Britain’s town centres: down, but not out

Image: Mayfield development, Manchester (U+I plc)

Town centres have taken a battering in the past year, with many shops and services forced to close during lockdowns and growing numbers of stores going out of business.

But even before Covid-19, UK high streets were already under pressure. Economic recessions, rising business rates, higher rents, the growth of online shopping and development out-of-town retail parks have left Britain’s town centres struggling to survive.

Last month, Planning magazine brought together a panel of experts to discuss the future of town centres. Among the issues considered were trends affecting town centres, how demand for town centre property is changing post-pandemic and how developers are responding to changes in market demand and planning laws.

The bigger picture: online shopping and working from home

Jennet Siebrits, head of CBRE UK’s research team, gave a helpful overview of two key trends affecting town centres.

In the past decade, e-commerce has seen a dramatic increase in activity. Since 2011, the value of online shopping has mushroomed from £23 billion to £58 billion –a 158% increase. But in 2020, even that figure was eclipsed, with the value of e-commerce rising to £84 billion – a 44% increase in just one year. The evidence from the first national lockdown suggests that this step change is here to stay.

The impact of this, along with the Covid-19 restrictions, has been grim for town centre stores. Over 11,000 shops closed in 2020, and while not all of those closures were due to online shopping, it’s clear that e-commerce has been a real driver of this.

Jennet suggested that, as the restrictions ease, it’s likely that supermarkets, along with in-store health and beauty and DIY stores will continue to attract customers. But other sectors will have to come up with innovative ways to lure consumers off their iPads.

Jennet also highlighted the increased move towards home working. Once people return to their workplaces, it’s likely that many will ask to continue working from home, at least for part of the working week.

The rise in home working may also affect demand for residential property, with more people moving further away from city centres. This could have a knock-on effect for ancillary services like coffee kiosks and sandwich bars, with local town centres capitalising on the losses experienced by city centres.

The legal perspective: changes to planning laws

David Mathias, a specialist planning solicitor at Shoosmiths law firm described some recent planning law changes that have particular relevance to town centres.

Since the demise of Woolworths in 2008, more and more UK department stores have been closing down, leaving big gaps on the high street. In future, it’s likely that many property developers will want to convert from retail to residential.

Until recently, permitted development rights for conversion to residential only applied in a limited set of commercial uses. But the UK government has announced new permitted development rights in England enabling greater flexibility on conversions without the need for planning permission. These will go ahead in August, subject to certain conditions.

In addition, further legislation on expansion of permitted development rights introduced last summer allows the construction of an additional storey on freestanding blocks and buildings on a terrace to create additional housing, and the demolition of buildings built before 1990 and construction of new dwellings in their place.

The government has argued that these changes will help to revive town centres, although others believe easing planning rules for developers will have the opposite effect. 

The developer’s perspective: re-imagining Manchester

Martyn Evans from the U+I Group offered his view of how developers are responding to changes in market demand and planning. He did so using U+I’s development at Mayfield in Manchester.

Located next to Piccadilly railway station, in the centre of the city, this 24 acre-site is being redeveloped from derelict railway land. A consortium of Manchester City Council, Transport for Greater Manchester and London & Continental Railways (LCR), along with U+I, has been working to regenerate the area, with the first buildings due for completion next year.

Right from the start, the consortium focused on the importance of creating a place where people want to live, work, rest and relax. One important feature of the development is a seven-acre park. Although it was planned into the scheme years ago, this green space has become all the more significant in the past year.

Image: Mayfield development, Manchester (U+I plc)

The pandemic has demonstrated the importance of green space as a vital part of city living, both for physical health and mental wellbeing. Such spaces not only attract workers, residents and visitors, they also increase the value of developments. And because decisions about commercial property are increasingly being taken by HR teams rather than finance departments, the wellbeing benefits of workers’ surroundings are being taken more seriously. In short, understanding quality of place gives developers more of a competitive edge. 

The local authority perspective: managing change

To conclude, Michael Kiely from the Planning Officers Society looked at what local planning authorities can do to help sustain town centres.

Michael described some of the planning tools local authorities can use, including strategic planning, masterplanning and local plans. But with recent changes in planning laws, including the use classes order, Michael argued that policies such as Town Centre First may be ineffective.

However, local authorities can still make a difference, through partnerships with other stakeholders, such as land owners and Business Improvement Districts (BIDS), and the use of intervention and compulsory purchase powers.

In closing, Michael suggested the need for a licensing or permitting regime to manage and curate activities so that they do not cause harm and town centres can thrive.

Future perspectives: rethinking town centres

A £150m project to revamp London’s Oxford Street signals that high streets are already re-imagining themselves as leisure-focused and “experiential shopping” centres. And the Mayfield site in Manchester has the potential to transform a part of the city centre that has been underused for decades.

These are just two examples of the planning community working together to help sustain town centres. Britain’s high streets face substantial challenges, but this interesting discussion suggested there are good reasons to optimistic about the future.

A recording of The Future of Our Town Centres discussion is available to watch on-demand at the Planning magazine website.


Further reading: more on town centres from The Knowledge Exchange blog

Taking the long view: futures thinking and why it matters

Photo by Kelly Lacy on Pexels.com

Take yourself back to the beginning of the last decade, Gordon Brown is the Prime Minister, the term Brexit has yet to be coined, and the Nokia 1280 was the world’s best-selling phone. In the ten years that followed it’s no understatement to say that the world is almost an unrecognisably different place. And that’s before we even discuss the impact of the Covid-19 pandemic.

Consider the widespread roll-out of high-speed internet and the adoption of smartphones: the development of both of these technologies has massively expanded the locations in which we can learn, work, shop, and consume and produce media. In 2010, 28% of the UK population actively used a smartphone, by 2019, it had almost trebled to 82%.

Developing the digital economy

The widespread adoption of devices that provide users with the ability to easily access the internet and download applications has created an entirely new sector of the economy. Apple estimates that the iOS App Store in the UK alone has generated more than £3.6 billion in total earnings and supports up to 330,000 jobs. Analysis by Vodafone has estimated that the UK internet economy is now worth £82 billion – that’s 5.7% of the UK’s GDP.

