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Publication type: General
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Contents
Overview
The Central Activities Zone (CAZ) plays a crucial role in the capital, and makes an out-sized contribution to the UK economy. In 2020, there were around 2.2 million jobs based in the CAZ, equivalent to 6.4% of employment in the UK. The number of jobs had increased by almost a third (29.7%) in the previous decade, almost double the rate for the rest of the capital and three times the rate of the rest of the UK. The CAZ has exceptionally high levels of productivity and higher levels of pay on average than the rest of the capital and the UK.
But the CAZ was hard-hit by the pandemic characterised by a reduction in office workers, a sharp halt to domestic and international tourism, and changes to how Londoners spend their leisure time. Like the rest of London, the CAZ is bouncing back, but in many ways the recovery is slower than the rest of the capital, it faces ongoing headwinds, and there are new threats including the energy and cost of living crisis.
CAZ Futures Action Plan
In November 2022, the GLA, Central London Forward and six central London local authorities that cover the vast majority of the CAZ – Camden, City of London, RBKC, Southwark, Tower Hamlets, and Westminster – published a joint Action Plan setting out what we can collectively do to drive the recovery and evolution of the CAZ post pandemic. The plan includes:
- A shared vision for the future of the CAZ.
- The actions that London government (local authorities and GLA) will take to deliver on this. vision
- The policy asks of central government to unlock the recovery of the CAZ.
CAZ Economic Futures Research
The Interim Report, published in February 2021, shows that the impact of the pandemic has been profound. Many businesses and jobs are facing enormous challenges due to the growth in home working, need to socially distance, unprecedented restrictions on hospitality and cultural venues and events, and the collapse in tourism. London’s arts and cultural sectors, including our Night Time Economy, are, particularly at risk.
In the long term, however, the report concludes that, if the right action is taken, central London’s will be well placed to recover strongly. Our diverse ecosystem with a unique combination of business, retail, culture, government, education and other anchor institutions will continue to be the beating heart of London’s and the UK economy.
Phase 2 of the work builds three scenarios to test the scale of the economic impact on the CAZ over the medium and long-term and provides suggested policy responses.
The Phase 2 Report, published in March 2021, shows that the central London ecosystem is well placed to recover strongly, with world-leading sectors such as tech and its arts and cultural offer. But if home working remains the norm for office workers and no further action is taken, the report estimates significant economic impacts, including job losses in central London by 2031, particularly in retail, hospitality and culture and a decline in economic output compared to a No-COVID-19 scenario. If London’s Central Activities Zone (CAZ) can be re-invented, with more opportunities for increasing the residential population and increasing its attractiveness to visitors, the report concludes that the economic impact of more home working will be far less severe.