA) only SLP and Surrounding Areas disability living allowance (DLA) only 5.0 incapacity benefit (IB) or ESA only

income support (IS)/pension credit 4.0 (PC) only job seekers allowance (JSA) only

severe disablemanet allowance (SDA) 3.0 only DLA and SDA

IB/ESA and DLA 2.0

IS/PC and CA

IS/PC and IB/SDA 1.0

IS/PC, DLA and SDA

0.0 IS/PC, IB and DLA London South SLP Central East North OMA West East London London London London other combinations

Source: DWP Work and Pensions Longitudinal Study

In terms of the trends for specific benefits within the SLP area over the past 10 years (Figure 5.16), it is interesting to note that the claimant rate for the main benefits (income support/pension credit/incapacity benefit) have all declined during this period (even taking 2002 as a start point when benefits were reassessed), whereas careers allowance and disability living allowance have increased. It is anticipated that due to the demographic nature of the SLP area and structural ageing within the population, that this will continue to increase.

It is also very apparent the impact the recent down turn has had on JSA claimants within the SLP area since 2007, which has seen a dramatic increase after only a marginal fall during the preceding boom period. This is a reflection of the area operating at its full potential with regard to economic activity and the hard to reach groups being entrenched within the worklessness profile.

Figure 5.16

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3.5 carers allowance (CA) only Benefit Claimants by Type 3.0 disability living allowance SLP 1999- 2009 (DLA) only incapacity benefit (IB) or ESA only 2.5 income support (IS)/pension credit (PC) only job seekers allowance (JSA) 2.0 only severe disablemanet allowance (SDA) only DLA and SDA 1.5 IB/ESA and DLA

1.0 IS/PC and CA

IS/PC and IB/SDA 0.5 IS/PC, DLA and SDA

IS/PC, IB and DLA 0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 other combinations

Source: DWP Work and Pensions Longitudinal Study

5.8/ Job Density and Vacancies Figure 5.17 shows the density of jobs within the SLP area and its surrounding areas, that is the number of jobs per resident of working age, and as can be seen the SLP density is relatively low compared to most of the other locations, apart from East and North London. Considering the high economic activity rate in the area, this low figure is a factor of the broader demographic within the SLP area, with a higher representation from those not of working age. The number of young, due to a significant family composition and the number over the working age, as the area also has a relatively high percentage of people over 65.

Figure 5.17

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Jobs density 2009 2.50

2.00

1.50

1.00

0.50

0.00 London South East SLP Central East London North OMA West London London London

Source: ONS Employee Jobs Estimates

In terms of the excess demand within the economy for certain occupations, Figure 5.18 shows that the SLP area does differ from its surrounding and adjoining areas, particularly in terms of the relatively low need for associate professional and technical operations, which is a significant demand in other sub regions and areas.

In addition, there is also a high demand for personal service occupations within the area in comparison to other occupations, these cover Healthcare And Related Personal Services, Childcare And Related Personal Services, Animal Care Services, Leisure And Travel Service Occupations, Hairdressers And Related Occupations, Housekeeping Occupations, Personal Services Occupations.

And within the area there also appears to be less of a need for elementary occupations, in comparison to other locations: Elementary Agricultural Occupations, Elementary Construction Occupations, Elementary Process Plant Occupations, Elementary Goods Storage Occupations, Elementary Administration Occupations, Elementary Personal Services Occupations, Elementary Cleaning Occupations, Elementary Security Occupations, Elementary Sales Occupations.

Figure 5.18

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30.0 Vacancies Notified by Occupation May 2010 1 : Managers and Senior Officials

25.0 2 : Professional Occupations

3 : Associate 20.0 Professional and Technical Occupations 4 : Administrative and Secretarial 15.0 Occupations 5 : Skilled Trades Occupations

10.0 6 : Personal Service Occupations

7 : Sales and 5.0 Customer Service occupations 8 : Process, Plant and Machine Operatives 0.0 9 : Elementary London South SLP Central East North OMA West Occupations East London London London London

Source: DWP

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6/ Tourism and Visitors

The contribution of most economic sector to the SLP sub region has been recorded in detail in most of the previous documents produced for the area and in the previous sections of this assessment, however, since the SLP came into being a truly regional picture of the impact and potential of this particular sector (tourism and leisure) has not been undertaken. In addition to this, it is also recognised that this sector, potentially more than most, has the future capacity for job growth, a diversity of employment potential and a level of employment potential that could offset declining labour markets where the sub region is most vulnerable.

6.1/ LDA Figures and Models The LDA has produced a Tourism Impact Model that attempts to allocate the value and weight of this sector to each borough.

“Because tourists use such a wide variety of products and services during their stay (including accommodation, food and drink, taxis and transport, theatres and museums) it has always been difficult to determine the value of tourism accurately, and particularly at the sub- regional and borough level.

The London Development Agency's (LDA) Local Area Tourism Impact (LATI) model takes London-level data from the major national surveys (International Passenger Survey, UK Tourism Survey) and new data on day visitors from an omnibus survey, and distributes it across the boroughs.

The results provide borough-level estimates of tourism volume and value to inform tourism policy development, investment and marketing.” (LDA – LATI 2010).

The modelling represents figures for each borough which are described as experimental statistics and do not include business travellers. In addition, tourism spending does not include any share of overseas fares to UK carriers for London or imputed rent which together amount to an estimated £1.1 billion.

Table 6.1 shows the result of this modelling for all boroughs in London ranked by „Total Spending‟ for 2007. These are the latest disaggregated and consistent figures across all London boroughs.

Table 6.1

All London Borough Visitor Numbers and Spend 2007 (LATI Figures)

All numbers are in Day Day Visit Overseas Domestic Total Overseas Domestic Total thousands Visitors Spending Over Over Over Spending Spending Spending night night night Overnight Overnight Visits Visits Visits Visits Visits Greater London 181000 12184000 15300 10100 25500 8192000 2204000 22580000 Westminster 46600 3135000 5500 3500 9000 2927000 762000 6824000 Kensington and Chelsea 12900 866000 1800 1100 2900 986000 240000 2092000 Camden 11600 782000 1100 700 1800 589000 162000 1533000 Hammersmith and 6900 465000 300 300 600 183000 62000 710000

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Fulham Southwark 7300 490000 300 300 600 162000 55000 707000 Hillingdon 4300 291000 600 400 1000 326000 80000 697000 City of London 5600 378000 400 300 700 240000 64000 682000 Barnet 6700 451000 300 200 500 162000 37000 650000 Lambeth 6400 432000 300 300 600 148000 65000 645000 Tower Hamlets 5800 392000 300 300 700 176000 76000 644000 Ealing 5800 392000 400 200 600 191000 42000 625000 Croydon 5100 343000 300 200 500 162000 42000 547000 Islington 3900 256000 300 200 500 144000 45000 445000 Bromley 3978 267794 243 143 386 129591 31077 428462 Wandsworth 4185 281668 216 128 344 115260 27753 424681 Enfield 2850 191828 253 175 428 135020 38120 364968 Kingston upon Thames 3335 224487 208 114 322 110968 24849 360305 Havering 3041 204712 226 151 377 120530 32926 358168 Hounslow 3245 218403 208 111 319 111329 24129 353861 Newham 2286 153887 249 214 462 132772 46481 333140 Merton 3650 245687 128 79 207 68335 17270 331292 Brent 2711 182482 182 114 296 96975 24784 304241 Greenwich 2999 201850 145 96 242 77546 20939 300335 Richmond upon Thames 2609 175628 167 124 291 89109 26899 291636 Bexley 2237 150545 151 102 254 80822 22223 253590 Haringey 2345 157853 140 82 221 74649 17756 250258 Redbridge 2183 146951 153 93 246 81956 20156 249063 Harrow 1993 134135 171 97 267 91218 21003 246356 Waltham Forest 2017 135779 110 68 178 58504 14799 209082 Hackney 1864 125448 121 81 202 64761 17583 207792 Sutton 1904 128153 115 70 185 61409 15160 204722 Lewisham 1701 114497 115 77 192 61272 16842 192611 Barking and Dagenham 1029 69233 66 45 111 35208 9861 114302

Source: LDA – LATI 2010

As can be seen from Table 6.1, of the boroughs within South London, Croydon ranks the highest in terms of visitor numbers and spending during this period and Richmond and Sutton rank the lowest.

The problem here is not just the methodology, which can be seen at: http://www.lda.gov.uk/publications-and-media/publications/lati.aspx it is also the manner in which the data is represented and the actual visitor numbers for major attractions within the South London area that this data does not equate to.

By representing the data in such a disjointed, borough by borough, manner it does not take account of the potential flows and links between them or in fact the links within the wider City Region that flows out to the rest of the South East. Therefore it does not provide a useful strategic overview of the actual tourism patterns within the City Region and merely reiterates the fact the most people visit Westminster Abbey.