Put simply, in the space of a decade, technological advancements have enabled the development of an almost entirely new sector of the economy and changed the way we all interact with each other.

Unfortunately, not everyone experienced the benefits of the digital age, as can be seen by the numerous closures of big-name high-street retailers. Many of these failed to anticipate the pace and extent to which consumers would embrace e-commerce and online-only retailers, such as Asos and Amazon. The failure to anticipate the speed at which people would begin to use smartphones, gain access to high-speed internet, and shop online is a prime example of the need for futures thinking.

Embracing uncertainty

Futures thinking (sometimes known as strategic foresight) is an approach that can help identify the drivers of change that will shape the world in the future. Crucially, futures thinking is not about predicting the future, rather, it’s about considering how the numerous plausible potential futures may have an impact on today’s decisions or policymaking. A key element of futures thinking is the need to embrace uncertainty, and accept that our future is not predetermined and can be altered at any time, by any number of factors.

Techniques that are commonly used within futures thinking include:

–       Horizon scanning

–       Axes of uncertainty

–       SWOT analysis

–       Backcasting

However, it’s important to acknowledge that there is no set approach to futures thinking; it’s flexible and can be adapted to meet the needs of any organisation. This flexibility is something that the Government Office for Science highlights as a key benefit, as it actively encourages “creative approaches” and supports a high level of customisation.

If we apply this to the previously mentioned example of the widespread adoption of smartphones in the 2010s, you can see how futures thinking may have been a useful approach to help decide how much focus traditional retailers placed on developing their online stores. For example, most of the evidence at the time concurred that the use of smartphones and e-commerce would gradually grow. However, the pace at which they would grow was relatively unpredictable.

Therefore, a futures thinking approach may have considered how different paces of smartphone adoption may impact the number of people shopping online. This may have been useful to determine the level of investment required to develop an online platform that would meet the demands of an ever-increasing number of online shoppers.

Creating a futures culture

Taking a long view and considering how future events may impact the decisions you make today can have several benefits. One of these is the development of more resilient policies which can take advantage of changing circumstances, and mitigate against potential risks. The Department of the Prime Minister and Cabinet (New Zealand) contends that this approach allows for the creation of “policy that helps shape the future to promote your desired outcomes and prevent undesirable events”.

Additionally, the Government Office for Science, argues that even just by undertaking futures thinking exercises, an organisation’s focus can be shifted towards a more long-term outlook. In turn, this can generate new ideas and approaches, which can lead to innovative solutions to potential future challenges.

In short, futures thinking can facilitate an entire culture change, and create organisations that are more responsive and proactive in addressing emerging opportunities and challenges.

Limitations

Naturally, futures thinking does have its limitations. It’s not always an appropriate approach and it cannot anticipate every possible eventuality.

For futures thinking to be successful, it’s important to recognise that it provides the best results in situations where there is a great deal of uncertainty. As a result, in scenarios where there is relative certainty surrounding changes that may affect a policy, there is little benefit to adopting a futures thinking approach.

Futures thinking can also be complex, trying to envision and anticipate numerous eventualities can be difficult and requires an element of trial-and-error to explore the tools and approaches that will be useful for each organisation. In particular, it’s important to consider the scope and objectives of any futures thinking exercise, as there is potential to take too wide a view of an issue and over-extrapolate data. This runs the risk of ignoring the context of an issue, which may highlight that certain scenarios won’t conform to typical linear prediction models.

Final thoughts

Amid a global pandemic, where certainty is regularly sought after but rarely found, a futures thinking approach may be useful to help those who make decisions and create policy.

Lockdowns, vaccines, and other public health mitigations do look like they will provide us with a chance to live with the virus , and get back to something that resembles normality. However, the potential for new variants of concern to develop and spread around the world creates a level of uncertainty. Futures thinking provides the framework in which to consider how each of these potential eventualities, may impact the decisions and policies made today.

In short, in a world where certainly is hard to come by, futures thinking may provide us with a way in which to continue to create policy and make decisions that can continue to be advanced no matter what the future brings. However, for this to happen, it’s important to remember that no one can truly predict the future.


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Are ‘dark stores’ bringing some much needed light to the high street?

As we pass the first anniversary of the initial lockdown and look towards opening things up again, will we see a change in footfall trends in favour of the high street as people yearn to get out again, or will it continue to experience a downward trend?

Judging by pre-pandemic trends, it would seem that high street businesses will need to do more than just open back up to entice people back to the high street. Indeed, there were signs of diversification on the high street before the pandemic in response to declining footfall. And the pandemic has led to many more innovating to survive the current challenges, such as creating pop-up ecommerce centres. Perhaps such moves could help save the high street, albeit not as we know it.

A downward trajectory

The recent news of permanent closures of big-named high street stores such as Debenhams, Laura Ashley, Top Shop and Dorothy Perkins after the collapse of Arcadia Group, and the closures of more John Lewis outlets, suggest a bleak outlook for the high street. And the pandemic has spurred the worst decline on record.

Recent figures from PwC reveal that an average of 48 stores, restaurants and other leisure and hospitality venues closed every day in 2020 – a total of more than 17,500 outlets.

This may be the worst decline on record but it is also a continuation of the downward trajectory that the traditional high street was already on. And it has been argued that this is actually a reflection of things that happened pre-pandemic, with its full impact ‘yet to be felt’.

In its quarterly footfall monitor, the British Retail Consortium highlighted in May 2019 that high street footfall had fallen by 1% year-on-year and that vacancy rates on local high-streets had risen to 10.2%, equivalent to one in ten shops having succumbed to the high street crisis. This was the highest vacancy rate in four years and it continued to increase in the next quarter.

