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Still going underground? The potential implications of COVID-19 on public transport and planning policy in London
As the UK reaches past what will hopefully be the only peak of the COVID-19 pandemic, questions are being asked about what the ‘new normal’ will be post-pandemic. These questions include how long some form of social distancing will be required, where will we work in the future, and how we will get there. Pre-pandemic, it was common for many people that work in the major commercial hubs of London such as Canary Wharf, the City of London and West End to commute via mass public transport services (e.g. London Underground, suburban railways and buses). The importance of these services pre-pandemic is reflected in statistics produced by the Office for Rail and Road (ORR) and Transport for London (TfL) that measure usage of the railway network and London Underground. ORR statistics show that in 2018/19, there were 1,499 million entries and exits at above-ground railway stations within London, representing an increase of 50% over the number of entries in exits in 2007/08 (993 million)[1] (see Figure 1). Across the London Underground network, TfL estimates that there were 2,946 million entries and exits and around 1,358 million journeys in 2017, which represent increases of 23.1% and 26.7 respectively from 2007[2] (see Figure 2). However, it is worth noting there had been a slight decrease in exits and entries and journeys between 2016 and 2017, which impacted upon TfL’s income[3]. Figure 1 London Railway Station Entries and Exits, 2007/08 – 2018/19 Source ORR (2020) / Lichfields analysis Figure 2 % Change in London Underground Entries and Exits and Network Journeys, 2007-2017 Source TfL (2020) / Lichfields analysis The pandemic has, of course, radically impacted on passenger numbers for 2020 as the government introduced lockdown measures. The railway network is currently running at around 10% to 15% of pre-pandemic capacity because of social distancing measures and fewer services being run[4], while TfL estimates the London Underground with social distancing enforced will have the capacity to carry 13% to 15% of the normal number of passengers when running a full service[5]. This is further illustrated in Figure 3 which shows the difference between the normal capacity and an estimated enforced social distancing capacity of a train on each London Underground line. Figure 3 London Underground Line Train Normal Capacities and Illustrative Enforced Social Distancing (1 metre) Capacities Source: Lichfields analysis[6] Note the illustrative capacity of trains on each London Underground line was calculated by taking the length of a train car, multiplying the length by the number of cars in each train and then dividing by one metre, which will be the minimum social distance recommended by the UK Government as of 4th July 2020. The actual social distancing capacity of trains on each line may vary from these illustrative estimates as the length of each train is the primary input and the calculations do not take account of how the width of a train could be used to boost capacity and the effect of household groups travelling together. Working from home where possible has become a common occurrence and is clearly shown by the Office for National Statistics (ONS) Lifestyle and Opinions Survey dataset, which indicates 44.1% of people surveyed at least partly worked from home between 24th April and 3rd May 2020[7]. This represents a significant increase from 2019 when 14.1% mainly worked at their own home, same grounds or buildings, or used their home as a base of operations[8]. As the workforce becomes increasingly used to working from home, there is the potential for it to become a more common occurrence post-pandemic as workers become used to a different lifestyle. Initial indications of this include the results of a survey undertaken by transport consultancy Systra, who found 17% of full and part-time workers believed they would work from home more once travel restrictions are lifted, and 27% of rail commuters said they would make fewer public transport trips[9]. The initial actions of some businesses also suggest the potential change, with Twitter offering the opportunity for UK staff to ‘work from home forever’.