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6.2/ A Strategic Regional View of the Tourism and Leisure Industry If a more strategic overview were to be presented as in Figure 6.1 it would clearly demonstrate, for example, that within the South West quadrant of the City Region there are three of Europe‟s biggest theme parks, run by the world‟s second largest entertainment company (behind Disney) with a combined annual attendance of close to 4.5 million.

And as the actual figures for the South City Region also show (Table 6.2) for the attractions that are physically located within some of the South London boroughs, the visitor numbers have been underestimated, particularly in the case of Richmond.

Table 6.2 Top Tourist Attractions in the South London City Region 2007 Annual Attraction Numbers London Eye 3250000 Legoland 1900000 Thorpe Park 1800000 Kew Gardens 1354928 Chessington World of Adveture 1300000 Windsor Castle 1100000 South Bank Centre 1000000 Hampton Court 473013 Brooklands Museum and Mercedes Benz World 318000 County Hall 300000 Wetland Centre 223000 Battersea Dogs Home 105000 Hayward Gallery 100000 Battersea Park Children's Zoo 95711 Ham House 72254 Wimbledon Lawn Tennis Museum 54590 BFI Southbank 50000 Chislehurst Caves 42475 National Archives Museum 39532 Museum of Rugby 32000 Wandsworth Museum 27484 Down House 27348 Florance Nightingale Museum 26464 Pump House Gallery 21000 Vauxhall City Farm 15000 Marble Hill House 5230 Royal British Legion Poppy Factory 4796 Museum of Garden History 3000 Strawberry Hill Walpole House 2000 Lambeth Palace Library 2000 London Sewing Machine Museum 1700 Royal Military School of Music 1250 Total 13747775

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Major Parks Richmond Park 3500000 Bushy Park 1000000 Battersea Park 1500000 Total 6000000

Total 19747775

Source: Visit England (2006-2007)

But these are minor points considering the total numbers of visitors that are actually coming into this Southern part of the City region, and particularly the South West quadrant of this area. It must also be noted this does not include business tourism, event tourism (Twickenham, Wimbledon, Sandown, Kempton, Epsom, Ascot, Boat Race) and general leisure activities/visits to the River Thames, smaller parks/open spaces and smaller attractions (which are listed in Table 6.3).

Table 6.3

Smaller Attractions within the South London City Region

Bocketts Farm Park Carew Manor Beddington Carshalton House, Water Tower and Historic Gardens Clapham Art Gallery Crofton Roman Villa Croydon Airport Visitors Centre Croydon Museum Crystal Palace Museum Crystal Palace Park Farm Deen City Farm and Riding School Fairfields Hall Honeywood Heritage Centre , Carshalton Horniman Museum and Gardens Jurassic Encounter Adventure Golf Kingston upon Thames Museum and Heritage Service Kneller Hall Little Holland House , Carshalton Morden Hall Park Museum of Richmond Puppet Theatre Barge Soseki Museum in London Southside House The Couper Collection Wandle Industrial Museum Wimbledon Museum of Local History

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Wimbledon Windmill Museum

Source: Visit England and Primary Survey

The South London and the London Strategic Tourism plans do not make this larger connection or observation and as a result these numbers and visits tend to be managed in a disjointed and isolated way. Ignoring the possibility for linking these attractions and events within the City Region and strategically offering packages, support and marketing that would and could exploit these opportunities to their full potential: feeding into the rest of the tourism and leisure related economy, particularly cultural events, food and drink, accommodation, sporting activities and events, transport and retail.

This is especially highlighted by the extremely poor cross boundary public sector transport links (Kingston Core Strategy) that limit mass transit options beyond the GLA boundary.

This is a particularly important point as this sector and its related sectors offer a wide range of employment opportunities to those with a variety of experiences and skills and do not simply rely upon highly qualified/high income labour, which is an essential ingredient within a sub regional economy that needs to tackle pockets of worklessnesss as well as offering more localised opportunities for high earners that might want to stay and maintain their existing lifestyle within the City Region.

Figure 6.1 clearly shows the density, range and significance of this sector for the SW quadrant of the City Region in terms of attractions from across the spectrum.

Figure 6.1

All Tourist Attractions Across the SW Quadrant of the London City Region

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Source: CERI, Kingston University

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7/ Business Issues in South London This section, produced by South London Business, covers the critical issues business face in the sub region and outlines the state of the economy and its potential from the point of view of its private sector members. It is a mixture of both quantitative and qualitative data and represents the most current picture available on demand and supply issues within the sub region.

7.1/ Investment levels – business retention Information on business retention in the sub-region is provided below using data from the investor development programme (formerly known as business retention) run by South London Business from 2007 to 2010. As can be seen in the tables 7.1 to 7.4 below, Richmond (14 projects, 41% of businesses successfully supported), Croydon (9, 26%) and Lambeth (4, 12%) based companies required the most support over the period 2007 to 2010 (34 projects over the timeframe, see Appendix ? for more detail). The sectors which received most support were hospitality (8 projects, 24% of businesses successfully supported), followed by retail (4, 12%) and creative (4, 12%).

In terms of jobs created versus safeguarded there were more jobs safeguarded over the three year period – at 1930 jobs in 23 projects, than projects involving new jobs created at 592 new jobs in 18 projects. The boroughs of Croydon (354), Richmond (83) and Wandsworth (73) were the greatest recipients of jobs created, whilst jobs safeguarded were highest in Croydon (1630), Bromley (120), and Richmond based companies. Sectors creating the most jobs were: retail (295), hospitality (126) and leisure (70), whilst sectors most in need of jobs being safeguarded were finance (1200), services (400) and hospitality (109). This data provides a useful indication of the sectors both growing and those sectors in need of support during these difficult economic times. We need to bear in mind however that there are organisations out there it is not always possible to reach in time before the company goes under or they choose not to accept our support. So this information needs to be considered in line with other information sources on the state of sectors within south London.

Table 7.1

Investor development (business retention) successes 2007 Borough Nos Sector Nos Croydon 3 Training 1 Richmond 1 Banking 1 Bromley 1 Leisure 1 Finance 1 Aviation 1 5 5 Source: South London Business investor development programme, 136 jobs created, 1300 jobs safeguarded

Table 7.1

Investor development (business retention) successes 2008 Borough Nos Sector Nos Croydon 2 Services 1

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Lambeth 1 Retail 1 Hospitality 1 3 3 Source: South London Business investor development programme, 265 jobs created, 415 jobs safeguarded

Table 7.3

Investor development (business retention) successes 2009 Borough Nos Sector Nos Lambeth 2 Creative 4 Richmond 13 Hospitality 6 Bromley 1 Sports 1 Sutton 1 Environment 1 Croydon 3 Training 2 Lewisham 1 ICT 2 Wandsworth 1 Services 1 London 1 Retail 2 Architects 1 Education 2 Publishing 1 23 23 Source: South London Business investor development programme, 81 jobs created, 215 jobs safeguarded

Table 7.4

Investor development (business retention) successes 2010 Borough Nos Sector Nos Lambeth 1 Property 1 Wandsworth 1 Hospitality 1 Croydon 1 Retail 1 3 3 Source: South London Business investor development programme, 110 jobs created

7.2/ Investment levels – Inward Investment Information on inward investment levels from 2007 until 2010 for south London is provided below using Think London data and UK Trade & Investment data (note: financial year 2009/10 data yet to approved so not admissible).

Over the past three years, inward investment (international companies supported by Think London to set up a new base) into South London increased dramatically in terms of jobs during 2008 (497) and 2009 (166) compared with 2007 (129), whilst the number of actual companies supported did not change so dramatically (see Appendix 4). Although the majority of businesses supported tend to be smaller investments, there has been a slight change over the period with an increase in the number of larger initial investments (by jobs)

78 in south London. In terms of locations it can be seen that Richmond with nearly double that of other recipients (15 companies, 32% of successes), followed by joint second Croydon and Wandsworth (8 companies each, 17% each) were the most popular boroughs for receiving inward investment from 2007 to 2010 (47 company successes). Of the 47 successes, the strongest sectors during that period for inward investment were ICT (17 companies, 36% of successes), followed by retail (7 companies, 15%), and leisure & entertainment (5 companies, 11%), with the remainder of the successes evenly distributed amongst other sectors. Countries investing in south London predominately came from the USA (14 companies, 30% of successes), followed by Australia (7 companies, 15%) and Korea (6 companies, 13%). This ratio of country successes could be attributed in part to the clusters of these communities in the south London area.

Sutton borough did not receive any inward investment during 2007 to 2010 through the Think London programme, this area has experienced some difficulties in raising its profile & attracting businesses in the past compared with surrounding boroughs. It is worth also noting the increase in activity in Wandsworth which could be attributed to the fact that in 2008 and 2009 Wandsworth council arranged a number of events aimed at raising the areas profile, and recently announced that (2008) the US Embassy and (2009) H&B Foods Ltd are relocating to the Nine Elms area, which are in addition to Think London successes. (See Appendix 4 for more details).

