New research by Grant Thornton suggestsย London is set to lose significant portions of its most economically productive demographic, while young people from across the country are being dissuaded from coming to the capital by pressing issues such as the high-stress environment, lack of work-life balance and high housing costs.
The study โ published in a new report, Vibrant Capital [download] โ surveyed London residents and young adults from across the UK to understand the push and pull factors affecting the workforceย in the capital.
It concludes that Londonโs business, societal and political leaders must rethink their approach to the structural challenges faced by the city – in particular steps to tackle key issues like housing, health and transport must be elevated on agendas to ensure London remains a vibrant global capital, attracting top talent to live, work and grow.
Whoโs staying and whoโs going?
Around one in six (16%) Londoners โ or just over 1.4 million people2 โ expect to leave the capital within the foreseeable future. With the Office of National Statistics calculating the Gross Value Added (GVA) per capita in London as ยฃ43,6293, this represents a total potential loss of around ยฃ60bn in GVA from Londonโs economy.
Moreover, 6.2% of residents surveyed said they intend to leave in the next 12 months. Compared to the last available ONS data on UK migration, which showed that 4.4% of residents left London in 2015-16, this would represent an additional c.158,500 people (1.8% increase) leaving the capital โ around a ยฃ7bn hit to Londonโs GVA.
The desire for a healthy stress-free life and a better work life balance as well as concerns around the affordability of housing topped the list of priorities for these โLondon Leaversโ who were typically between 25-34 and in full time employment. Those planning to leave were also almost twice as likely to have been born outside the UK in the European Union, whilst 26% of respondents surveyed hope to leave not just London but the UK entirely.
Future talent
The research study also surveyed 1,080 university or college students and 315 young people aged 16-18 from across the whole of the UK to gauge their intentions to live and work in London in the future. 51% of all young people surveyed said they have no desire to come to the capital to live or work, citing work-life balance, housing affordability and being near to family and friends as the biggest factors influencing their decision. Of those currently studying at a London university or college, 71% want to stay in the capital after graduation, with 29% planning to leave as soon as they have graduated.
Vibrancy and retention
There are interesting correlations between the findings of the study and Grant Thorntonโs Vibrant Economy Index, which measures 324 English local authority areas against key indicators including โProsperityโ and โHealth, Wellbeing & Happinessโ.
This latest study shows that London boroughs which perform poorly on the Vibrant Economy Index typically see the highest proportions of people planning to leave. Barking & Dagenham, for example, which ranks second to last in the country for โHealth, Wellbeing & Happinessโ, has the second highest proportion of โLeaversโ, with more than a quarter of people planning to move away from London.
Sacha Romanovitch, CEO, Grant Thornton UK, said:ย โLondon is an amazing city and it is great so many Londoners see the huge benefits of living and working here.
โLondon is also in a unique position globally โ with the government, financial and tech centres all in one place. Imagine โ itโs the equivalent of Washington DC, New York and Silicon Valley all in one place. This combined with its rich social and cultural diversity make it an energising place to live and work.
โYet there are some big challenges to grasp that, if not addressed, will risk key people to the future vibrancy of London choosing to leave and will also deter talented young people from coming here at all. The shortage of affordable housing, overcrowded transport systems, air pollution all add to the daily stress of living and working in London. We know that these challenges wonโt be solved by any one agent alone. In the midst of the uncertainty around Brexit the imperative for business, government and community leaders to work together to address these important issues has never been higher.
โDevita Davison, a community leader at the heart of regeneration in Detroit said โnothing about us, for us can happen without usโ. We must follow her lead and design solutions informed by views from across Londonโs rich cultural, commercial, political and social spectrum. Together we can shape the future of our vibrant capital city โ such that it continues to thrive as a trusted global centre and a growth generator for the UK as a whole.โ
