Businesses in London are increasingly coming under strain paying their rental bills in a city where costs are rising every day. Space in the capital has always been in high demand, but with more and more businesses setting up every day, the demand for new space is putting pressure on the government to act. In response to this rising demand, we are seeing the government approve new build after new build, adding even more buildings to an already crowded city.
At the same time, vacancy rates in London’s public sector buildings are rising. In 2006, the Department for Communities & Local Government (DLCG) published findings that 58% of London boroughs saw vacancy rates either increase or stay the same since 1998. The worst offender, the City of London, saw a 100% increase in vacancy rates over the eight years. Since then, according to the Greater London Authority, the DLCG has not been able to publish any data due to government budget cuts – budget cuts that could be avoidedif the government were to make proper use of their public sector buildings in London.
The London Health Commission recently announced that between £50-60 million is spent on maintaining empty NHS buildings. Tens of millions are going to waste on upkeep for vacant spaces that could, if used properly, actually make the government money. Instead, they are spending even more to create additional space in London, space that already exists and could easily be used to meet London’s rising demand.
This is a blatant waste of money and resources in a country whose economy is still recovering from the latest recession, which left a number of London boroughs in fragile state. Budget cuts have become a regular occurrence in order to make up for lost ground, but these cuts more often than not come from the health and education sectors that need all the money they can get. If cuts are necessary to help the economy recover, why not cut the amount of money wasted on empty spaces?
This is an issue which needs to be addressed before we build more in an already overcrowd city; It’s not good enough to let our already fragile economy pay the price.
Paul Statham is Managing Director and Founder of Condeco