Pan-London data on inward investment sourced from UK Trade & Investment for the past three years (2007-2009 see Appendix 4 for more details), shows that the south London country of origin investor trends are broadly in line with pan-London with United States & Australia being the top investors, with the exception of India showing a stronger focus pan- London (9% of successes) and Korea a stronger focus in south London (13%).

Table 7.5

UK Trade & Investment data for London - new investment, mergers, aquisitions and expansions (Jan 2007 - Mar 2009). Country No of (top ten) companies United States 392 37% India 92 9% Australia 65 6% Canada 57 Japan 50 Italy 48 France 47 China 31 South Korea 27 3% Germany 24 Total of all projects 1060

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Source: UK Trade & Investment, This data includes both involved and non-involved completions by regional agencies.

The principal sectors new investor companies, over the past three years, are involved in pan-London compared with those investments in south London vary quite significantly with the exception of ICT which remains the top sector for investors into London & South London (see table 7.6). There the paths diverge with pan-London‟s top source of investment coming from the fields of business & consumer services (16% of successes), followed by creative & media (9%), whilst the retail, and leisure & entertainment sectors, which feature heavily in south London, are not in the pan-London top ten.

Table 7.6

UK Trade & Investment data for London - new investment, mergers, aquisitions and expansions (Jan 2007 - Mar 2009). No of Sector (top ten) companies Software and Computer Services Business to Business (B2B) 240 23% Business (and Consumer) Services 167 16% Creative and Media 95 9% Financial Services (including Professional Services) 77 Financial Services 75 Communications 48 Electronics and IT Hardware 39 Food and Drink 37 Clothing, Footwear and Fashion 30 Healthcare and Medical 30 Total of all projects 1060 Source: UK Trade & Investment, This data includes both involved and non-involved completions by regional agencies.

7.3/ Export Patterns Using data from South London Business‟ annual survey and anecdotal evidence from partner organisations we are able to provide some information on south London companies‟ export experience.

Exporting would seem to play a role, with 30% of firms intending to export. Europe remains the biggest anticipated growth area. In a recession this is not an easy objective to achieve. If, or when the economy starts to improve, delayed investment decisions will have an impact and bank finance may be sought to realise the growth strategies. The longer the recession continues, the harder it may become for firms to find the skilled staff necessary to implement their growth strategies as these are the very staff they may well have been forced to make redundant in order to reduce wage costs. Furthermore, the role of the banks in funding investment will be critical. While for many firms survival is „the only game in town‟ at present, senior managerial resources will need to be diverted to planning and preparing the business for future growth. For many firms this is a luxury they cannot at present afford.

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The main export markets are Europe, followed by North America and then Asia. Of note is that 30% of the firms do intend to export and the biggest growth area appears to be Europe.

However, it is worth noting there are some success stories:

Bryan Treherne and Neil McAllister have been running training workshops for start up/small established businesses to trade internationally. They also organise Trade Visits overseas. There are plenty of people researching whether to trade internationally. This is generally due to redundancies/retirements and is more biased to ethnic groups not only in Croydon but across South London. However there is a wide range of products and services available and most want to trade with their indigenous countries. They recently took a party of twelve businesses on an Export Drive to Ghana. They were well received and there is huge demand for British products and services in emerging countries. In fact one Croydon Business has returned to follow up securing a potential order worth £1m+.

Source: Neil Mcallister, International Trade Training Services

Over the last 15 years the South London Export Club has seen an increase in the number of South London companies exporting and an increase in volume of the companies already exporting. It has been noticeable that many companies have started exporting because of the lack of business opportunities in the UK. They work with Mott McDonald who export their services to many different countries who continually find new markets in order to use their skills and knowledge to help infrastructure in many developing countries. SLE from South Croydon export over 70 % of their manufacturing to countries which include Russia and in fact now have a factory in Russia manufacturing some of their products. Martek from New Addington who refurbish cinemas etc, have done well in Europe because of the low value of the Euro. Centronics again from New Addington are actively selling their detection equipment worldwide despite USA competition.

Because of the advent of more global players many of our South London Exporters compete with them at overseas exhibitions e.g. Medica in Duesseldorf in order to be in the forefront of technology. One of the problems South London has is the lack of skills required to construct these products and local colleges are not helping by not supplying suitable training courses in these topics. Over the last year the South London Export Club has seen many new companies come along to training courses on basic exporting trying to take products into overseas markets quickly. The South London Export Club expects that exports will continue to help South London businesses stay “alive” during this difficult time.

Source: Bryan Treherne, UK Trade & Investment and South London Export Club.

7.4/ Enterprise & innovation KNOWLEDGE CONNECT is a practical programme that's helping London's businesses succeed by introducing fresh ideas, new knowledge and practical skills to help them realise their goals and ambitions.

This funded programme gives access to a variety of support including one-to-one contact with experienced mentors who understand issues relating to business, and access to

81 bespoke specialist support through connection with London's world-class knowledgebase of universities, colleges and research organisations.

Feedback gained from a key mentor at Knowledge Connect: Generally a lot of businesses (on the programme as a whole) do not have basic elements in place such as a business plan, and often are very caught up in the day to day work to the detriment of making longer- term, strategic decisions. Working on projects with an academic partner often leads to further projects and ideas developing, as they realise the benefit of working on more strategic changes such as new products/services, new markets, new processes, etc. On the Knowledge Connect workshops programme the most popular events are items such as learning to present themselves and the business (which they do with the Central School for Speech and Drama and the Royal Academy of Dramatic Arts), writing business plans and product pricing/development, as well as more sector-specific events. Companies often overcome their initial reticence once they have experienced a successful project, which is why the Knowledge Connect programme has been positive in „hand-holding‟ that first experience so that companies enjoy and understand the value of working with academics. They then often go on to fund their own projects and do further work. It also gives them more confidence when they approach new markets/customers as they can speak with authority about projects undertaken/changes they have made.

Source: Melissa Addey, Knowledge Connect

7.5/ Business constraints to business investment & economic growth A total of 10,000 surveys were distributed to businesses across South London (Croydon, Bromley, Richmond, Kingston, Merton, Sutton, Southwark, Lambeth, Greenwich, Bexley, Lewisham and Wandsworth) via online and postal campaigns, business advisers and business events in June and July 2009. The surveys were sent to top companies ranked by turnover and number of employees as well as a representative sample of small and medium sized businesses in the region. A total of 370 completed surveys were returned – a response rate of 4%. 25% of the responses were located in Croydon, 22% in Bromley, 8% each in Kingston and Richmond, whilst Merton, Lambeth, and Greenwich all attained around 5% of completed surveys each. Although businesses were targeted evenly across south London, it is interesting to note the strong response from businesses based in two of the boroughs – Croydon and Bromley. The precise reason for this is unknown, but may be attributable to stronger business engagement or more vocal businesses in those locations.

Location: Costs are a problem both in terms of premises and rates. Business rates have become highly topical this year – the reduction of business rate relief on empty commercial properties in April 2008, and the Chancellor increasing the business rate multiplier by 5% in April 2009 have all affected business‟ bottom line. This will not be aided by the impending 2010 rating revaluation and the additional 2p levy on the business rate (per pound of rateable value) on non domestic properties in the capital with a rateable value of £50,000 or more to fund Crossrail. In addition, poor transport links, the local environment and crime are issues. It is conceivable that if the local environment deteriorated markedly the pull of being near customers would start to be eroded and firms would look for other more pleasant locations.

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The top issues that respondents felt need to be addressed were:

 rising business rates  cost of premises  transport links  local environment  crime

Given that many respondents reported that the quality of life afforded by the area was an important pull factor, deterioration in the local environment could lead to firms re-locating outside of the area. In addition, improvements in the availability of business support, help in raising finance and access to markets could help a sizeable percentage of local firms.

Areas of concern for business were predominately around:

 Property – lack of suitable / struggling to find: particular issue in Croydon, Richmond and Sutton.  Planning - throughout South London, slow development of sites in Croydon – Canehill / Ruskin Square.  Poor transport links – seemed to be more of an issue for Bromley and Kingston companies  Skills – engineering & aerospace in Bromley, technical, ESOL, young people, construction, chefs, ITC.  Staff redundancies  Recruiting and retaining staff – competing with central London for staff  Congestion – spread throughout South London  Car parking – more prevalent in Bromley  High housing costs for staff – Richmond  Environmental support  Lambeth no local chamber – not prevalent enough.  Business support confusing in Croydon  Low emission zone  Safety & crime (inc flytipping) – Croydon, Hackbridge and Lewisham  Residents – unhappy about industrial sites in residential areas.  Environment  Public sector procurement  New business – networking: requested particularly in Richmond and Croydon  Apprenticeships  Training – management skills in the areas of customer service, supervisory, e- commerce, marketing, communication, and some specific courses related to food & drink sector.  Funding – particularly requested in Richmond and Croydon.

7.6/ Assets of the sub-region

The first thing to note is the high level of satisfaction firms continue to have with the location at 75%. The main reason businesses choose to be in South London is because South

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London is where their customers live and work. Also important is the quality of life offered by the location.

