London is changing. But then, it always is. The theme of my new book, ‘Reinventing London’ is that change is the lifeblood of a great city. Over the past thirty years it has replaced around 1 million jobs in manufacturing, largely around the edge of the city and along the radial routes, with more than a million jobs in the centre of the city. Fortunately, and some of it was luck, we had enough infrastructure to make this possible. The Victorian railway and underground legacy has creakily heaved us into the twenty first century as one of the world’s great cities, overcoming the loss of confidence and built infrastructure which was the legacy of war.
Nobody really forecast this shift. In the 1990s it was fashionable to talk about a future of market towns and the continued loss of urban density. Even those of us who were dubious about this were not at the time foreseeing that half the world’s population would now be living in cities. In spite of the trend of continued services growth and an end to manufacturing decline was obvious it still took a leap to see that this meant that London’s employment would now grow.
If identifying existing trends is not easy, spotting the emerging trend is still harder, being a dynamic and emergent process. The developing digital economy on the northern fringe of the City was not planned, though planning can certainly stifle such potential. Spare capacity, whether of buildings, transport or bandwidth is essential to enabling growth. Economists who model maximising outcomes where everything is ‘just right’ forget this at the economy’s peril.
Joseph Bazalgette, when asked to design a sewer system in the 1860s, calculated the effluent of the densest part of London and applied this rate to the whole of the city. Then he doubled it, to allow for growth. Then he built the Embankment, with enough room for a railway – the District line – beside the sewers. None of our current evaluation mechanisms would have given this project a positive ratio of benefits to costs. But the payback has been enormous, as the sewers have only recently needed new capacity and the District line is an essential part of our infrastructure.
Taking a long term view is of course taking a bet. No one can be sure that people will continue to want to come to cities. But the trend seems pretty strong and well established, but we need to provide the backdrop which makes it possible. Transport, water, drains, power distribution, and housing are all essential and require both public and private investment. Both the scale and the regulatory backdrop mean that the public sector has to be bold – it was municipal bonds that financed the sewers after all. A similar funding mechanism is proposed for the extension of the Northern Line into Battersea, to open up new high density areas and enable the refurbishment of the Battersea Power Station after years in the doldrums. The GLA borrows the funds, and they are repaid out of the business rates generated by the development.
Large scale finance is equally necessary to solve the housing problem and provide for the growth in population and demand that is driving up prices in the capital. A wholesale funding mechanism for housing development which makes possible a range of tenures and the rapid buildout which housing for sale makes harder is essential to solve this pressing problem.
Better transport and housing make possible the continued development of high density economic activity, the agglomeration which produces the high productivity which drives growth and performance. Effective labour markets encourage investment in skills and the ability to find the right job. High density makes it easier to find clients for new firms, and to make new ideas effective. Just as in eighteenth century coffee shops, people still congregate to talk and to communicate, and not just with their laptops. Extending the areas of high density has been a theme of the last decades, in Broadgate and Docklands, Kings Cross and St Pancras, Paddington and London Bridge. It is no accident that all of these have invested in the quality of their transport connections and that Crossrail will continue to improve them.
All investment is finally about creating a city in which people can develop and use their skills and abilities. The funding mechanisms for investment, the planning regime, and our institutions are all necessary for this, but not sufficient without the diversity of people which we should celebrate and enhance.
Bridget’s new book ‘Re-inventing London’ is available now from the London Publishing Partnership. Order your copy here.