West London Economic Assessment A baseline analysis of the West London economy An Executive Summary
PBA were commissioned in October 2015 to complete an economic assessment of West London to refresh the existing West London Vision for Growth and inform strategic planning and prioritisation of interventions by the new West London Economic Prosperity Board. This study provides a local economic assessment for West London. The question is what do West London s stakeholders need to know about current and likely future conditions to secure prosperity through the West London Vision for Growth 2
Brent Hounslow Hillingdon Ealing Barnet Harrow H&F Brent Hounslow Hillingdon Ealing Barnet Harrow H&F Executive summary We started by identifying risks for West London. The first risk identified was that West London could become a victim of its own success, and be overwhelmed by the external costs of growth though impacts on the housing and business costs, environmental degradation. Secondly, West London could fail to respond flexibly to economic change. And thirdly, that inequalities and social exclusion could rise unacceptably. We think that there is every prospect that West London could develop an approach which is intended to manage and reduce these risks to secure long-term prosperity. Indeed, many of the elements of this approach are already in place. 25 House price affordability ratio, 2014 Flats only All properties average 20 15 10 5 0 23.8 19.4 17.0 14.6 16.2 14.5 14.1 12.2 10.9 9.9 10.7 9.4 8.1 7.0 LB Barnet LB Brent LB Ealing LB H&F LB Harrow LB Hillingdon LB Hounslow Growth 17.50 16.50 15.50 14.50 13.50 12.50 11.50 Gross Hourly Earnings, 2014 10 percentile 20 percentile 25 percentile 30 percentile 40 percentile Median 10.50 9.50 8.50 London Living Wage = 9.15 at 2014 7.50 6.50 Minimum Wage = 6.50 in 2014 Residents Workers 3
West London is a huge area, with a population bigger than Birmingham and Manchester put together. It is that size that means that there is no one West London. The north of West London is frequently though certainly not uniformly residential in nature, whilst the south of the area accommodates more jobs. This diversity means that one size solutions will not fit all. A more nuanced approach will be needed at sub-area level, through targeted intervention. Although policy delivery will be need to be tailored to localities, we can see that policy design and management is likely to be most effectively delivered at West London level, to best secure a critical mass of management expertise and scale efficiencies. Population density per square km (West London) Employment count (West London) Source: Census (2011 data) Source: ONS BRES (2014 data) 4
Growth Index: 2005 = 100 Executive summary We have little reliable information to guide us into the future. Perhaps because of this, West London s ability to respond to change has historically proven to be West London s biggest friend. The need for policy flexibility and agility seems likely to grow in future as the pressures of growth increase, and capital and labour flow more rapidly. Total Population and Working Age Population 2005-2035 Projected change in employment by sector, West London 2015-2035 1.45 1.35 1.25 1.15 1.05 0.95 0.85 West London (Total population) Greater London (Total population) UK (Total population) Total (148,050 jobs) Construction (11,510 jobs) Accom, Food Serv & Recreation (22,190 jobs) Transport & storage (25,330 jobs) Wholesale & Retail (24,250 jobs) Public Serv (29,450 jobs) Professional & Other Private Serv (29,360 jobs) Information & communication (8,380 jobs) Utilities (310 jobs) Finance & Insurance (650 jobs) Manufacturing (-3,230 jobs) Extraction & Mining (-120 jobs) Agriculture, Forestry & Fishing (-30 jobs) Employment Growth, 2015-2035 16% 34% 25% 24% 15% 15% 13% 11% 7% 6% -8% -9% -14% -15%-10% -5% 0% 5% 10% 15% 20% 25% 30% 35% Source: Experian RPS Source: Experian RPS 5
The broad outlines of change can be discerned, however. The most recent phase of London s developments that skills demands are going upmarket. This means that low skill levels need to be addressed, both inside and outside schools. This is not just an economic imperative, but social one too: life outcomes for the unskilled are poor, and are likely to get worse. There appears to be a major role for the West London Alliance here. England London Qualifications of working age residents, 21% 2014 16% 36% 49% Basic (NVQ 1) or no qualification North & East London South London 14% 20% 41% 47% Degree equivalent qualification Central London 13% 62% West London 15% 48% 0% 10% 20% 30% 40% 50% 60% Source: Annual Population Survey Source: GLA London Labour Market Projections 2013 6
If West London is going to share in London s future prosperity driven by knowledge based businesses and the flat white economy - it needs to make sure that it attracts and retains a skilled, affluent population by keeping West London a great place to live. There is a risk that this might mean gentrification. But evidence suggests that as long as the less well off are not simply displaced by change, everyone could benefit from more socially mixed communities. West London s Opportunity Areas and new developments many of which are already under way have an important role here. Opportunity Areas and Areas for Intensification in the London Plan (2015) Source GLA (2015) Opportunity Areas and Intensification Areas in West London (homes and jobs) to 2036 Employment capacity Minimum new homes Place / status Borough Opportunity Area Heathrow Hillingdon 12,000 9,000 Southall Ealing 3,000 6,000 Harrow and Wealdstone Harrow 3,000 2,800 Wembley Brent 11,000 11,500 Colindale/Burnt Oak Barnet 2,000 12,500 Cricklewood Brent Cross Barnet 20,000 10,000 Old Oak Common Brent, Ealing, H&F 55,000 24,000 Park Royal Brent, Ealing, H&F 10,000 1,500 White City H&F 10,000 6,000 Earls Court & W Kensington H&F with RBK&C 9,500 7,500 Intensification Area Mill Hill East Barnet 500 2,000 Total 136,000 92,800 Source GLA London Plan (2015) Annex 1 NB. Old Oak and Park Royal have been merged to form the Old Oak & Park Royal Development Corporation 7
Growth is representing real challenges. Space in West London will be expensive as long as it remains an economic success; but ways of alleviating pressure are emerging. Planners will need a creative response, particularly given that many of the old sources of growth on redundant manufacturing land are becoming exhausted. New scenarios are emerging that will see higher density residential development around transport hubs (nodes) and in existing low-density suburbs, such as in locations projected by Transport for London (TfL) that are shown as options below. The good news is that these potential changes do seem to be working with the grain of at least some structural changes in town centre retail and secondary office markets. Option 1: Trend base Option 3: increasing densities in district and major centres Source: TfL, Outer London Commission Option 2: Density increase at transport nodes (PTAL 4+) Option 4: suburban renewal Source: TfL, Outer London Commission 8
There appear to be trends emerging around poverty and inequality. Not all residents have maximised the benefits offered by West London and London generally. The newly released Index of Multiple Deprivation (2015) shows the uneven spatial distribution of deprivation around West London Although there are some pockets of severe deprivation in West London, relative deprivation appears to be falling compared to the rest of England. Blue areas in the map are becoming less deprived at a faster rate than the red areas Source: ONS IMD 2015 Source: Consumer Data Research Centre, UCL Dept of Geography. Contains National Statistics & Ordnance Survey data Crown copyright & database right 2014-5 9