The main reason firms were located in South London was because of access to markets/clients, followed by a range of “other” reasons (mostly divided between historical reasons or senior staff living in the area), and then quality of life.

Figure 7.1

Reasons for Locating in South London

Source: SLB

Businesses in Bromley and Croydon were more likely to mention business support infrastructure in the region as an asset, Kingston and Croydon cost of commercial premises, and quality of life in Richmond. As the high cost of commercial premises is cited as a current difficulty it is no surprise to find that only about 11% of firms reported that they were located in South London because of the quality or the cost of commercial premises. Also labour costs were hardly mentioned at all as an attractive feature of the area.

Other key issues raised by businesses were Biggin hill airport – good for attracting corporate to the area, Purley way good for industrial, transport in relation to central areas such as London Bridge, high skill base in Richmond & Croydon, economical offices, Kingston Business Improvement District and business base in Croydon and Kingston.

7.7/ Engagement with sub-regional partnerships and support Accountants, banks and solicitors were the most common sources of advice. Interestingly more informal sources were important – other business owners and friends or relatives. Other important sources of advice were obtained from trade or professional associations, Business Link and the Inland Revenue. Just over 10% reported using management consultants. Businesses were unaware of the savings they could potentially make in a

84 number of areas including production management, purchase management and sales management. Given the pressure that is on businesses at present exploiting sources of advice and help that they have not traditionally considered to weather the current financial climate such as management consultants and businesses specialising in business efficiencies may well be worth looking into. This said about 40% of the businesses indicated that they would be willing to attend free seminars run by Barclays and free support from Train to Gain. Against this relatively few reported interest in being contacted by the survey‟s sponsors for help.

Specific support mentioned included Soloman; Bromley college; Merton, Kingston, South- East London and Croydon chamber; South London Freight Quality Partnership; Business Focus, West Focus, local councils, Envibe, Job Centre, and the LDA.

The majority of businesses welcomed further introductions to chamber, local councils and other specialist support organisations such as Soloman. They were also keen on a number of the SLB skills programmes and networking opportunities in particular, as well as some of the cluster programmes such as Build South London.

7.8/ Sites and Property Table 7.7 lists the key development sites in South London that the business and policy community feel will bring significant capacity to the area and enhance its overall appeal for future inward investment.

Table 7.7

Key Development Sites

Borough Positive - growth Negative / no Comments development Bromley Two major Only just become development areas of available 26.6 acres in Beckenham and Bromley town centre. Huge potential if filled by employers, in terms of employment and impact on surrounding areas – demand for other services. Croydon Great potential for Some of these sites If these developments growth. Nine large have been discussed actually come to fruition sites highlighted for a very long time they will truly have a such as Cane Hill, Park huge impact in terms of Place and Ruskin employment, and Square (formerly the demands for other Gateway). services related to a Unfortunately because new business setting up some of these sites in the area – office have been the subject services, recruitment, of planning disputes, local amenities etc... the areas around these developments have declined e.g. Dingwall

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road, St George‟s Walk and some businesses have left the area as a result of these delays – i.e. limited new office space and deteriorating environment. Kingston Three sites – offers Some of these sites, some good potential such as the Tolworth one have been in discussion for some time, and do have some limitations such as the A3 / A238 access and risk of congestion, and land- banking by Tesco‟s of one of the sites. Merton Five sites – some good Some of these sites potential large sites. have limited public transport access which may have caused difficulties as employment sites. Two of the sites are converting to predominately residential use. Richmond Six sites mentioned in The Core Strategy was local development adopted on 21 April framework 2009, following recommendation by Cabinet on 23 March 2009 and full Council on 21 April 2009. There is a new inward investment post who could leverage these sites when promoting the area as part of their new role. Sutton Two sites – smaller One of the sites is Appear to be a smaller sites than other veering towards number of opportunities boroughs but still predominately than other boroughs. potential. residential use.

Wandsworth Five big sites – lots of Some sites such as potential – some great Battersea Power success stories Station have been recently (see inward discussed for a long investment: H&B time – however with Foods, US Embassy) the development of the Nine Elms opportunity area and successes such as the US Embassy proposed move to the area – could act as a catalyst to finally get this scheme off the ground.

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Source: SLB

Demand for commercial property in South London has unsurprisingly seen a decline due to the economic downturn and its effect on existing and start-up businesses. The South London Business commercial property database caters to a client base of mainly small to medium sized businesses, existing or start ups, looking to locate in any of the nine South London boroughs it covers: Bromley, Croydon, Lambeth, Lewisham, Kingston-upon- Thames, Merton, Richmond-upon-Thames, Sutton and Wandsworth.

Comparatively the nine Boroughs have seen a steady decline over the past three years in demand and are yet to show signs of recovery to return back to levels last seen three years ago. In terms of supply of new premises during the same period (2007-2009) there has been a steady increase in vacant premises available in South London. However there have been fluctuations in the types and sizes of premises available in south London from 2007 to 2009 which is particularly noticeable amongst industrial & warehousing, mixed commercial, offices and retail use classes. Retail premises within South London showed some consistent improvement trends whilst divergent trends were evident in the other premises use classes.

Generally, the availability of new vacant properties available in South London has steadily increased since January 2007. In January 2007 95 new properties were supplied by agents to be marketed on the database, the lowest trough in the chart was in December 2007 where 44 new properties were supplied. New property uploads peaked at 353 properties in April 2009. This increase in vacant properties indicates a correlation with the economic downturn. In general take up in South London has not matched supply of vacant space subsequently resulting in disequilibrium of supply and demand.

Figure 7.2

Supply of New Vacant Property Jan 2007 – March 2010

400 350 300 250 200 150 100 50

0

07 08 09

09 09 09 07 07 07 08 08 08

07 07 08 08 09 09

Number ofNew NumberVacant onPropertiesDatabase

- - -

------

------

Jul Jul

Jul SLB

Jan Jan Jan

Sep Sep Sep

Nov Nov Nov

Mar Mar Mar

May May May Month

Source: SLB

Collectively the South London Business property database data shows a decline in property downloads commencing in the summer of 2007 (the start of the downturn in commercial

87 property uptake) and reaching its lowest trough in October 2008/December 2008. However, the level of downloads seems to have reached an equilibrium of approximately 600 downloads a month despite an upsurge in the autumn of 2009; reaching 1000 downloads a month.

A total of 1429 downloads for properties were logged on the entire SLB database in January 2007 as opposed to 695 downloads in January 2010 a drop of 51%. The consistent trend overall has been a steady decline during the economic downturn.

Figure 7.3

Overall Demand of Property in South London

Area Hit Stats Nine South London Boroughs 1600 South 1400 London 1200 Business 1000 800 600 400 200 0

Source: SLB

The business base searching for commercial property through the property database is dominated by businesses in the wholesale and retail trade sector which represents 32% of businesses. This is followed by businesses that fall under the „Other community, social and personal activities‟ category at 15%. The third largest portion of enquiries is from businesses that fall under the education sector at 13%. Hotels & Restaurants also represent a relatively large share of businesses searching for premises at 11%.

Detailed demand and supply for individual boroughs is shown in Appendix 5.

Figure 7.4

Sectorial Demand for Premises

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Business Type

Construction 5%

Education Wholesale and 13% retail trade 32% Financial Intermediation 1%

Hotels & Restaurants 11%

Transport, storage and communication 4% Manufacturing 7%

Real estate, Other renting and community, business Public social and activities Administration personal service 8% and Defense activities 4% 15%

Source: SLB

In 2007, almost a quarter of the businesses that used the commercial property database were from outside of the South London area. This is good news for the region as it indicates that a quarter of all businesses looking at setting up in the sub-region are new to the sub region. Lewisham was a high second with 17%, followed by Merton, Lambeth, Croydon and Wandsworth who all represented 10% each of businesses using the property search facility. Richmond-upon-Thames was the least well represented; only representing 1% of companies using the database.

In 2008, levels are consistent to 2007 trends. „Other U.K.‟ has the largest amount of businesses using the database with 21% followed by Lewisham who have 19%. The number of businesses in Lambeth and Croydon using the database has gone up marginally; Lambeth by 2% and Croydon by 3%. Non U.K. companies looking at the database represented one percent of users, similar to 2007.

In 2009, the trends reflected a number of changes. The top three business origins for companies searching for premises were „Other U.K.‟ – 19%, Croydon – 18% and Lewisham

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18%. „Other U.K.‟ had a smaller lead on other business origins than in previous years with only 1% more than the rest.

There was hardly any change in the percentage share of existing businesses and start ups looking for premises: 62% were existing businesses and 38% were start up companies.

7.9/ Supply Chains One of the hardest areas to ascertain information upon is the supply chain network between businesses and clients in the sub region. The following information represents the best information available from South London Business and the London Annual Business Survey (last undertaken in 2007).

There are a number of key sectors in South London, many of which have key connections with other industries / businesses both in London and the South-East. A brief synopsis of some of the key sectors and their connections are highlighted below. This information is based on feedback from our business retention and inward investment activity, and has resulted in tailored programmes to support some supply chains such as the Build South London project, the South London Freight Quality Partnership, and Consolidation centre for construction sector.

