Central London plays many simultaneous roles in the city, and matters to a wide range of different user groups. It is a home for thousands of Londoners, a workplace for many more, and a national and international tourist destination. Central London also hosts world-class clusters of business specialisms across a wide range of sectors; thriving retail districts; numerous national cultural and tourist attractions; heritage sites and bustling nightlife hotspots; world-renowned universities; parks and green spaces; national and city-wide government; and the monarchy.
This incredible diversity of function is what makes London’s city centre so successful and special. Its economic role is multifaceted and its attractions are numerous. The district’s clusters of innovation and highly productive economic activity are hugely important to both national and citywide economies. Both nation and city are governed primarily from central London, making it a centre for moments of national unity as well as protest and disorder. Much of national and international importance occurs here, and yet for many it is simply home.
Balancing the needs of these various user groups with the international, national and local roles of central London is essential. However, as these interests are sometimes complementary and sometimes clashing, this is often a challenge. This report looks at the recent past, current trends, and likely future of London’s city centre, and asks what should be done to ensure that this vital district not only survives, but thrives.
Defining central London
Defining London’s city centre is difficult. Unlike some world cities, London remains primarily the result of thousands of years of often unplanned growth. It does not have a disciplined grid structure, or particularly organised zones of activity. There are surely as many different views on what constitutes “central London” as there are residents and visitors to the district: is it London Underground Zone 1? The West End and the City? Or the area within a specific distance of the statue of Charles I at Charing Cross – the historic “centre of London”?
The Central Activities Zone (CAZ) as defined in the London Plan – alongside its “satellite” at the northern part of the Isle of Dogs (NIoD) – has been chosen as the focus of this report, though many of its findings will apply equally to other conceptions of “central London”. Pictured in Figure 1, its asymmetric, messy shape represents an attempt to draw a line around the part of the city centre that houses London’s strategic functions (including its central business districts) and various institutions, organisations and attractions of national significance. Its boundaries are imperfect and porous, with CAZ-like activity found in smaller clusters elsewhere nearby and across London, and it contains many localities of extremely varying character and purpose within it. The most recent draft London Plan even identified Stratford and Old Oak Park Royal as potential “reserve locations for CAZ functions.” That said, the CAZ/NIoD have remained the focus of business growth (as policy intends), and its diverse places share a balance between commercial and residential uses that distinguishes them from the rest of the capital.
Ten London local authorities include a part of the CAZ/NIoD. The City of London is alone in being entirely contained within the CAZ/NIoD; the other boroughs contain areas outside the district, and in many cases, these areas are extremely different to the part of the borough that lies within the CAZ/NIoD. For example, Camden’s portion of the CAZ contains King’s Cross and parts of the West End, but the borough also comprises Hampstead and Highgate; similarly, the borough of Southwark covers London Bridge and Elephant & Castle, but also includes Dulwich Village and Peckham Rye. On occasions where data is available only at a borough-wide level, this report will refer to these boroughs as the “CAZ10”. “Central London” is sometimes used to make wider observations about the area without drawing a precise boundary.
As recently as the 1980s, the population of London’s city centre was in decline. 3 Today, however, its population is growing once again, alongside a strong economy, and substantial redevelopments are underway from King’s Cross to Nine Elms. London’s population growth is putting increasing pressure on housing, and the citywide challenge of ensuring affordability is particularly acute in the city centre. More and more people are working in central London, with an evolving mix of specialisms and workspaces. Crossrail is set to dramatically increase transport capacity but the status of Crossrail 2 remains uncertain, and more tourists are expected in the coming years.
The district has managed to adapt to major shifts in use at several stages in its history. But central London’s past resilience does not automatically guarantee its continued adaptability to technologically driven changes such as the automation of city centre jobs and the advent of short-term residential lettings. The sectoral makeup and scale of businesses in the district are changing, with a related transformation of office space; and land in the city centre remains both precious and finite.
Despite the number of employees greatly outstripping the number of residents in the Central Activities Zone and the Northern Isle of Dogs (CAZ/NIoD), central London retains an impressive mix of uses. There is a widespread consensus that a city centre that balances the interests and needs of residents, businesses and visitors is desirable. Research by Arup has highlighted the importance of the “stewardship role” played by local residents in ensuring thriving commercial and retail districts in successful city centres around the world. 4
But at a time when much of central London’s built environment requires renewal, trust between residents and developers appears at an all-time low, and residents often tend to view the impacts of new development negatively. 5 Yet limited supply against a backdrop of rising demand is pushing up property prices and living costs for residents, and the cost of doing business in central London for employers remains high. There is a need to grow and a need to adapt. Whilst there are many areas in which the interests of residents, business and visitors align, clashes persist, and cohabitation requires delicate management.
