New research by Grant Thornton UK LLP suggests London’s business, societal and political leaders must rethink their approach to the structural challenges faced by the city. Steps to tackle key issues like housing, health and transport must be elevated on agendas across the city to ensure London remains a vibrant global capital, attracting top talent to live, work and grow.
The study – published today in a new report, Vibrant Capital – surveyed London residents and young adults from across the UK1 to understand the push and pull factors affecting the workforce of one of the world’s leading cities. Its findings suggest London is set to lose significant portions of its most economically productive demographic, while young people from across the country are being dissuaded from coming to the capital by pressing issues such as the high-stress environment, lack of work-life balance and high housing costs.
Who’s staying and who’s going?
Around one in six (16%) Londoners – or just over 1.4 million people2 – expect to leave the capital within the foreseeable future. With the Office of National Statistics calculating the Gross Value Added (GVA) per capita in London as £43,6293, this represents a total potential loss of around £60bn in GVA from London’s economy.
Moreover, 6.2% of residents surveyed said they intend to leave in the next 12 months. Compared to the last available ONS data on UK migration, which showed that 4.4% of residents left London in 2015-16, this would represent an additional c.158,500 people (1.8% increase) leaving the capital – around a £7bn hit to London’s GVA.
The desire for a healthy stress-free life and a better work life balance as well as concerns around the affordability of housing topped the list of priorities for these ‘London Leavers’ who were typically between 25-34 and in full time employment. Those planning to leave were also almost twice as likely to have been born outside the UK in the European Union, whilst 26% of respondents surveyed hope to leave not just London but the UK entirely.
The research study also surveyed 1,080 university or college students and 315 young people aged 16-18 from across the whole of the UK to gauge their intentions to live and work in London in the future. 51% of all young people surveyed said they have no desire to come to the capital to live or work, citing work-life balance, housing affordability and being near to family and friends as the biggest factors influencing their decision. Of those currently studying at a London university or college, 71% want to stay in the capital after graduation, with 29% planning to leave as soon as they have graduated.
Vibrancy and retention
There are interesting correlations between the findings of the study and Grant Thornton’s , which measures 324 English local authority areas against key indicators including ‘Prosperity’ and ‘Health, Wellbeing & Happiness’. This latest study shows that London boroughs which perform poorly on the Vibrant Economy Index typically see the highest proportions of people planning to leave. Barking & Dagenham, for example, which ranks second to last in the country for ‘Health, Wellbeing & Happiness’, has the second highest proportion of ‘Leavers’, with more than a quarter of people planning to move away from London.
Sacha Romanovitch, CEO, Grant Thornton UK LLP:
“London is an amazing city and it is great so many Londoners see the huge benefits of living and working here.
“London is also in a unique position globally – with the government, financial and tech centres all in one place. Imagine – it’s the equivalent of Washington DC, New York and Silicon Valley all in one place. This combined with its rich social and cultural diversity make it an energising place to live and work.
“Yet there are some big challenges to grasp that, if not addressed, will risk key people to the future vibrancy of London choosing to leave and will also deter talented young people from coming here at all. The shortage of affordable housing, overcrowded transport systems, air pollution all add to the daily stress of living and working in London. We know that these challenges won’t be solved by any one agent alone. In the midst of the uncertainty around Brexit the imperative for business, government and community leaders to work together to address these important issues has never been higher.
“Devita Davison, a community leader at the heart of regeneration in Detroit said ‘nothing about us, for us can happen without us’. We must follow her lead and design solutions informed by views from across London’s rich cultural, commercial, political and social spectrum. Together we can shape the future of our vibrant capital city – such that it continues to thrive as a trusted global centre and a growth generator for the UK as a whole.”
Grant Thornton is hosted the Vibrant Capital Summit on Tuesday 15th May, to further explore the challenges London faces and collaboratively debate solutions for its future.