Finance:

 Business services companies tend to be located around the boroughs of Wandsworth, Lambeth, Richmond, Croydon, Southwark and Bromley and some of the businesses operating in the area include: AIG, Mazars, Mondial, Pegasus Solutions (Utell) Capita, Pricewaterhouse Coopers, Ernst & Young, Iron Mountain, Norton Rose, Withers & Rogers, Churchill Insurance, Cosmos Holidays, Bank of America and Baker Tilley.  There are two small financial intermediation clusters in Southwark and Bromley. Private equity houses, trading platforms and specialist financial institutions favour London Bridge including Montagu Private Equity, Hgcapital, Ansbacher & Co Ltd, IgIndex and City Fund Management, whilst back office functions by Bank of America, Capita and Liberata are carried out in Bromley and Croydon, in addition to numerous small to medium sized enterprises involved in financial brokering, advice and services.  Many companies such as Abbey Life, Hill Samuel, American International Group and Aviva decentralised from central London to Croydon during the 90‟s to take advantage of a lower cost environment, whilst still being accessible to clients and have access to an excellent ICT and transport infrastructure.  Companies in the financial sector in South London can still enjoy the benefits of being in a lower cost environment, surrounded by some of the key players, and within easy reach of the city, and Gatwick Airport. This allows companies to be fully connected to the financial world, and both domestic and international markets. They tend to carry out back office functions, including disaster recovery in South London.  Note that the business branches in South London will be connected to head office businesses in central London and dependent on the sector growing in London.

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 Other connections: Because the financial & professional services sector is so prevalent in south London this leads on to demand for other services such as marketing, office services and local amenities, so any change in this sector will have a follow-on effect on other industries which service the financial sector.

Logistics:

Based on the GLA Economics Working Paper 37: London‟s logistics sector August 2009 and our own experience with businesses under the investor development (business retention and inward investment) programme we are aware of / have been involved in the following which emphasis the links between the transport / logistics sector and certain key sectors in south London such as retail and construction which create business for the transport sector.

South London Freight Quality Partnership:

 Role is to find constructive local solutions, which reconcile the need for access to goods and services with local environmental, social and safety concerns. They research, develop and implements actions aimed at increasing the operational efficiency of the freight transport industry, while reducing its impact on the local environment. They bring together stakeholders from local and regional government, the freight industry and other key organisations, all with an interest in sustainable freight transport.  The partnership is supporting all sectors with logistics needs but there is a strong emphasis on supporting the construction and retail sector.  Construction Logistics Plans are a key initiative identified within TfL‟s London Freight Plan. Due to significant developments proposed in the Croydon area, the SLFQP have initiated discussions with Croydon Council, logistics providers, some of the relevant developers and their lead contractors to establish how the effects of the construction phase of these developments can be best managed through best logistics practice. SLFQP have also recently opened discussions with several of our member Boroughs regarding broader application of Construction Logistics Plans in the context of the development of the Town Centre Area Action Plans that have been developed in several cases.  A study (June 2008) was carried out in the use of consolidation centres for the retail and construction sectors which would play a key role in improving freight efficiency, environmental and economical performance in South London. The study suggested that suitably located consolidation centres, where smaller part loads are grouped together onto a single vehicle for the final delivery leg, could help alleviate congestion and the environment and improve efficiency of the local economy and directly supporting the retail sector.  In South Bermondsey has been funded by Transport for London (£1.85m), Stanhope and Bovis Lend Lease (£1.35m) and managed by Wilson James. A winner of the European Supply Chain Excellence Awards 2006, the LCCC is making significant improvements to the construction industry's material delivery effectiveness, reducing CO2 emissions by 75%, increasing productivity by 47%, and for right materials, right place, right time there is a 70% improvement on industry norms.

Retail:

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 Wholesale and retail sectors are strongest in Croydon, Wandsworth, Bromley, Southwark, Richmond and Kingston.  See above mentioned logistics sector and Freight consolidation centre for retail – heavily dependent on retail sector business booming.

Construction – civil and other / Build South London:

 Construction expertise is centred on the boroughs of Croydon, Sutton, Merton, Bromley and Bexley. A sample of these operations in the sub-region include: Mott MacDonald, TPS Consult, Stonewest, Frankham Consultancy, Kingswood Construction, Marlborough Surfacing, Faber Maunsell, Haden Building, and EPS Maintenance.  The impact of the construction sector is large as there are a few large corporates who win the contracts and then pass on smaller parcels of the contract to sub- contractors within the region. If the larger businesses suffer because fewer contracts are being issued (in line with a decline in public sector spending – budget deficit and only a small recovery in private sector), this will have a heavy impact on the smaller contractors who often are heavily dependent on the sub-contracts.  Linking into the construction sector is environmental technology as required by planning rules. There are a number of companies involved in the environmental sector, with a small centre of environmental excellence in the borough of Sutton, where BioRegional Consulting is based (provides sustainability consultancy services) and the Beddington Zero Energy Development (BedZED) in Wallington, the UK‟s largest eco-village. This is a sector that should be encouraged to grow with South London‟s strong construction sector and the increasing growth of regulation around the environment for the building industry.  See above mentioned logistics sector – Freight consolidation centre for construction - heavily dependent on construction sector business booming.  SLB‟s Build South London project: The Build South London Network is a focal point for construction activity in South London for both the supply and demand sides – a route to market for all construction related business support and supply chain opportunities. The network is led by main contractors, local and regional business support organisations, the Centre of Excellence, Construction Federations and small local construction businesses. Procurers have responsibility in stimulating improvement and change within their supply chains so that as much work as possible is undertaken by local businesses. By joining the Build South London network, small and medium size businesses will discover what they need to know and do to compete more effectively in the supply chain enabling the network to provide demand led business and skills development support.

Engineering – aerospace:

 Within the knowledge sector, companies involved in aerospace, defence and related industries form an important part of London‟s high-tech capabilities. Due to the presence of Biggin Hill airport, Croydon airport (no longer operational), and Kingston as a major military aircraft manufacturing centre for much of the 20th century, there are a number of companies involved in the aforementioned industries. Companies include: Thales, Northrop Grumman Sperry Marine, AMS (Alenia Marconi Systems

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owned equally by BAE SYSTEMS and Finmeccanica), Sigma Aerospace, Jet Aviation and Centronic.  Further examination needs to be conducted to examine whether any of the parts required from this sector are provided by those involved in manufacturing in South London. It has been indicated that South London councils wish to preserve its sector diversity and developing an understanding of the connections here would be helpful. With the number of airports in the south-east it would not be surprising if much of this sectors business comes from the regional airports, this would need to be examined further. It is evident a number of companies on the Biggin Hill estate and in neighbouring Croydon are aerospace focused so if Biggin Hill airport growth were not be sustainable this would impact a number of businesses in the local area.

Tourism – leisure, hotels & food:

 Hotels and restaurants are focused around the boroughs of Wandsworth, Lambeth, Croydon, Southwark and Bromley due to excellent transport connections. Key hotel chains operating in the area include: Holiday Inn, Travelodge, Jury‟s Inn, Marriott, Park Plaza, Travel inn, and Hilton, in addition to a number of independently run hotels.  Linking into the hotel sector is food & drink – and companies who supply the hotel sector. Lewisham and Southwark have a well established food and drink sector. This is due to the large fresh produce market – Borough Market – in Southwark supplies locals and the hotel trade, and the numerous food stalls and shops catering for the West African and Latin American communities in Peckham / Peckham Rye, Elephant and Castle and Deptford / New Cross areas. Some of the other boroughs in South London such as Wimbledon and Richmond also have delicatessens who supply the local hotel trade.  Also linking into the hotel sector is the number of tourist attractions in the area as well as the business base – without the business users and tourists attracted to the area – hotels would not do as well. This corresponds if you examine the high number of hotels based in Croydon to satisfy the business clientele and the high number of hotels in Richmond / Kingston to satisfy the numerous tourist attractions there.  The success of all three sectors – hotels, food & drink and tourism depends on them all working together efficiently and effectively to promote south London as a destination for tourism and a place to stay on business visits.

Figure 7.5

Destination of Sales in Last 12 months

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Source: LABS 2007

As can be seen from Figures 7.5 and 7.6 whilst the companies in the area tend to sell predominantly within their boroughs and secondly within the Greater London, they tend to primarily use suppliers from outside their borough (but within the Greater London area) rather than suppliers from within their boroughs. However, the supplier base is also significant in the wider South East and elsewhere in the UK.

This indicates that whilst the majority of sales (as expected) tend to be within their local area, the firms are much more sensitive and responsive to supplier pricing, and will therefore source from a much broader area. Clearly showing the greater diversity of supplier networks over the range of customer networks.

Figure 7.6

Source of the Value of Purchases from Suppliers

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Source: LABS 2007

7.10/ Transport For many businesses in South London the critical issue is transport and from business surveys and discussions with owners the following are the main challenges and potential areas for development that will open up the area to future inward investment and business growth. For a detailed breakdown of all transport schemes affecting the area please see Appendix 6.