Central London is the engine that powers the city’s economy. In 2016, the Greater London Authority (GLA) found that the CAZ was home to over one-third of London’s jobs, and responsible for 10 per cent of the UK’s economic output. 6 The latest available figures indicate that the CAZ and NIoD host over two million jobs, 40 per cent of London’s total employment, 7 and a quarter of the capital’s businesses. 8
Although the CAZ and NIoD covers just 2.19 per cent of Greater London’s total land area (or 0.014 per cent of the total UK), this geographically tiny area punches significantly above its weight in economic terms. Its contribution to the national and citywide economy is hugely outsized. This amounts to roughly seven per cent of the UK’s total jobs and five per cent of the nation’s total business units. The CAZ10 boroughs are also outperforming their counterparts: output per head began to pull away from the London average in the mid-2000s, and their share of London’s GVA has been gradually increasing throughout this century, as Figures 3 and 4 show.
But the “centre of the centre” is even more impressive. The CAZ and NIoD are responsible for 45 per cent of London’s total GVA. If a one km fringe around both areas is included, this figure rises to over 52 per cent. 9 This demonstrates the porous nature of the CAZ/NIoD boundaries, with some economic activity spilling out to their fringes. However, this should be kept in perspective. The “fringe” area adds relatively little to the district’s share of London’s GVA – despite covering a larger geographical area – but includes more than twice as many residents. 10
London performs roles as a world city that cannot be undertaken readily in other parts of the country; roles that are disproportionately carried out in the city’s centre. Furthermore, in performing those roles, the capital aids and strengthens the wider economy of the country; ensuring that investment, head offices and wealth generation take place in the UK, that would otherwise end up in other world cities. 11
Central London’s success is thus vital to the future prosperity of the nation as a whole. However, there are concerns that “levelling up” may come at the expense of investment in the capital. 12 Progress on devolution has been limited to date, constraining London’s capacity to mitigate the challenges that come with its successes. Central London has declined before: in a time of technological and political change, continued success cannot be taken for granted.
A place to live and visit
Central London is home to a significant number of Londoners. Whilst the CAZ and NIoD combined contained just over a quarter of a million residents at the time of the last census, 13 the CAZ10 boroughs are home to nearly 10 times as many Londoners. 14 The number of central London residents also appears to be rapidly increasing: the GLA’s LSOA-level mid-year estimates suggest that by 2018 as many as 330,000 people lived in the CAZ/NIoD, an increase of nearly 30 per cent in just seven years. 15
Life is constantly on the move in central London. Each day, the capital “inhales”, drawing in commuters, tourists, shoppers and other visitors from across the city and beyond. In 2011, the daytime workday population of the CAZ10 boroughs was estimated at 3.3 million – equivalent to an increase of 50 per cent on the district’s residential population. 16 The GLA’s updated 2014 estimates suggested a daytime population of 4.2 million, 80 per cent more than the residential population. This includes over half a million overseas and domestic tourists and 1.25 million commuters. 17 Analysis by Arup suggests that the opening of two new Crossrail stations (Tottenham Court Road and Bond Street) could support at least 80,000 additional commuters travelling to the West End, and the introduction of Crossrail 2 would bring this figure to 120,000. 18
Tourist numbers are also predicted to increase significantly, with 2016’s 31.2 million overseas and domestic visitors predicted to increase to 40.4 million by 2025. 19 And just three central London local authorities (City of London, City of Westminster, and Kensington & Chelsea) are responsible for more than three-quarters of London’s tourist spending. 20 The number of retail jobs – one measure of the strength of the sector’s performance – increased by 16 per cent across the Greater London region from 2011-18, bucking the national trend. 21 A record-breaking 57 international brands opened their first ever London site in 2019, beating the previous year’s 55, itself a new peak. 22
Visits to central London are far from limited to the daytime. Three-quarters of night-time visitors to the capital head to central London, and journeys in and out of the city centre make up a higher percentage of London’s total journeys at night than they do by day. 23 Alongside this growth in both jobs and residents, it seems highly likely that the number of people regularly visiting central London will continue to increase.
The sheer scale of central London’s economic activity makes it different from the rest of the city, as the comparison in Figure 5 between the number of businesses and the number of households in 2016 demonstrates.
The CAZ/NIoD has seen significant employment growth in recent years, but has experienced an even steeper rise in its residential population. Employment in the CAZ/NIoD grew by an average of two per cent per year between 2011 and 2018, 24 but the area’s residential population grew by an average of four per cent annually over the same period. 25
Despite this growth, the CAZ/NIoD remains a mainly commercial district, home to six times as many jobs as residents (see Figure 6). This district, however, sits within and is governed primarily by the CAZ10 boroughs, which are on the whole much more residential entities.