Support through a crisis

It has become clear that trends before the pandemic have just been accelerated by it. The continued growth in online shopping and the impact of government policy costs such as business rates are just a couple of the causes of the decline in high streets over the years that see little sign of abating. But the urgency of the current situation has seen a huge increase in government support across the board which has helped many businesses stay afloat as they try and wait out the storm.

In December 2020, the UK government announced it would invest up to £830 million from the Future High Streets Fund in local high streets across England to help them recover from the pandemic and drive long-term growth.

In September 2020, funding was secured for England’s historic high streets through the £95 million government-funded High Streets Heritage Action Zone (HSHAZ) programme, which is delivered by Historic England. The aim of this is to help transform and restore disused and dilapidated buildings into new homes, shops, work places and community spaces, restoring local historic character and improving public realm.

And just this month, the government has announced a series of new measures to support a safe and successful reopening of high streets and seaside resorts, including a £56 million Welcome Back Fund to help councils boost tourism, improve green spaces and provide more outdoor seating areas, markets and food stall pop-ups. This builds on the £50 million Reopening High Streets Safely Fund announced in May 2020. Similar support schemes have been introduced by the devolved administrations in Scotland, Wales and Northern Ireland.

Of course, this hasn’t been enough to save the high street stores that have announced closures. But it brings to the fore once more that high streets are about more than just shops as each funding programme highlights the aim of transforming high streets into vibrant mixed-use places where consumers can enjoy social experiences.

Adapting to survive – dark stores bringing light to the high street

As the PwC study suggests, it is really about keeping up with consumer behaviours that is the challenge for retail, perhaps even more so in times of crisis. And there have been many examples of high street retailers adapting to survive.

With the huge increase in online shopping during the pandemic, many manufacturing and distribution centres were operating at maximum capacity which led to some retailers unlocking the potential of their local high street stores to provide local distribution hubs, known as ‘dark stores’.

Lush is one company that changed the way they used their retail space so they could continue to use it while their stores were closed. It created Lush Local, a pop-up e-commerce centre which used the shop as a local distribution centre so they could fulfil local orders and not let their current stock go to waste.

Some businesses have also partnered with others to make use of local unused space such as Crosstown Doughnuts which have been trialling the use of dark stores in Cambridge and Walthamstow, partnering with independent operators so it can provide on-demand deliveries and collections to customers.

As ‘bricks and mortar’ retailers try to adapt to support their online capability, providing efficient local deliveries, at the same time as utilising their physical retail space, the ‘dark store’ trend may be here to stay. Pre-pandemic, it was reported that using dark stores and offering click and collect can reduce delivery costs and increase profit margins. Analysis showed that if deliveries from dark stores increase by 50%, profit margins could grow by 7% as a result of lower delivery costs and higher delivery throughput compared to conventional stores (while also not affecting store operations).

And it has been suggested that this model can be further adapted to provide ‘hybrid stores’ as shops re-open. These hybrid stores enable local stores to combine space for their fulfilment centre with their physical shop so consumers can still benefit from the tangible experience offered in store that can’t be replicated online.

Final thoughts

Only time will tell if recent innovations will have the desired effect. What is clear is that the rate of change cannot continue at the pace it was before the pandemic if high streets are to have a fighting chance. Dark and hybrid stores could be part of the answer. But much more is needed.

The most successful high streets, it is argued, will offer a mix of retail, entertainment, culture and wellbeing as they focus on the experiential side of things, because, in the words of retail guru Mary Portas, “vibrant, innovative, socially dynamic high streets will help this country not just heal, but thrive.”


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“The infrastructure of everyday life” – has the time come for the foundational economy?

The last few years has seen growing interest in what has been termed the ‘foundational economy’ and its potential value for achieving economic security and social sustainability. Accounting for around 44% of UK employment, it has been argued that supporting this section of the economy could ultimately improve productivity. And the current pandemic has placed even more emphasis on the importance of the foundational economy – the part of the economy that cannot be shut down.

What is the foundational economy?

The foundational economy provides universal basic services built from the activities which provide the essential goods and services for everyday life, regardless of the social status of consumers. Primarily delivered locally, these goods and services encompass infrastructures, utilities, food, retailing and distribution, education, health and welfare. Because of this, it is thought to have considerable potential to regenerate the areas where the local economy is relatively weak – perhaps the perfect solution for the levelling up agenda?

The initial manifesto for the foundational economy from researchers at the University of Manchester resulted from dissatisfaction with generic industrial and regional policy focused on promoting competition and markets; with success measured in terms of job creation and GDP growth. According to the manifesto, the foundational economy is “the mundane production of everyday necessities” which is taken for granted by all members of the population. As such, it is often also referred to as the ‘sheltered’ or ‘invisible’ economy.

Scale and value

In providing the infrastructure for everyday life, the foundational economy is also very large. It has been noted that in all European countries, it directly employs around 40% of the workforce. In the UK, around 44% of the workforce is employed in foundational activities. In Germany, it is 41% and Italy it is 37%. The value of foundational output and volume and diversity of foundational employment is therefore much larger than in high-tech and tradeable services, with which policymakers are determinedly focused on.

Other measures of value have also been highlighted, such as household expenditure. The initial manifesto notes the importance of weekly spend on the foundational economy with nearly 30% of all household expenditure going on foundational activities.

Despite providing vital services, and employing a significant portion of the UK population, the foundational economy is marked by low-tech, low-wage, part time and often precarious employment and is potentially at risk from automation, despite the significant ‘human’ element to many of the different job roles which make up this part of the economy. Within society a lot of foundational jobs are still considered by many (often who don’t work in the sector) to be “jobs you move on from” where in reality, for many people, particularly women and migrant workers, this isn’t the case.

But where would we be without these roles providing for all citizens’ basic needs? Job creation and GDP growth may suggest a successful economy but this, it is argued, does not show the wellbeing of all society or sustainability. In the face of current, and indeed future, crises, it seems perceptions may be starting to change as more and more people become concerned with health and wellbeing and the environment. Indeed, it has long been argued that necessity is only recognised in times of crises.

Has Covid-19 shone a vital light on the foundational economy?