General sub regional Issues

 International corporations often establish their logistical operations in South-West London due to the choice of two major airports, Gatwick and Heathrow, reachable in half an hour to one hour drive, and the ports of Dover, Felixstowe, Southampton and Tilbury easily accessible in one to three hours whilst the City of London and its large consumer base is only is close by.

 Five train operators in the vicinity provide connections to the City of London within an average time of 25 to 45 minutes depending on location.

 Other less well-known air transport hubs in the South-West London region include Biggin Hill airport and a helipad based in Battersea.

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 Eurostar travellers have a choice of either St Pancras (20 minutes from London Bridge by public transport), Ebbsfleet (15 minute drive from Bexley) or Ashford International stations ( 1 hour drive from Bexley).

 Major transport improvements recently completed are the East London line extension Phase 1 and the Docklands Light Railway extension. Crossrail and the Cross River Tram are still being anticipated.

7.11/ Skills Issues Through South London business‟ work on business retention and inward investment, we have gathered brief details on the major skills issues raised.

Table 7.8

Borough Positive - growth Negative Comments Across all boroughs SLB supplied Training needs – With the recession it training through train management skills in seems training has 2 gain programme the areas of customer been the first area for service, supervisory, businesses to make e-commerce, cutbacks, hence marketing, many businesses communication, and participating in our some specific courses government funded related to food & drink programmes in sector. 2009/10. Skills lacking: technical, ESOL, young people, construction, chefs, ITC. Bromley / Croydon Engineering & Engineering – civil / aerospace – always mechanical: This is a hard to resource as strong sector in there are fewer Bromley / Croydon students coming out and Kingston area with degrees in this with a few large firms area and the employing large workforce is aging. numbers of staff e.g. South London used to Mott MacDonald – have a strong skill Croydon, Muirhead – base in this area but it Bromley, Sperry is getting hard to find. Marine - Kingston. If businesses have to relocate to areas where they can more readily source engineering skills, this will have a detrimental effect on south London.

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8/ The Development Capacity of the Sub-Region

This penultimate section has been produced to provide an overview commentary on the perceived development capacity of the sub region. This moves beyond the simple representation of the „fact‟ into a level of interpretation based on existing data and research analysis. It is an independent review of the capacity and the issues affecting it, that are critical to the long term sustainable survival of the sub region.

8.1/ The Key Issues The analysis of business activity in the sub-region points to a potential for growth across a range of employment sectors, retail, leisure/tourism, knowledge services and, in some sub- sectors, industrial. However, there are many constraining factors. In particular, the majority of the sub-region is highly developed, so most pipeline opportunities have to be found from brownfield opportunities or, in the case of residential sites, through windfall opportunities. Unlike some other urban areas, there is a lack of heavy industry, so most PDL land is not sufficiently heavily contaminated as to present major development issues, though this is not the case for all sites.

Development potential of the sub region continues to be hampered by the paucity of cross- regional infrastructure and by other transport issues, as identified in TfL‟s 2010 analysis. For example, although Heathrow airport is close to the region and Gatwick lies just to the South, rail transport to Heathrow is poor and necessitates travel via Central London and although Gatwick has good links to Croydon, direct links by rail to other parts of the sub-region are very limited. The proposed Airtrack link - will provide accessibility and possibly occupational and investment demand within Richmond, thus providing enhanced viability of the key development sites within this region, but unless cross region links are improved the benefits are likely to be localised. In considering physical capacity issues, realistically, cross sub- region transport issues mean that multi nodal settlements is an appropriate strategic approach and one that fits with the drive towards localism that is arising both from bottom up initiatives such as the Transition Town movement and from government policies to promote localism

More of an issue than contamination is that of environmental sensitivity, with increased emphasis on the needs for ecological protection and promotion of biodiversity. This means that potential sites, such as the River Wandle Delta, which is currently identified and under consideration for primarily residential redevelopment, are likely to be strongly resisted; similarly, within Kingston borough, the possibility of utilising brownfield sites within metropolitan open space. Such issues may delay the realisation of identified opportunity sites.

Another challenge to the fulfilment of the identified office development potential of the sub region is the issue of viability of developments. For example, within the office sector, potential occupiers may be drawn to the area by the lower rental values when compared with West End and City/ Canary Wharf rents; however, the level of rents may impact negatively on the viability of schemes for developers. Further, as residential values revive there is a real possibility that we may see a return to the situation that prevailed during the mid 2000s when residential developments became significantly more attractive than office, leading to office schemes coming under pressure to divert to residential.

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There exists a steady demand across the sub-region for industrial premises; here the potential loss to alternative use is such that there has been a real need to protect against the transfer and this policy of retention is identified as critical in the core strategies of several boroughs in the sub region.

8.2/ Key Opportunity Sites Within most of the boroughs, key opportunity sites have been identified. Some of these are vacant and under discussion; others are very much part of the pipeline and subject to likely delays in coming forward.

The single most strategically positioned development site in the sub-region is Battersea Power Station (within the Vauxhall Nine Elms Battersea Opportunity Area). Whilst this has been standing empty and derelict for many years, it is strategic in that, if successfully developed it will both add significant capacity and, if there is significant retail offer, it may impact not only on the other centres in Wandsworth but across neighbouring boroughs. Described as potentially „another Canarf Warf‟ scale of development this area has the potential to deliver 20, 000 jobs.

Among the most important of the other identified sites in terms of their potential within the sub region are:

. Stag Brewery (Richmond) and Ram Brewery (Wandsworth – but this has recently had permission refused!) : These two brewery sites are large-scale and undoubtedly offer the potential to provide significant residential and commercial opportunities. When completed they may have impacts on neighbouring boroughs. The Richmond site is particularly important as a „defensive‟ development to help the borough continue to compete against other inner London developments, such as Westfield which has recently come on stream

. Richmond/Twickenham Station; Bromley South and Bromley North stations (Bromley); Clapham Station (Wandsworth); Wimbledon Station (Wandsworth) Tolworth Station (Kingston): One of the key factors coming forward in the analysis of core policies is the potential that is now identified in and around transport nodes, primarily railway stations. The idnetification of signfiicant opportunities for mixed-use and in some case also civic developments underlines the potential to combine infrastructure iprovments with realisation of development potential.

. Star and Garter (Richmond); Old Downs Hospital (Richmond); Surbiton Hospital (Kingston); Atkinson Morley Hospital (Wandsworth) Redundant or outmoded and under-utilised hosptial and care facilities have been identified as signfiicant development sites; however all the three listed above are likely to present challenges in terms of ecology and biodiversity; additionally Old downs is in a conservation area and the Star and Garter, is grade 1 listed so redevelopment is not an option, only appropriate and sympathetic re-use and extension of existing buildings.

. Metropolitan or Green Belt Open Land: sites have been idnetified in Kingston, Sutton and Wandsworth which are PDL but sit in designated open space land.

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Whilst they offer significant potential, they are challenging sites due to conservation and flooding issues.

. Town Centre Schemes: most of the SLP boroughs have identified signfnciant floor space potential within their CBDs for either or both retail and offices. These range from a planned extension to the Glades in bromley to large scale plans including an innoversity scheme in Croydon to a veriety of sites in Sutton and a complete redesign of Kingston town centre.

Whilst these large scale sites will undoubtedly be of signficance right across the sub-region, most present challenges and will be likely to be subject to lenghty periods of consultation making it very difficult at the current climate to estimate with any accuracy a time-scale for their incpetion and/or completion. Accordingly, if the SLP is to achieve its ambition of greater prosperity these large flagship schemes are not the key to success, although maintaining the competitiveness of the existing town centres and employment capacity is fundamental to the area.

As this is a desktop study, we have not assessed the capacity wihtin the SLP for the idnetification of other key sites based on redudant public sector buildings including health and education and on transport hubs but it is likely that, although some have undergone re- development in the last decade, they do collectively offer potential opportunities.

8.3/ Key Capacity Considerations In looking further at the capacity, it is relevant to restate some of the strengths and weaknesses of the sub-region. Key capacity considerations are:

. The need to meet housing targets which are very variable across the area;

. A need to preserve the undoubted strength in industrial land provision to ensure employment;

. A perceived mismatch between the quality of supply of offices and the emergent demand and a desire to bring in employment to reduce the levels of commuting both to central London and to outer areas;

. A need to maintain the competitiveness of the region in terms of retail and leisure/cultural offer in the light of increasing competition from outside developments.

The capacity to achieve these objectives aside from the realisation of the flagship proposals listed above is now considered.

