The Future of Towns and Cities Post-Covid 19
In this report, KPMG look at the impact of the coronavirus pandemic on towns and cities in England. They also consider what needs to change, if towns and cities are to continue to be vibrant places to live, work and visit.
This report notes that the big revelation of the pandemic has been how effectively many people can work from home. As the virus struck, businesses proved agile at transferring activity to workers’ homes, which resulted in a number of cost savings and productivity gains for companies and workers. KPMG reflect that, whilst there is debate about how permanent these changes will prove once the virus is no longer a threat, there will most likely be long-term consequences that will need to be considered and responded to.
For example, KPMG note that the recession triggered by the pandemic has already squeezed profit margins across a swath of businesses and many CFOs are already considering cutting costs by downsizing on expensive property commitments. KPMG estimate that business support services – from taxis to gardening to security services – will see reduced demand as businesses cut back on office space or leave some cities altogether, with a likely fall in the number of these support businesses anticipated as a result.
In a post-COVID environment, KPMG state that a return to old commuting habits is unlikely, with a significant proportion of those able to work from home doing so for at least part of the week. This will hit personal services, such as hairdressers, and other businesses on the high street, such as those offering food to go at lunchtime for office crowds, the hardest.
According to KPMG’s analysis, high streets could also lose between 20-40% of their retail offerings as a result of the increase in online retailing that has accelerated during the pandemic. Basingstoke, Bracknell and Guildford appear to be the worst affected, with up to 39% of retail jobs vulnerable in the shift towards online sales. Across all the towns and cities covered by KPMG's analysis, there could be nearly 400,000 job losses on the high street, affecting between 1-5% of the local labour force.
KPMG conclude that the COVID pandemic has put in motion transformational changes that are likely to dominate the agenda for years to come. As people travel less for work or to shop, town and city centres will need alternative offerings to fill vacant space and to attract people to the area. Locations that succeed will likely have a range of cultural assets as well as easy access to green space. In many cases there will be a need for local government and the local community to get involved in order to preserve the vibrancy of the high street and reimagine them as cultural and recreational hubs.