While many sectors were shut down due to the coronavirus pandemic, the foundational economy remained open as it was considered systemically important for meeting basic needs. The pandemic has highlighted that this part of the economy is needed at all times, including at times of crisis.

Healthcare staff have become frontline heroes and food delivery drivers are recognised as key workers. But this enhanced status has also highlighted the poor pay and conditions of many key workers delivering these essential goods and services and the inherent inequality that exists in society.

Just like other crises, from natural disasters to large scale economic shocks, these bear most heavily on the poor and vulnerable. The pandemic has shown that these inequalities must be addressed so that basic everyday services are more equally available.

The pandemic has also shown that economies are about more than market economies. It has been argued that there needs to be a move towards meeting a population’s basic needs rather than on individual consumption.

Way forward

Advocates of the foundational economy argue that public policy should focus on securing the supply of basic goods and services for all citizens in a socially responsible way.

The 2020 manifesto for the foundational economy from The Foundational Economy Collective argues for the renewal of the foundational economy with a ten-point programme, including proposals related to:

  • better health and care
  • housing and energy
  • food supply
  • social licensing
  • tax reform
  • disintermediation of investment from pension funds and insurance companies
  • shorter supply chains in foundational commodities
  • citizen engagement
  • better technical and administrative capacity at all levels of government
  • international constructive responsibility

It has been widely agreed that a return to business-as-usual approach following the pandemic is not the way forward and that there needs to be a shift in economic policies in order to achieve a more socially and economically just society. Perhaps if such policy change is achieved, a more balanced economy that provides a good quality of life for all can eventually be realised.


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The year of living differently: reviewing The Knowledge Exchange blog in 2020

2020 has been a year like no other. A microscopic virus – 10,000 times smaller than the width of a human hair – has dominated, disrupted and redefined the way we live and work.

Although the pandemic is primarily a public health emergency, its effects have been felt in all areas of public and social policy, from economic development and employment to transport and the environment. Throughout this year, our blog has reflected on the impacts of the coronavirus and the restrictions introduced to prevent its spread.

The COVID-19 knock-on

While the coronavirus pandemic has dominated the news headlines, it has also obscured the knock-on effects on the NHS. In October, we reported on the impacts of delays to preventative healthcare measures, such as screening and routine medical care in the form of pre-planned operations for long-term chronic and non-urgent conditions.

As the blog post noted, the impacts have been wide-ranging, including not only delays in care for case of physical ill health, but also for those seeking treatment for mental health conditions:

“Research suggests that incidence of mental illness during the coronavirus pandemic increased. However, the numbers of people accessing services and being referred for treatment have not increased proportionate to this.”

The ‘hidden epidemic’

Long before the coronavirus pandemic, domestic violence had become known as a ‘hidden epidemic’ in the UK. In September, our blog highlighted the unintended consequences of quarantine for domestic abuse victims.

After the UK entered lockdown in March, calls and online enquiries to the UK’s National Domestic Abuse line increased by 25%. Three-quarters of victims told a BBC investigation that lockdown had made it harder for them to escape their abusers and in many cases had intensified the abuse they received.

Despite additional government funding, the local authorities and charities which support victims of domestic violence have been struggling with the financial fallout from the pandemic. Even so,  important partnerships have been formed between local government, educational institutions and third sector bodies to provide safe spaces for women and their children fleeing violence. Among these was an initiative at the University of Cambridge:

St Catherine’s College formed a partnership with Cambridge Women’s Aid to provide over 1000 nights of secure supported accommodation during the lockdown period.

‘Same storm, different boats’

As the recent Marmot review has stressed, the coronavirus pandemic has exposed and deepened many of the deep-rooted inequalities in our society, including gender, ethnicity and income.  It has also shone a light on more recent inequalities, such as the growth of precarious employment among sections of the population.

In July, we looked at the uneven economic impact of the pandemic, focusing on the heavy price being paid by young people, women, disabled people and Black and Minority Ethnic (BAME) communities.

Women often work in the frontline of care services and have had to juggle childcare during lockdown. BAME communities are over-represented in key-worker jobs, and so were particularly vulnerable to coronavirus.

And although there has been much talk about ‘building back better’, our blog post drew attention to the observations of Dr Sally Witcher, CEO of Inclusion Scotland during a Poverty Alliance webinar:

“She asks whether indeed we should want to build back, when the old normal didn’t work for a large proportion of people, particularly those with disabilities. Dr Witcher also questions ‘who’ is doing the building, and whether the people designing this new future will have the knowledge and lived experience of what really needs to change.”

The impacts of a pandemic

Many other aspects of the impact of COVID-19 have been covered in our blog:

  • How housing providers have embraced the fluidity of an emergency situation, including tackling homelessness, engaging effectively with tenants and addressing mental ill health.
  • Digital healthcare solutions for those with coronavirus and for the continuity of care and day-to-day running of the NHS.
  • Creating and managing a COVID-secure workplace.
  • How COVID-19 is changing public transport, including an acceleration towards contactless payment and mobile ticketing.
  • The additional challenges of the pandemic facing autistic children and young people.
  • The impact of the coronavirus restrictions on the arts.
  • The role of green new deals in tackling climate change and economic inequality as part of the post-Covid recovery.

Beyond the virus

Although the pandemic has been at the forefront of all our minds this year, The Knowledge Exchange blog has also taken the time to focus on other important issues in public and social policy:

We’ve also taken advantage of the ‘new normal’ experience of remote working to join a number of webinars, and to report back on the observations and ideas emerging from them. Most recently, our blogs have focused on a series of webinars organised by Partners in Planning, which included contributions on how the planning system can help address climate change.

Final thoughts

The health, economic and social impacts of the pandemic are likely to be long-lasting – restrictions on travel, work and socialising will continue into the spring, and insolvencies and unemployment numbers are likely to rise. And the continuing uncertainty over the UK’s new trading relationship with the European Union will generate additional challenges.   