8.4 Residential The targets for residential developments are extremely variable across the SLP area. Figures given in Core planning document reveal the following

Table 8.1

Housing Requirement Targets (15-20years)

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Bromley 11.458

Croydon 19,000

Kingston 3,850

Merton 4,800

Richmond 4,050

Sutton 5,175

Wandsworth 11,250

Source: Core Documents

Against these very variable targets there are differing degrees of optimism in terms of ability to deliver. Croydon has the most ambitious requirements, with a need to develop 19,000 new homes by 2031. They estimate (Croydon 5 year plan) that they currently have a total of some 8,100 units that could be developed from existing identified sites, which meets the 5 year target, but whilst identified capacity exists in the short term, but over the longer period there may be shortfall in the longer term. All future sites will have to come from PDL and, given the remaining policies, it is important that a drift from employment to housing does not accelerate. This presents a real tension.

Further, closer examination of schemes within the MTC reveal that the predominance of future supply is likely to be in the form of flatted developments, mainly 2 bedroom units. Very little family accommodation within 3 bed flats or within houses is identified. Few identified units show provision for ancillary services, such as crèche or medical/healthcare. The identification of additional residential is therefore for single/couples rather than for family accommodation. Whilst this provision ties in with the projections of Croydon‟s future population growth being largely not stable family units, if the future stock is so concentrated this will have an impact on the services required and on the type of retail development that is likely to be viable. Over the longer term, for prosperity to be maintained an enhanced, future housing provision will have to allow for more family units and affordable provision.

In contrast, within Richmond, the estimated increases for residential units is modest, with the main areas of increased provision being within Richmond itself (700-1,100 units), Twickenham (700-1.100 units) and Teddington/Hampton (700-800 units). Given the proliferation of conservation areas (Richmond has some 72 conservation areas) which both acts as a pressure for, but restrictions on developments and a general lack of large vacant sites, most additional stock must come from either redevelopment at higher density or through windfall. However, recent changes to PPS 3 introduced by the coalition government in relation to back garden developments will reduce the stock of windfall sites moving forwards.

Analysis of Merton‟s opportunity sites reveals total pipeline of less than 3,500 units. Of these the best estimates are for some 510 units within 12 months and then a steady flow over the following decade. A key feature of the pipeline is that many of the identified sites are small;

100 only 1-5 dwelling projected and only 10 sites are likely to yield in excess of 100 units per site. Some major sites exist including around Wimbledon Station and closed facilities such as Atkinson Morley Hospital but there is undoubtedly limited scope for major additions, unless associated with the loss of community (schools and hospitals) or employment sites. Merton‟s longer term housing trajectory indicates that whereas there are identified sites to accommodate next 5 years there will be a dependence on windfall sites thereafter.

In Bromley, targets are much lower, and the proliferation of sites for mixed use in and close to the town centre give some level of confidence that the supply target can be met. However, within mixed-use schemes most residential is flatted and it is possible that the type of accommodation may not meet residential occupier preferences. Similarly in Kingston, which has seen major developments such as Charter Quay in recent years, it is estimated in the Core Strategy that the identified sites, which are focused on the town centres of Surbiton, New Malden and Tolworth and the area south of Tolworth will enable targets to be met.

In summary, the position across the sub region varies. There is the potential in most boroughs for the next 5 years at least. However, there is concern about the amount of affordable housing that will be delivered and, with some boroughs concentrating residential provision in mixed-use town centre schemes, balance of type of housing could become a longer term issue. Unless the developments are appropriate to support the developing needs of the population, then economic prosperity cannot be assured. Further these areas are for the most part high value and attract residents for the quality of the housing stock, the suburban experience and in many cases living within historic and protected environments. Delivery to match these aspirations will be important. In the longer term windfall sites, back land sites and possibly loss of open space may be needed to accommodate targets.

8.5/ Offices The London Office Policy Review (GLA/Ramidus) points to poor prospects for offices within the sub-region, as the size of government requirements decrease, major schemes concentrate in diverse sites across Central London (mega developments) and back office functions move to remote, even offshore, locations. Overall this report suggests little need for significant growth within the office provision across the sub region. But this is obviously based on a very localised perception of existing circumstances and does not take into account a range of factors, particularly the need to create sustainable decentralised growth. in terms of the potential to increase the prosperity of the region, analysis of Core Strategies point to a slightly different picture and indicate that there is a shortage of good quality office accommodation in most boroughs; for example in Wandsworth a report by DTZ identified a current undersupply but potential through current allocations to yield almost ½ million sq m of floorspace which they conclude should on current take up ensure sufficiency of supply.

A common feature running through most of the boroughs is that the office stock is old, low quality and often units are too small to attract incoming high skills businesses. This is particular noted in Croydon, Bromley and Richmond, all of which have very good connections to Central London and against whom they compete.

Further evidence of demand for commercial premises lies in the vacancy rates. Whilst these are variable across the sub-region, CLG‟s review of commercial vacancies rates figures

101 gathered prior to the recession revealed that vacancies rates were generally low. Wandsworth and Bromley recorded the lowest rates (4% and 5% respectively) with Sutton and Croydon being highest at 10% but still below the 11% average for London. Since the recession, rates have risen and, for example, it has been estimated that in Merton alone the rates have approximately doubled to some 15% for offices, but this is considered to be in line with commercial markets generally

However, the low rents (£15-20 sq ft) and marginal development viability mean that that some potential employment sites are under pressure for change to residential, thus further potentially weakening the pipeline for increasing employment. There has therefore been identified a need for good office (B1) development sites which would support significant developments in areas that have appropriate transport links i.e. close to railway nodes. Elsewhere refurbishment of existing space to good standard is a more feasible way on delivery.

Analysis of the potential development pipeline reveals that there is considerable capacity cross the sub-region. Within Croydon: significant opportunities sites close to the town centre with proposals for high rise offices notably in George Street and Cherry Orchard Road, in well connected sites to replace outdated post-war developments. It was identified in the PACEC report that Croydon had potential for between 111,300- 181,000 sq m of new floorspace (p.61). Whilst this estimate is historic, little development has taken place during the downturn and there is a significant pipeline possibility within the core central district.

However whilst the schemes currently either with consent or under discussion, would provide significant new high quality office developments, this addition to office stock is at the expense in part of industrial users; further some potential office sites are now more likely to be developed out residentially.

One of the features of some of the boroughs is the high percentage of those employed within the creative industries. This is a feature within the Croydon and those boroughs lying to the West (Renaisi, 2008). To service these industries, it is important that a stock of small „start up‟ sized office units remains available. As there remain significant amounts of secondary space, this offers the real potential to continue to foster such start ups. Additionally, refurbished space is equally appropriate for start ups so some confidence can be given in the pipeline moving forward.

Kingston, which is less well located than Richmond and Wimbledon for offices due to weaker connections to Central London has been identified as an area of static rents and where there is a demand for and need for small spaces for start up businesses.

Within Richmond, the supply of office space is fairly static (URS, 2009p 33) and there are very few pipeline sites for large scale office developments (Crane Valley), and generally a shortage of high quality stock. The solution to this is seen to be good quality refurbishment as it is unlikely that new sites for large scale schemes can be identified. However, given the employment projections (GLA economics) there will be a need for increased space to service business. Whilst the contraction of the public sector may counter-balance to some extent, there is still a need to identify additional space.

Bromley is still developing its Local Development Framework and that will identify strategic sites for office development, as in common with the rest of sub region the stock is often not

102 of currently required quality. However within SCS it has identified that commercial development is required and that it is important not to allow pressures for more housing take employment sites.

Merton has identified a number of town centre sites and lack of office capacity is not an identified risk here.

For the sub region generally, the issue in terms of capacity is more about the appropriate type of stock rather than overall floor space and the potential to deliver new decentralised sub regional economies. In terms of immediate demand, the greatest pressure is likely to come from small start ups and creative/innovation concerns apart from a few easily accessible locations such as Wimbledon, Richmond and Croydon.

8.6/ Retail Across the sub region, there are several major retail areas, including the regional centres of Richmond, Kingston, Croydon and Bromley and smaller town centres such as Wimbledon and Clapham. Indeed the sub region plays a very large role in the provision of retailing for Greater London with GLA/Experian (2009) estimating that 6 of the top 20 retail centres within London fall within the sub-region as shown below:

Table 8.2

Retail Centre Rankings in South London

Centre Name Position Floorspace in Estimated sq. m Turnover £m

Croydon 2nd 180,531 636

Kingston 3rd 169,531 646

Bromley 6th 108,222 444

Sutton 8th 95,782 325

Croydon (Purley Way) 9th 91,481 289

Wimbledon 20th 47,799 240

Total sub-regional major 693,346 2,580 centres

Total top 20 London centres 2,593,166 10,726

Sub-region as % of top 20 27% 24%

Source: GLA/Experian 2009

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Given that the West End accounts for some 33% of all London floor space and 39% of turnover, the contribution of the sub-regions major centres is extremely significant. However the recent lack of investment, the addition of Westfield and the planned White City and Stratford centres within central London mean that competition will increase. It is therefore important that floorspace is not lost and investment is undertaken to enable the centres to retain competitiveness.

