The rapid decline of flexible and affordable working spaces in London is forcing small and micro business owners out of the city, the London Assembly has warned.
As part of its new “Helping SMEs to Thrive” report, the London Assembley Economy Committee, which scrutinises the Mayor of London’s work on economic development and wealth creation in the capital, laid out a line of recommendations to combat the high rents and workspace shortages forcing firms out of London.
The report detailed the loss of industrial land in London in recent years, following the relaxation of permitted development rights in 2013. Since then, 1.47m square metres of office space has been converted into residential housing.
Overall, sixteen per cent of industrial land was lost between 2001 and 2015, and the committee predicted that designated business space could fall by another third by 2041.
In outer London meanwhile, a fifth of working space could be lost to residential developments.
The report positioned the Assembly strongly in favour co-working spaces in London. With affordability such a central concern for the capital’s small business owners, the committee believes the co-working model has emerged as a vital response to rising rents.
The committee called on Mayor of London Sadiq Khan to work with local authorities to create more affordable working spaces “by using available space more smartly”, and to incorporate the voices of micro and small business owners – which make up 99 per cent of all London firms and contribute 48 per cent of all business turnover – into economic and planning policy.
It also pushed for research into why businesses are leaving London, identify which industries are most affected and the impact this has had on local communities.
Announcing the proposals, the report’s author and deputy leader of the Assembly’s Labour Group, Fiona Twycross, said affordable working spaces for small businesses would be crucial in ensuring economic growth.
“SMEs are the life blood of London’s economy and our local communities. Yet, they are struggling to find work space that is flexible, affordable and well-located,” she warned.
“The Mayor of London needs to address this issue to ensure the continued success of this city.
“We need concrete proposals to maximise affordable workspace and to fully understand why SMEs are leaving London. The voices of micro and small businesses must be heard when it comes to shaping the city.”
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