But, as a frequently difficult, often challenging and sometimes distressing year draws to a close, there is cause for optimism about 2021. Vaccines to prevent the spread of the virus have been developed with lightning speed. Across the UK people are already being vaccinated, with greater numbers set to receive the jab in the coming months.

Here at The Knowledge Exchange, we’ll continue to highlight the key issues facing public and social policy and practice as we move towards the post-Covid era.

Season’s greetings

It’s with even greater meaning than ever before that we wish all our readers a happy Christmas, and a healthy, prosperous and happy new year.

Best wishes from everyone at The Knowledge Exchange: Morwen, Christine, Heather, Donna, Rebecca, Scott, Hannah and James.


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Guest post: How working from home could revitalise rust belt cities

RMC42

Michel Serafinelli, University of Essex

For years, we have been promised a work-from-home revolution, and it seems that the pandemic has finally brought it to pass. In April this year, at the height of the first wave of coronavirus, 47% of people in the UK were working from home, the vast majority of them doing so because of the pandemic. In a sense this is overdue: the work-from-home potential for UK employees is 32%; in France, Germany and Italy between 24% and 28%.

This structural transformation has the potential to at least partially undo another transformation from the previous century. With the decline of manufacturing in the United Kingdom after the 1970s, some cities – incuding Hull, Sheffield, Bradford and Stoke-on-Trent – entered a spiral of high unemployment and out-migration that has lasted to this day. This trend is echoed in other “rust belt” cities such as Saint-Etienne in France, Wuppertal in Germany and the American city of Detroit.

The rise of teleworking could end that spiral – if the right conditions are met.

The changing workplace

It’s unlikely that telework will end when the pandemic does – we will instead probably see workplaces encouraging a mix of in-office and home working. Some organisations may start asking workers to be in the office for only two to three days per week, while others may opt for a “conference model” (that is, a few consecutive days or a week per month for all employees).

This does not mean the death of big cities. London will probably stay attractive and innovative thanks to its very strong initial advantage. San Francisco and Seattle in US, Munich in Germany and Amsterdam in the Netherlands will all remain hubs for knowledge workers. Scholars believe face-to-face still rules when it comes to creativity, and such cities provide an environment that is conducive to innovation.

But rust belt areas are cheaper and can attract skilled workers to regularly spend more time there once the pandemic is over.

A busy street in Soho, London.
London will not lose its appeal. christo mitkov christov/Shutterstock

The job multiplier effect

How can formerly deprived cities thrive after the pandemic? To understand the potential for revitalisation of rust belt cities, we can invoke the job multiplier effect. This is where the presence of skilled workers helps create other jobs through increased demand for local goods and services. For example, after their day on Zoom (at home or in a local co-working space), skilled workers will want to go out. In this way they support a barista, a waiter, a chef and perhaps a taxi driver. Some will decide to renovate the house they live in, and ask a local architect. Once or twice a week they go for yoga. They may need a dogsitter when they travel.

This is not the only mechanism that could help with local revitalisation. Some of the people regularly spending more time in rust belt areas would be entrepreneurs, and we may see new business creation, as they seize new opportunities in industries such as culture, renewable energies, tourism, quality agro-food or handicraft.

In principle, therefore, our increased ability to work from home could lead to new growth opportunities.

Will it work?

But there are important caveats. Not all rust belt cities will be able take advantage of the post-pandemic world. After all, there were large differences in labour market performance after the 1970s, when the aggregate number of manufacturing jobs started to decline.

In the UK, both Middlesborough and Slough had 44% manufacturing employment in 1970. But their experience was vastly different in the three following decades, with Middlesborough employment declining by 13% per decade and Slough employment growing by 12% per decade. Places such as Norwich and Preston in the UK, Bergamo in Italy, and San Jose in the US were traditional manufacturing hubs that nonetheless performed well in the decades that followed the start of manufacturing decline in their countries.

To understand why we may see large differences across different cities again with the rise of working from home, we first have to think about differences in what economists call human capital endowments – this relates to the skills of the workforce in a particular place. For example, if locality A has a greater share of the workforce with a university degree than locality B, it has a higher human capital endowment and is more likely to recover from industrial decline.

The skill level of the workforce is important for the task of local reinvention – in our research team’s analysis of the reinvention potential for cities, we used the share of the workforce with a university degree as a proxy for this. To distribute these advantages across the board, scholars studying declining areas have called for measures aimed at boosting training and facilitating the assimilation of knowledge and innovation.

Another important challenge is the digital divide – the gap in speeds between areas with privileged access to the internet and the rest of the country. In the UK this is more than just a gap between urban and rural parts of the country – inner-city areas in London, Manchester, Liverpool and Birmingham are also left behind. A large reduction of this gap was important for job creation before COVID-19 – it should be a top priority now.

An overhead shot of a woman typing on a laptop at a table.
The UK’s digital divide affects cities too. marvent/Shutterstock

Local amenities also play a role. For skilled workers with family ties in a specific area, once they decide to regularly spend more time outside London, the choice of location is often pretty clear. For skilled workers without such ties, factors such as the cultural and recreational activities on offer in a new city become important, especially since they are used to a vibrant selection in London.

Overall, rust belt areas in Western economies face some opportunities for regeneration with teleworking, but there are also several important challenges. To maximise the potential for success, governments should consider measures that boost training, investment in high-speed broadband and improve transportation links between these cities and London.

These kinds of investments would help smaller cities such as Middlesborough, Hull and Stoke-on-Trent take advantage of the new opportunities presented by telework. Otherwise Manchester and, to some extent, other larger cities such as Birmingham and Liverpool could be the winners, among the rust belt, in the post-coronavirus work-from-home economy.

Michel Serafinelli, Lecturer in Economics, University of Essex

This article is republished from The Conversation under a Creative Commons license. Read the original article.


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Counting down the hours: could a shorter working week raise productivity and improve our mental health?

In 1930, the influential British economist John Maynard Keynes predicted that within 100 years the working week would have shrunk to 15 hours. He believed that as living standards rose people would choose to have more leisure time as their material needs were satisfied.