However, whilst there are well let and successful centres, most have been identified for some inward investment or regeneration. Across the sub-region little significant additions to floor space have taken place and where schemes have been identified the economic downturn has led to a stalling of the process. However, with increasing confidence the scope exists to improve and consolidate the major provision. For example Bromley is planning an extension to the Glades Retail of up to 22,000 sq m which should enhance its position within the London top 20 and help it defensively against for example Bluewater and Kingston has long had plans for a town centre regeneration scheme. Capacity studies for Kingston have identified sufficient capacity in the town centre to support 50,000 sq m gross additional floorspace. Sutton has a series of smaller sites identified and it is estimated that there is capacity within the pipeline to meet needs, although if planned investment in Croydon is realised it is possible that Sutton might suffer.

Although Croydon is the largest retail centre in London outside the West End, it is in need of investment as its turnover is less per sq metre than some other centres, notably Kingston, reflective of the lower income per head. Driver Jonas (2009) reported that Croydon was in need of a „significant‟ amount of new retail floorspace for the period up to 2021. Partly this is due to the loss of Allders, which has significantly changed the retail mix in the town which now has an under-representation of „aspirational‟ shopping. This is particularly in the currently vulnerable area to the south of the town centre which is under-performing and Drivers Jonas, suggest could provide mixed-use development possibilities. In terms of realising the potential, the break in pedestrian flow caused by Wellesley Road is an issue, as is the complex land ownership patterns and these will require address.

Richmond has a vibrant retail offer, but according to GVA Grimley‟s 2009 study, there will be increased need for floorspace moving forward. Unlike Croydon, Richmond has aspirational shopping but the perceived lack is more toward convenience and comparison shopping. The study also highlighted risks such as Westfield, which could cut into the core market for Richmond retail unless Richmond does take measures to ensure that the town centre offer meets the needs of key high quality retailers.

Merton does not have one of the main regional centres, but as identified above Wimbledon is an important retail centre. It also benefits not just from good communication in and out of London/Surrey but the tram to the east has set up good communications with Croydon meaning that the two retail centres are in potential competition n more than before. Retail capacity studies for Merton indicate that there is a need for increases in both convenience and comparison retail floorspace which are deliverable within identified sites.

In Wandsworth the adopted core strategy places town centres as the focus for the development pipeline. Central Wandsworth and the Wandle delta provide opportunities notably with the Ram Brewery site which with extensions to the Southside Shopping centre could provide 40,000 sq m of commercial space. Although, with the recent permission on

104 this development refused, it will have to be reassessed. A report on retail capacity in Wandsworth (Lond2008/R11397) provides a detailed analysis of both current capacity and future pipeline possibilities in the borough including convenience as well as comparison shopping. This concluded that a good balance exists for convenience shopping and some competitive pressures from both across and beyond the sub-region for the major centres.

In terms of capacity, however the opportunities sites, excluding Battersea Power Station should suffice for likely future demand. Further this report, written before the full impact of the economic downturn was evidenced concluded that if Battersea were to be developed there could be negative implications for Clapham and Wandsworth and possibly across centres in adjoining boroughs in the sub region most notably Wimbledon.

Whilst in summary, the capacity is estimated to be capable of growing to enable regional and town centres to continue to thrive and support the residential catchment populations, aspirational and wealthy, investment is needed to ensure that share is not lost to new central London schemes.

Further, the same in not necessarily the case with local and district centres across the SLP area and many of these, particularly in areas of high deprivation are struggling and will find it difficult to remain competitive.

8.7/ Industrial/Manufacturing Across the sub-region the availability of the „right type’ of industrial and stock capacity has been identified as an issue (Industrial Capacity London Plan SPG, 2008). As with offices, vacancy rates are low and, in most cases, below the London average. For this reason some parts of the sub region have been designated as restricted in relation to transfer of industrial land to other uses (GLA Industrial Capacity SPG). However a review of the identified residential opportunities sites does reveal that when developer demand revives, some industrial sites will be under pressure for change of use away from manufacturing. Given the identification elsewhere in this report that the continued presence of a manufacturing base is a key strength, it is clearly important to the maintenance of sites for industrial purposes is maintained.

Areas where there may be particular pressure to lose industrial sites are Richmond who have identified it as an issue and Wandsworth. Richmond does not have a large land use allocation for industrial purposes. It is estimated that the total land used for manufacturing/B8 is in slight decline and likely to so continue; however URS estimate that a brought balance of supply and demand will continue until 2026 (URS, 2009).

One area of potential growth for several of the boroughs is in relation to waste management schemes for which there is a need, as identified specifically in Sutton and Kingston, where there is a general shortage of B8 sites and Wandsworth. In addition, the sub region has been identified as appropriate for some small-scale innovation and research and development facilities. It follows therefore that the need is likely to be for small sites that have good accessibility. It is for these that there might be shortages moving forward.

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8.8/ Cultural / Leisure/Hotels The sub-region has a rich heritage of open spaces and leisure facilities to service its residents and many attractions have a visitor base which stretches far beyond the borders of the area – for example Wimbledon, Fairfield Halls and Croydon Airport to name but a few. Notwithstanding, there is an identified need to enhance not just heritage and open leisure and sporting facilities but also D2 class uses such as cinemas, restaurants and a range of cultural and arts venues.

Bromley and Croydon are among those who have identified sites for hotels whilst both Bromley and Sutton have specified the need for cultural venues. In terms of site capacity no specific capacity studies have been analysed but given the importance in employment terms of leisure to the SLP this is an area where greater capacity moving forward may be required.

In terms of employment and economic development, the tourism industry could potentially be a huge area of untapped demand. However, at the moment there is little to link the sub region with other areas in the OMA or Central London, by the way of a strategy or actual infrastructure.

8.9/ Summary The sub region has many development constraints: it has a stock of buildings that often do not meet changing needs and a large number of conservation areas and some metropolitan green belt. Additionally some areas are in the Thames flood plain which could face increased development restrictions moving forward as planning and insurance restrictions tighten.

The immediate development capacity does indicate it can accommodate growth, although in some areas residential capacity is insufficient unless either brownfield land in open space is released or greater density can be gained through back lands or windfall sites. Office capacity is less of an issue than the type of accommodation but industrial land is in short supply and to preserve economic vitality it will be important that sites are not lost to alternative uses.

Lastly, the area has a good number of significant or very significant opportunity sites which have the potential to yield significant development capacity, but which could also re-shape the landscape economically as well as physically. Whilst some of these, such as Battersea have long and complex planning histories, there is real potential in optimising land around transport nodes such as is proposed in Richmond, and where educational and health facilities are being rationalised.

Capacity is very much an issue of perception and vision. At present, there are many perceptions of what the sub region can and should be able to deliver. Considering the increasing need for more localised forms of sustainable development, the potential development capacity of the sub region should be viewed at the more optimistic end of the spectrum if a more holistic approach towards development is to be taken. Therefore, rather than just simply defining the constraints of the sub region, which lead to a self fulfilling prophecy of limited/stagnant growth, it would be a far more considered opinion to consider what needs to be done to achieve its potential within a more sustainable city-region.

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9/ SWOT Analysis of the Sub Region Strengths Weaknesses

 High residents skills base across the sub-  Low productivity (GVA per head) within the region with high proportions of residents sub-region as compared to London and holding senior and managerial positions South East (compared to South East and  Lack of retention of high skilled residents West/East/North London) leading to very high levels of daily out-  Strategic location in relation to London, commuting South East and major airports  Over-reliance of economic structure on  Strong and stable levels of public admin and banking/financial services entrepreneurship and enterprise within the  Weaknesses in transport (public) links in sub-region some areas, particularly cross-boundary,  Good direct transport links into Central leading to high levels of car use and London – particularly rail and underground problems with congestion on road networks  High levels of economic activity amongst  Pockets of serious deprivation within the working age population sub-region  Strong regional retail locations with high  Significant disparity between residents and retail turnover workplace based earnings  Growing tourism and cultural offer with  Lack of identified clustering and branding major sporting and leisure destinations across the sub-region located within the sub-region  Poor quality, ageing office accommodation which is inappropriate for demand – leading to high levels of vacancy Opportunities Threats

 Nascent growth potential within small/micro  Issues with NEET in younger population businesses  Identified skills gaps – particularly technical  Sectoral growth in the environmental/green and vocational skills but also cross-cutting industries and business opportunities to customer services and manual labour support „green‟ reputation of sub-region  Pressure for conversion of employment  Strong demand for smaller, serviced start- sites to residential use up workspaces  Vulnerability to public sector cuts due to  Clustering strength of Wandle Corridor as high reliance an industrial location  Retail offer under stress  Potential to recapture high skilled residents  Continued loss of larger employers who are unemployed due to the current currently located within the sub-region economic downturn (or want to take  Issues with long term survival rates of advantage of QoL) enterprises within the sub-region  Major mixed use redevelopment and  Increasing competition from London and regeneration pipeline – Croydon, South East, both in terms of business and Wandsworth & Kingston retail  Extension to existing tram system represents a significant opportunity for commerce and retail within the sub-region  Capacity for housing growth  Strengthening of retail sector as localism and more sustainable transport patterns become norm

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10/ Summary?????

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