[10] This potential shift in where people work could have significant implications not just for the organisations that run public transport services, who are already faced with further large drops in revenue because of the pandemic[11], but also how the Mayor of London and Greater London Authority (GLA) plan to focus development around existing public transport nodes and new public transport schemes (e.g. Crossrail 2 and the Bakerloo Line Extension). If people work from home more often and require public transport less, demand for services such as the London Underground could decrease, thereby introducing the question of whether there is also a need for the same level of new public transport infrastructure that adds new capacity to the system. Living close to public transport nodes could also become a less important factor influencing where renters and homeowners choose to live, that might undermine to some extent the attractiveness of high-density new dwellings that are delivered under the premise of providing workers with an easy commute via public transport. The May 2020 RICS Residential Market Survey indicates this could occur – with 78% of respondents feeling there would be a decrease in the attractiveness of tower blocks, while the desirability of having a garden/balcony, being located near to green space and greater private/less communal space would increase (81%, 74% and 68% respectively)[12] – although respondents did not anticipate the desirability of being located near to a transport hub would change. But the implications of any such potential shift in buyer attitudes could be significant – Table 2.1 of the Intend to Publish London Plan indicates 78,000 new homes could be accommodated within Opportunity Areas along Growth Corridors that include the Bakerloo Line Extension, Crossrail 2 South and Crossrail 2 North[13]. There is logic to why the Mayor and GLA have planned in this way; improvements in public transport have a history of bringing development forward in London. For example, the success of Canary Wharf as a business location was helped by the completion of the Jubilee Line Extension, and the Crossrail Property Impact and Regeneration Study (2018) indicates consent was gained for 90,599 residential units around Crossrail stations between 2008 and 2016[14]. Furthermore, analysis of London Development Database (LDD) completions data by Lichfields shows there have been considerable net gains in dwellings around Crossrail stations on the above-ground sections of the Great Western Mainline and Great Eastern Mainline (see Figure 4 and Figure 5 below)[15]. Figure 4 Cumulative Net Dwelling Completions within 0.8km of London Crossrail Stations on the Great Western Mainline and Great Eastern Mainline by Financial Year Source: GLA (2020) / Lichfields analysis Figure 5 Cumulative Net Dwelling Completions within 1.0km of London Crossrail Stations on the Great Western Mainline and Great Eastern Mainline by Financial Year Source: GLA (2020) / Lichfields analysisNote that all numerical values in Figure 4 and Figure 5 are rounded to the nearest fifty. The stations included in the analysis for the above-ground sections of the Great Western Mainline and Great Eastern Mainline within London are as follows:East: Maryland; Forest Gate; Manor Park; Ilford; Seven Kings; Goodmayes; Chadwell Heath; Romford; Gidea Park; and Harold Wood.West: West Drayton; Hayes and Harlington; Southall; Hanwell; West Ealing; Ealing Broadway; and Acton Mainline. Planning policy in London may need to adapt to find a new way forward. Essentially, planning can be viewed as a market intervention designed to deliver better places in the long-term than if short-term market forces were left unchecked; however, in the current circumstances, flexibility in policy may be of a benefit to enable quick interventions so that long-term ambitions do not go substantially off course. To inform whether and when quick interventions may be required, the Mayor and GLA could consider initiatives such as: Monitoring the use of public transport in collaboration with organisations such as TfL and train companies to identify whether or not commuting patterns permanently change as a result of the pandemic; Investigating how forms of private transport (e.g. bicycles and motorcycles) could be integrated into the backbone of planning policy to enable the same or better outcomes; Engaging proactively with different stakeholders and organisations to gauge market sentiment; and Analysing the latest data and intelligence to keep up to date with changing economic and social conditions. The Mayor and GLA have the capability to undertake such initiatives, and it will be interesting to watch what they do in the light of the current pandemic and recent response from the Secretary of State on modifications to the London Plan in terms of post COVID-19 planning policies. [1] Office for Rail and Road (ORR), (2020); Station Usage 2018-10 Time Series Data (revised March 2020)[2] Transport for London (TfL), (2018); Multi Year Station Entry and Exit Figures[3] https://www.wired.co.uk/article/tfl-finances-transport-for-london-deficit-passenger-numbers[4] https://uk.reuters.com/article/uk-health-coronavirus-britain-railway/with-one-way-systems-and-floor-markings-britain-increases-rail-services-idUKKBN22U0KC[5] https://tfl.gov.uk/info-for/media/press-releases/2020/may/tfl-announces-plan-to-help-london-travel-safely-and-sustainably[6] https://www.whatdotheyknow.com/request/239641/response/590412/attach/3/RS%20Info%20Sheets%204%20Edition.pdf[7] Office for National Statistics (ONS), (2020); Opinions and Lifestyle Survey (COVID-19 Module)[8] ONS, (2020); Homeworking in the UK Labour Market[9] https://www.systra.co.uk/en/newsroom-37/latest-news/article/public-transport-passengers-say-they-could-make-fewer-trips-after-pandemic[10] https://www.bbc.co.uk/news/technology-52628119[11] https://uk.reuters.com/article/uk-health-coronavirus-london-transport/london-transport-operator-secures-emergency-government-funding-bbc-idUKKBN22Q30A[12] RICS, (2020); May 2020: UK Residential Market Survey[13] Greater London Authority (GLA), (2019); The London Plan – Intend to Publish: Spatial Development Strategy for Greater London.[14] Crossrail, (2018); Crossrail Property Impact and Regeneration Study[15] GLA, (2020); London Development Database – Housing Completions Unit Level Image credit: Claudia Soraya via Unsplash  

