London’s city centre has lost billions in revenue due to the coronavirus pandemic, a new report has revealed, leading Sadiq Khan, Mayor of London, to call for more devolved budget responsibilities to ensure a swift recovery.
Working from home, restrictions on nightlife, hospitality, shopping and culture meant that visitors and commuters to the British capital spent up to €14.6 billion (£12.8 billion) less in 2020 than in the 2019.
According to the report, commissioned by Mayor Khan, the collapse of tourism left a particularly large shortfall, with a €8.45 billion (£7.4 billion) difference pre- and post-pandemic. Domestic tourists will have spent £3.5 billion less, and commuters £1.9 billion less than in the previous year.
The arts and culture sector has been particularly hard-hit by public health measures, losing 97% of its output last year. This could mean some 26,000 jobs are now at risk.
Sadiq Khan, Mayor of London said: “Central London’s mix of shops, restaurants, nightlife, museums and galleries is one of the city’s unique selling points and attracts millions of tourists every year. But COVID has had a devastating impact on central London’s economy, with retail, hospitality, culture and night time industries bearing the brunt.”
The research shows that workers and tourists may give the city centre a boost once restrictions are relaxed and the effect of the UK’s vaccine roll-out takes hold but warns that many venues or shops may have permanently closed by then.
London is a major contributor to the overall UK economy, accounting for a quarter of the country’s total economic output. That’s why Mayor Khan is calling on the UK central government to enact measures to ensure London’s future economic success, including reforms to business rates and long-term restructuring such as devolving power and accountability for raising the taxes needed to provide local services.
“When London thrives, the whole country thrives, so supporting our city’s businesses to survive the coming months will be absolutely vital,” the Mayor said.
What’s more, the Greater London Authority has outlined a recovery plan that includes schemes such as a ‘Green New Deal’ for London.
The mission-based approach was presented by the Greater London Authority’s Senior Manager of economic strategy, innovation and industrial policy, Catherine Glossop, at Eurocities’ City Dialogue on the pandemic recovery in November.
The final report will be published in the Spring with further policy recommendations.