For a time, it looked as if Keynes might be right. In the post-war period, average working hours continued falling, and analysis by the New Economics Foundation has suggested that if this trend had continued we would currently have an average working week of around 34 hours.

But in the 1980s, labour market deregulation, reduced collective bargaining, and slower growth in pay for low income workers put the brakes on working time reductions.

In the UK, 74% of the workforce work an average of 42.5 hours a week. That’s longer than in any EU country, apart from Greece and Austria.

The benefits of a shorter working week

In recent years, the twin challenges of climate change and automation of jobs, along with growing concerns about mental health and work/life balance, have prompted a rethink on working hours.

For some, a shorter working week means compressing forty working hours into four days instead of five.  Others argue that a truly progressive four-day week involves fewer hours at work, with no reduction in pay.

While many employers may recoil at the prospect of paying the same wage for fewer hours, a growing body of evidence presents some strong arguments in favour of this approach:

  • Studies of working hours reductions have demonstrated increases in productivity over four days to compensate for the loss of the fifth working day.
  • Employees with reduced hours spend less time on inefficient tasks, such as meetings.
  • Fewer hours can mean less stress, greater work-life balance and increased motivation.
  • A 2020 study by Autonomy found that a four day working week could potentially reduce energy consumption for the extra non-working day by 10% and emissions intensity by 15%.
  • A shorter working week could have positive effects on gender equality.
  • Maintenance costs can be reduced if all employees are out of the office for an additional day each week.

The four-day week in practice: lessons from New Zealand

In May, New Zealand’s prime minister, Jacinda Ardern encouraged employers to consider the four-day working week as one of the ways the country’s economy could be rebuilt following the Covid-19 pandemic. She suggested that reductions in working hours could boost productivity and domestic tourism and improve work/life balance.

In fact, one New Zealand firm has already demonstrated the positive effects of a shorter working week. In March 2018, financial services company Perpetual Guardian began a two-month trial in which its 240 staff worked four eight-hour days, but got paid for five. The experiment was monitored by academics at the University of Auckland and Auckland University of Technology.

The findings from the trial showed that supervisors were able to maintain performance levels, and most teams recorded a marginal increase. Meanwhile, employees reported improved job satisfaction and a better work/life balance. In addition, many employees expressed a sense of greater empowerment in their work because of the planning discussions that preceded the trial. The success of the trial has now resulted in the four-day week being adopted as company policy at Perpetual Guardian.

The cost of cutting hours

Another working hours trial, in Gothenburg, Sweden, involved nurses in a care home being offered the chance to work six-hour shifts instead of eight, on full pay. While the trial resulted in improvements in staff satisfaction, health and patient care, the city had to employ an extra 17 staff, costing £1.4m. Critics of the scheme said the need to pump additional taxpayers’ money into the trial proved that it was not economically sustainable.

Cost is a potential stumbling block to further working hours reductions. A 2019 report from the Centre for Policy Studies (CPS) estimated that the cost to the UK public sector of moving to a four-day week would be £45 billion if attempted immediately, or £17 billion assuming generous productivity gains from shorter hours. The authors argued that such costs would require spending cuts in public services or substantial tax rises.

However, the Autonomy think tank has put the net cost of a 32-hour week at no more than £5.4 billion. Autonomy has also pointed to improvements in job quality for millions of public sector staff, the creation of 500,000 new jobs and reductions in the sector’s carbon footprint as potential benefits of shorter hours.

Burnout or rethink?

In October 2020, the 4 Day Week Campaign, Autonomy and Compass published Burnout Britain, looking at the impact of longer working hours. The report noted that over the past three years the length of the working day has increased steadily, resulting in a 49% rise in mental distress reported by employees. Women are experiencing particular pressures, with 43% more likely to have increased their hours during the Covid-19 crisis.

The report warned that beyond the coronavirus pandemic, the UK faces another serious public health emergency:

“…as well as an impending recession and mass unemployment, we are heading into an unprecedented mental health crisis”

The existing evidence suggests there’s a strong case to be made for reductions in working hours. Apart from the potential productivity gains and improvements in the quality of life, there are savings to be made in the costs of treating mental ill health caused by overwork.

Even so, government and employers will require further proof of the tangible benefits of a shorter working week before committing to permanent changes.

Crisis often accelerates change, and the Covid-19 pandemic has injected new urgency into the debate. Remote working, restrictions in the workplace and the threat of mass unemployment have demonstrated the need to reconsider the old rules that only months ago seemed set in stone.

We are still a long way from Keynes’ vision of a 15-hour week. But 2020 has shown that shining a light on previously unthinkable alternatives to our current ways of working is not only possible, but essential.


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Build back better: is now the time for Green New Deals? – Part 2

A window of opportunity

In policymaking, there is a concept known as the “Overton Window”, which describes the range of policies that politicians can propose without being considered too extreme by the population at large. This window of opportunity can be shifted and can allow for policies that in the past may have been considered unthinkable and radical to become mainstream and even sensible.

The impact of Covid-19 and the public health measures that have been required to suppress the virus, have undoubtedly resulted in a shift in the “Overton Window”. Policy interventions, such as the Job Retention Scheme and national lockdown, which involved massive amounts of government spending and restrictions to every aspect of our day-to-day lives, suddenly became normal and were largely approved of by the public.

In these circumstances, the concept of the Green New Deal, a policy package which involves large amounts of government spending, designed to create green jobs, develop green infrastructure and modernise the economy, may no longer be such an unfeasible idea.

Build back better: a green recovery

The economic impact of Covid-19 is expected to result in a 5.2% contraction of global GDP, amounting to the deepest global depression since 1945. In order to recover from this contraction, governments are formulating unprecedentedly large economic stimulus packages, designed to mitigate the economic and social damage created by the pandemic. Already there are numerous examples of governments utilising aspects of the Green New Deal within their economic recovery plans.