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In the midst of every crisis, lies great opportunity
Whilst not unexpected, the recently published ONS figures that reveal a 20.4% contraction in the UK economy in April are still shocking. This decline – which relates to a single month and adds to the decline of 5.8% experienced in March 2020 – is three times greater than the total reduction experienced during the last recession and equates to a fall of approximately £30 billion in Gross Value Added (GVA). The ONS analysis splits the economy into 14 sectors and shows that all of these, except for Public Administration and Defence (which remained stagnant), contracted in April 2020, with 10 sectors experiencing a more than 20% decline in GVA, and 11 experiencing their largest falls since records began in January 1997. In providing an overall figure for the UK economy, this data obscures regional variations. Analysis by Lichfields has shown that South East Wales is at particular risk of short-term economic contraction because of its strong reliance upon hospitality, manufacturing and education sectors. Given that South East Wales accounts for 52% of Wales’ total GVA[1], a severe regional shock will have a negative impact on the wider Welsh economy. Looking to the future The economic impacts of Covid-19 will inevitably be felt for a considerable period of time but many commentators have pointed out that April may be the worst month as there was a partial relaxation of lockdown in England in May. However, a stricter lockdown continued in Wales into June, potentially resulting in a further divergence between the economic performance of Wales and England. As detailed in our Covid-19 Economic Recovery Framework, planning for the longer term recovery is critical to mitigating a risk of continued economic decline. History has taught us that a period of recession can result in opportunities for specific sectors to both lead the recovery and reshape the profile of the local economy. Although the circumstances that have promoted the current downturn are very different to anything that has gone before, and the scale of decline is unparalleled, there are already clear signs of the sectors that are likely to emerge stronger than before. Health / life-sciences As a health crisis, Covid-19 has been fought by front-line health workers and its resolution lies in a health solution. The manufacturing of pharmaceuticals was the only manufacturing subsector that displayed upward growth in April (+4.7%), following on from strong performance over recent months. This growth would undoubtedly have been boosted by the investment and increased activity that has been focused on Covid-19 treatment, vaccines and testing but ONS also reports higher demand for general pharmaceutical products, with strong growth in domestic facing output in April 2020. We anticipate that there will be a greater focus on this sector in the future in terms of both public and private sector investment. Logistics The logistics sector has been instrumental in keeping the country going through the pandemic. Be it through the supply and distribution of PPE to front line staff, delivery of food and other essential items to stores, or the increase in online shopping, the logistics sector has stepped up to the challenge and played a critical role in supporting and protecting people. Globally there was a 25% increase in airfreight volume in March 2020 compared to March 2019[2], whilst increased levels of road and rail freight have been the backbone of domestic logistics during the pandemic. The improved efficiencies that have been forced upon the sector put it in a strong position to continue to meet growing demands as consumption patterns change for good, particularly if a decentralisation in population and economic activity does occur. Energy/environmental More than 200 top UK firms and investors have called on the government to deliver a Covid-19 recovery plan that prioritises the environment[3]. There is an increasing argument that Covid-19 should be viewed as a pivotal moment in the shift to a green economy. Specific proposals that have been put forward include: Increased investment in low carbon innovation and industries; Focusing on those sectors that can support the environment; and, Ensuring that companies that receive government support are operating in a manner that is consistent with climate goals.   