Cities to get rid of in city centre spending due to hybrid working

The Centre for Economics and Business Research (CEBR) has reported the coronavirus pandemic has led to a total of £11.9 billion of displaced city centre spending.

With many workers having swapped offices for their homes in major UK cities, the figure is based on an estimate of the total amount that workers might have otherwise put in shops, pubs and eateries near employment hubs in five of the UK’s largest cities between March 2021 and May 2021, which has been lost or displaced. Case study examines five from the UK’s largest cities: London, Manchester, Glasgow, Newcastle and Cardiff.

The CEBR says that if workers in offices move to hybrid working long-term, then these cities are going to see employment hub spending stand £322 million per month less than pre-pandemic levels.

Out from the five cities analysed in this study, Cardiff remains the city with the lowest share of workers who've returned to the office, using the number of individuals attending workplaces on weekdays standing 50 per cent less than pre-crisis levels in May. Meanwhile, Newcastle has the highest share of workers who've returned to places of work from these cities, with numbers at workplaces only 34 per cent lower than pre-pandemic levels in May.

It has been rumoured that government ministers are leaning towards encouraging a hybrid approach to office working despite 19 July.

Data in the Office for National Statistics implies that in 2021, 47 per cent of individuals did some work at home. Looking across the UK regions, this share is highest in London, at 57 per cent. Let's assume that these folks who are able to work at home maintain hybrid work patterns indefinitely, with 2 days at work per week on average, city-centre spending is going to be lower long-term. Under this assumption, we estimate that these cities will see spending near employment hubs stand £322 million a month less than pre-pandemic levels in total, divided in the table below.