European Union

Next Generation EU – A European Green Deal

Prior to the Coronavirus pandemic, the European Commission was already working on creating a European Green Deal, which would support the EU transition to climate neutrality by 2050. After the onset of the pandemic, the European Commission moved to position the Green Deal as a key pillar of the EU’s €750 billion recovery package, known as Next Generation EU. 25% of the recovery package has been dedicated to funding climate action, whilst the entire package features a commitment that any money spent as part of the EU’s economic recovery must “do no harm” to the EU’s climate neutrality goal. The recovery package includes policies that are similar in nature to other Green Deals, including:

  • a €40 billion ‘Just Transition Fund’, to alleviate the socio-economic impacts of the green transition and diversify economic activity;
  • a €91 billion a year fund to improve home energy efficiency and develop low carbon heating;
  • the introduction of an EU-wide border tax on carbon-intensive industrial imports with the potential to raise €14 billion.

French Government

France Relaunch

The French government’s recently announced €100 billion stimulus package, includes a €30 billion package of measures designed to aid France’s transition to carbon neutrality. The measures set out within the package incorporate core elements from Green New Deals, such as developing cleaner forms of transport and improving the energy efficiency of buildings. The package includes the following green measures:

  • a €11 billion investment in developing and encouraging the use of green transport methods, nearly €5 billion of which will be used to upgrade rail lines to encourage freight traffic from road to rail;
  • a €6 billion investment to help improve the energy efficiency of homes and other buildings;
  • A €2 billion investment to help develop the hydrogen sector.

Scottish Government

Protecting Scotland, Renewing Scotland

Within this year’s Scottish Government Programme, it is evident from the first page that it views the need for economic recovery as an opportunity to create a  “fairer, greener and wealthier country”. The programme explicitly describes the measures contained as “the next tranche of our Green New Deal” and borrows extensively from existing Green New Deals, with policies including:

  • a £100 million green Job Creation Fund;
  • a £1.6 billion investment to decarbonise the heating of homes and other buildings;
  • a £62 million Energy Transition Fund to support businesses in the oil, gas and energy sectors over the next five years to grow and diversify;
  • capitalisation of the Scottish National Investment Bank with £2 billion over ten years, with a primary mission to support the transition to net zero emissions.

UK Government

A Plan for Jobs

A key element of the UK Government’s plans to support and develop the labour market is the creation of green jobs, through investment in infrastructure, decarbonisation and maintenance projects. Improving the energy efficiency of buildings is a principle which is at the core of the Green New Deal. The Plan for Jobs includes similar proposals, such as:

  • a £2 billion Green Homes Grant scheme that will provide homeowners and landlords with vouchers to spend on improving the energy efficiency of homes across the UK;
  • a £1 billion Public Sector Decarbonisation Scheme that will offer grants to public sector bodies, including schools and hospitals, to fund both energy efficiency and low carbon heat upgrades;
  • a £40 million Green Jobs Challenge Fund for environmental charities and public authorities to create and protect 5,000 jobs in England.

Final thoughts

The concept of the Green New Deal is one that appears to evolve and shift as time goes on. This is unfortunately to be expected as time runs out for governments to take meaningful action to avert rising global temperatures. The transition to carbon neutrality is one that will undoubtedly result in massive changes to almost every aspect of our day-to-day lives, and therefore it is not surprising that the journey to reach this point may require bold and unprecedented action.

However, prior to the Coronavirus pandemic, it would have been unimaginable to consider the levels of spending and intervention that governments would be required to take in order to implement a Green New Deal. The shift to carbon neutrality involves a complete reimagining of the economy and requires a great deal of public support, in particular when the energy transition may threaten the jobs of those who work in carbon-intensive industries.

In a post-Covid era, the concept of governments spending huge sums of money and making unprecedented interventions is now our everyday reality. The economic consequences of the pandemic will require an extraordinary response to ensure that its legacy is not one of increasing levels of unemployment, inequality and stagnation. In this new world, the ambition and wide-ranging nature of the Green New Deal may no longer be seen as unfeasible. In fact, as can be seen in the UK and Europe, governments are already looking to implement various elements of the Green New Deal as part of their economic recovery packages. Perhaps the Green New Deal is about to have its time.


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Part one of this blog post was published on Monday 14 September.

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Build back better: is now the time for Green New Deals? – Part 1

From the signing of the Paris Climate Agreement to the pressure placed on governments by worldwide school strikes, the issue of climate change and its effects on the world around us has increasingly risen to the top of the political agenda. Across the world, governments have begun to take various forms of action in an attempt to prevent further rises in global temperatures.

In particular, the concept of a package of measures designed to address climate change and economic inequality, known as the Green New Deal, has gained particular prominence in the past few years.

This two-part blog looks at the concept of the Green New Deal, how it has influenced global policy and its relevance as a means of economic recovery in a post-Covid world.

What is the Green New Deal?

The original concept of a Green New Deal was proposed in a report published by the New Economics Foundation in 2008. The report set out a range of policy proposals that would allow the UK to recover from the global financial crisis, whilst tackling the threat posed by climate change. The scale and ambition of the Green New Deal was largely inspired by the wide-ranging New Deal package of reforms and investment carried out by President Roosevelt, that enabled the United States to recover from the Great Depression.

In a similar vein, the report made recommendations that addressed a wide range of policy areas,  these included:

  • a £50 billion per year programme to create a low-carbon energy system that will involve making “every building a power station” by maximising energy efficiency and renewable energy generation;
  • creating and training a “carbon army” of workers to provide the human resources required for a vast environmental restructuring programme;
  • re-regulating the domestic financial system to ensure that the creation of money at low rates of interest is consistent with democratic aims, financial stability, social justice and environmental sustainability;
  • minimising corporate tax evasion by clamping down on tax havens and corporate financial reporting.

Green New Deal: 2.0

Over time the Green New Deal has evolved and has spread internationally. Following the 2018 US Elections, the concept gained increasing prominence in the United States. Advanced by newly elected Congresswoman Alexandria Ocasio-Cortez and Senator Ed Markey, the Green New Deal set out a vision for the United States to transition to become carbon neutral in just ten years.