The London Plan underlines the special nature of the CAZ and NIoD, defining them as locations where office functions should be “supported and enhanced” and strategic functions “promoted and enhanced”. By way of contrast, “locally oriented uses” such as housing and social infrastructure should be “conserved”. However, at a time when some world cities are seeing a hollowing out of their centres, 26 central London’s residential population has been growing at twice the rate of the area’s employment, driven by a revival of interest in mixed-use and city-centre living from both policymakers and citizens.
Who’s in charge?
Like its built form, London’s governance has accumulated in layers over the years rather than being planned as a unitary whole. As a result, governance is complex and arguably convoluted – especially so in the case of central London.
The CAZ/NIoD contains parts of 10 separate boroughs, each of which delivers local services and sets its own planning policies. The potential for policy divergence between boroughs in such an economically important district led to proposals for one large “Central London” borough in the early 1960s, but the use of boroughs merged from the pre-1965 metropolitan boroughs was preferred. Related proposals to make the citywide Greater London Council the sole planning authority for a small central area were endorsed by professional bodies such as RIBA and the TPI, as well as Conservative MP Sir Hugh Lucas-Tooth, Liberal MP Eric Lubbock, and several members of the House of Lords. Yet they too were ultimately rejected in favour of the principle that the boroughs should be the primary unit of local government for London. 27
Without an amalgamated, single central London borough, it has been left to the boroughs to coordinate their activities and policies amongst themselves. Central London Forward (CLF), established in 2007, is a voluntary grouping of self-defining “central London” local authorities, made up of the CAZ10 boroughs and the two associate member boroughs of Haringey and Lewisham. Its purpose is to provide a collective voice for these boroughs and their residents. 28 Central London Forward was preceded by Central London Partnership, which brought eight boroughs (the CAZ10, minus Hackney and Tower Hamlets) together with citywide public bodies and private enterprises prior to 2007.
Despite steps towards joint working across a range of policy areas, each borough’s policies and overall direction can still differ substantially from others. For example, Westminster’s City Plan 2019-2040 states that “Westminster is not generally suitable for tall buildings”, 29 yet Tower Hamlets has 84 new tall buildings in the “pipeline”, the most of any London borough. 30 Westminster’s City Plan 2019-2040 has also set higher housing targets than the GLA’s citywide London Plan. 31 As Professor Tony Travers has observed, neighbouring boroughs can have very different approaches to the provision of car parking spaces in new developments, or levels of new housing completion. Hanging baskets in Westminster’s part of Fitzrovia, but not Camden’s, are perhaps a trivial but nonetheless visible sign of borough divergence. 32 And developers, employers and Business Improvement Districts (BIDs) report varying experiences of working with the different boroughs, with good relations often down to productive personal relationships with individual councillorsor officials. 33
The GLA was established in 2000 and sets London’s strategic planning policy through the London Plan. Through Transport for London, it also manages the capital’s public transport services, as well as many of its roads. This has added another tier of governance – albeit one that has largely drawn powers down from Whitehall.
Nonetheless, central government remains directly involved in many aspects of central London life, from the NHS and education to skills policy and the welfare system. In recent years BIDs, elected and funded primarily by local employers of a certain size, have acted as a voice and service provider for business districts. 16 of these BIDs cover land inside the CAZ/NIoD. 34 Some produce their own strategy documents, and they can play a role in driving forward infrastructure and public realm projects. As business-led organisations, BIDs go some way towards allowing local employers a say in how central London develops.
The distinct electoral system of the City of London, where the disparity between the number of jobs and residents is particularly acute, also addresses this issue directly. With over 60 times more daily commuters than residents, 35 the City allows employers to nominate voters to vote on their behalf alongside the area’s residents (according to the number of people employed). However, this is the exception amongst London local authorities rather than the rule.
There are also increasing numbers of Neighbourhood Planning areas across central London that attempt to give local residents a greater say. 36 Some of central London’s landowners (including “the great estates”) also produce their own “visions” and plans. 37 In 2013, the West End Partnership was established to provide strategic oversight for the West End, bringing together interested parties from the public and private sectors alongside academics and representatives of local residents’ groups. Across a wider geographical area, Cross River Partnership is a voluntary organisation of bodies from across central London that has worked to improve the district on a project-by-project basis for 25 years.
Within this complex matrix of organisations and partnerships, there is no dedicated strategic body for the CAZ/NIoD alone. The system still allows for great diversity between boroughs, even within the CAZ. This can be a strength – but it also creates the potential for divergence and even conflict across boundaries.