A growth in the green economy would align very closely with the Welsh Government’s sustainability objectives and its aspirations for green growth to be fuelled by an increased reliance on green energy.   IT / Communications The UK-wide lockdown forced us all to look to technology for work, entertainment and social contact. Reflecting the importance that we are all placing on video communications, the share price of Zoom has doubled since the start of March[4] and ONS has noted that telecommunication and programming and broadcasting activities have also been resilient to falls in output. It is likely that some of the practices that we have adopted out of necessity will remain commonplace after Covid-19 has passed and that such platforms will continue to enjoy significant growth. In addition, expected increased future levels of home working (compared to the pre-Covid-19 baseline) and growth in key sectors such as life-sciences, green energy and logistics will all rely on continued advances in IT. Tourism / hospitality This sector suffered the most significant contraction in April 2020 (-88.1%) and remains shut-down. Although there are very real concerns about the survival of many tourism businesses, there is the potential that it will grow significantly in the future. This will particularly be the case if restrictions on international travel remain and if people remain nervous about international travel – both of which may encourage them to choose to holiday in Britain instead of travelling to overseas destinations. Implications for South East Wales The objective of the Cardiff Capital Region (CCR) City Deal is to “bring about significant economic growth in the region through investment, upskilling and improved physical and digital connectivity.”[5] The City Deal Investment Framework seeks to “improve the business environment within the CCR, creating rich ecosystems that stretch and support the development of [the following] key sectors in the economy, improving comparative performance against other cities and regions in the UK and internationally.”[6] There are close parallels between these sectors and those that I have identified above: Life sciences and energy & environment are specifically identified by the CCR; The wider energy and environment sector also incorporates transport engineering activities that relate to electric and other ultra-low emission vehicles; Britishvolt has identified St Athan as its ‘preferred’ location for the UK’s first battery Gigafactory, with the first stage of the plant expected to be fully functional by Q3 2023[7]; and, The broad IT sector incorporates compound semiconductors, fintech, cyber security and AI. This synergy gives confidence that these sectors will experience growth and spearhead the much-needed recovery of the Welsh economy. As to the two remaining sectors that I have identified: The strategic location and accessibility of South East Wales, and the scale of its population and strength of its economy presents significant logistics opportunities; and, The region accounts for 41% of total GVA for Wales in the accommodation and food service sector[8] which means that it is well placed to welcome visitors back when restrictions are lifted. The takeaway At a time of ongoing crisis, there are reasons to have some optimism about the future recovery. The latest economic headlines make for grim reading but we must look to the future with renewed vigour. Although the timing and rate of this recovery remain uncertain, its speed and strength will depend on the extent to which close collaboration can be forged between the Welsh Government, CCR, local authorities, business interest groups and individual businesses. Work should start now on ensuring a favourable environment to investment – through the creation of a positive planning regime, support for investment, training to ensure that the necessary skills are available, and a positive approach to residential development as a driving sector of the economy and essential to supporting a growing workforce. We will be considering these individual sectors in more detail in a series of more detailed blogs and Insight pieces, and will also be looking at the direction of the economy in different parts of Wales. [1] Source: StatsWales GVA by area and component[2] Source: https://www.statista.com/statistics/1112254/air-freight-volume-worldwide-covid-19/  Accessed 16 June 2020.[3] Source: https://www.bbc.co.uk/news/business-52851185  Accessed 16 June 2020.[4] Source: https://www.marketwatch.com Figure based on share price on at 1500 BST on 12 June 2020 ($230.39)[5] Source: https://www.cardiffcapitalregion.wales/[6] Source: https://www.cardiffcapitalregion.wales/wp-content/uploads/2019/06/ccr-investment-framework.pdf[7] Source: https://www.insidermedia.com/news/wales/south-wales-preferred-location-for-landmark-battery-gigafactory?utm_source=wales_newsletter&utm_campaign=wales_news_tracker&utm_medium=top_story_article Accessed 16 June 2020.[8] Source: Experian business strategies forecasts March 2020

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