In a similar vein to the ambition of both the New Deal and the original Green New Deal, the package proposed included a variety of measures that crossed a range of policy areas, including:

  • meeting 100% of the power demand in the United States through clean, renewable, and zero-emission energy sources;
  • upgrading all existing buildings in the United States and building new buildings to achieve maximal energy efficiency, water efficiency, safety, affordability, comfort, and durability, including through electrification;
  • providing all people of the United States with high-quality health care; affordable, safe, and adequate housing; economic security; and access to clean water, clean air, healthy and affordable food, and nature;
  • guaranteeing a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States.

Criticism of Green New Deals

The concept of the Green New Deal is often criticised for being too expensive to be implemented. Opponents of the US Green New Deal believe the timeline for the United States to become carbon neutral in just ten years is unrealistic, and the estimated cost of  $12.3 trillion is too high. Critics also argue that the proposals are too vague and often fail to consider the seismic changes the measures may have on wider society, particularly for those who work in industries directly impacted by the energy transition.

In short, critics of a Green New Deal believe that as a package it is simply too large, both in ambition and price, to be implemented successfully. The level of government action required to implement such wide-scale reform would be unprecedented in peacetime and could potentially require citizens to make substantial changes to the way they live their lives. Until wider society is willing to accept a substantial increase in government spending and changes to their way of life, it is unlikely that a Green New Deal will be able to be effectively implemented.


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Connecting the future: what is 5G?

By Scott Faulds

Over the years, as technology has evolved, the way in which we all use and access the internet has changed dramatically. The devices that can access the internet have shrunk and become portable, from laptops that allow us to work anywhere to smartwatches that we can use to play music from our wrists.

At the same time, as more devices have gained the ability to easily connect to the internet, our usage has changed massively; we now consume a great deal of audio and video online. This has become even more apparent during the Covid-19 pandemic, with many of us turning to video conferencing tools to work from home and keep in contact with our friends and family.

Additionally, in recent years, we have begun to see our homes, cars and cities become ‘smart’ via the power of the internet, enabling a whole new generation of devices that can connect and exchange data.

In response to changes in the way we all use and access the internet, the mobile network infrastructure has evolved to allow for greater bandwidths, lower latency and ultimately faster connection speeds. The next generation of mobile network technology – known as 5G – will facilitate new data-driven technologies, such as, automation, self-driving cars and artificial intelligence.

What is 5G?

5G is the next generation of mobile internet technology, which operates across a broad spectrum of radio waves that will allow for faster, always-on access to the internet. It’s estimated that 5G will enable internet speeds up to 600 times faster than those experienced on 4G networks today. This would allow you, for example, to download an ultra-high-definition movie in 25 seconds. The ability to transfer data at these speeds allows for technologies, such as artificial intelligence and autonomous vehicles, to operate effectively. Some experts claim 5G could lead to a new era of productivity and growth.

However, the physical infrastructure required to build a 5G network can be difficult to deploy. The fast speeds achieved by 5G networks rely upon what is known as millimetre waves, which operate at a higher frequency than our current mobile networks. These waves have a shorter range and can be easily disrupted by obstacles, such as buildings, people and even rainfall. Therefore, to ensure network reliability, a 5G network will have to operate across low, medium and high frequencies. Each of these frequencies will require separate network infrastructure and will have various trade-offs, in terms of speed and service area.

As a result of the distance and obstacle limitations of 5G, there will be a need for a dramatic increase in the amount of physical infrastructure required to ensure reliable service, particularly in built-up urban environments. According to a recent report by McKinsey, a 5G network will require 15 to 20 network access points per square kilometre in densely populated areas, compared with 2 to 5 network access points required for existing mobile networks. Subsequently, the cost involved with establishing this new infrastructure ensures that in the short-term, we are unlikely to see the launch of nationwide 5G coverage anytime soon.  

The power of data

The ability to exchange large amounts of data at speed can have a significant positive effect on our economy. Research from Barclays, indicates that the deployment of 5G has the potential to increase annual UK business revenues by up to £15.7 billion by 2025. Additionally, the ability to exchange data at speed opens up new opportunities for us to improve the efficiency of the operation of our cities.

The advent of the smart city, where everything from streetlights to trains can communicate with each other, can only truly come to fruition when combined with the data speeds facilitated by 5G networks. The main benefit of establishing a fully-fledged smart city is the ability for cities to become sustainably more efficient, through the extrapolation and analysis of data. For a smart city to be at its most efficient, the collection and analysis of this data will have to occur in almost real-time and will rely heavily on artificial intelligence and automation. 

A study conducted by Massachusetts Institute of Technology (MIT) found that in New York City congestion could be reduced by up to 75% through the deployment of a ride-sharing algorithm built using real-time data generated by taxis and incoming requests. The system would allow drivers to work shorter shifts, create less traffic, reduce air pollution and shorten commutes (with an average wait time of 2.7 minutes).

The creation of smart cities, underpinned by 5G, could potentially allow us all to live in cities which are more efficient and responsive to changes in our behaviour. Analysis conducted by Cisco, has revealed that the efficiencies generated by smart city technology could result in cost savings of up to $2.3 trillion globally.

Therefore, it could be said that 5G technology has the potential to allow businesses and governments to make costs savings and generate new forms of revenue.

Final thoughts

The deployment of 5G networks will provide the base for the technology of the future to operate and enable innovation to thrive. It is likely that the speeds and reliability offered by a fully-fledged 5G network could generate economic benefits and allow governments to make cost savings by leveraging big data to make our cities operate in a more efficient manner.

However, the deployment of 5G will be a complex and potentially costly undertaking, and it will be a long time before we see the establishment of nationwide 5G coverage. Therefore, although there is a wide range of benefits associated with the establishment of a 5G network, it should not be seen as a silver bullet that will generate instantaneous economic benefits.

Ironically, the future of high-speed internet, will take time and will require a great deal of investment before the benefits are realised.


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