Can Working From Home Support Levelling-Up?

In an interesting and well-researched recent article in the FT by Emma Jacobs and Andrew Hill told the story of how working from home / hybrid working has had a positive boost to some commuter towns in the UK.

It is clear that some affluent suburbs, commuter, market and seaside towns have benefited from an influx of people moving out from cities, as well as their residents spending more money locally. These tend to be already attractive, affluent places within striking distance of major employment centres making it feasible to commute a couple of times a week. Some places, including seaside towns, that were previously beyond feasible daily commuting distance, have benefited.

This is expanding the zone of economic influence around major cities, particularly London. In our 2005 Regional Futures report the late Prof. Sir Peter Hall contributed a section on the “London & South East megacity region” then stretching from Swindon to Southend, Peterborough to Bournemouth with a population of 19m, & paces with interdependent economic links. Transport improvements were already expanding this megacity region. GWR electrification have extended it along M4 corridor to encompass Bristol. The Elizabeth Line has brought additional 1.5m people within 45mins of central London. HS2 will do similar for Birmingham.

WFH / hybrid has accelerated the long-standing trend of upwardly mobile people, particularly family builders leaving cities to pleasant places nearby. Richard Florida has called this “accelerated family flight”. Of course housing in these places tends to be expensive, and becoming more so, with planning policies and NIMBYs that restrict their growth.

Analysis of the latest census data shows the places that have benefitted from recent internal migration: basically the nice leafy, pretty parts of southern England, plus the affluent parts of the north. Less attractive, more remote, former industrial towns and regions are not benefiting to the same extent. In fact many of them continue to lose population.

There is a big question as to what this means for city centres and science / office parks, which have played a major role in productivity and economic growth in recent decades thanks to the knowledge spillovers they enable through agglomeration?It is interesting that co-working spaces are opening in small towns. Very nice for middle-aged affluent remote workers who will benefit from F2F interactions without a long & expensive commute. Less good for younger workers who benefit from being around them in larger city offices. Perhaps cities and large employers can benefit from best of both worlds: expanded labour catchments, more flexibility for employees, while retaining/ curating some face-to-face interaction? I remain to be convinced. And town centres in places with lots of people who can’t WFH benefit much less, and also suffering from shift from bricks to clicks in retail.

These trends aren’t new but are accelerated. There are winners (already nice well-connected, affluent places in the South East, Cotswolds, Cheshire, the Peak District and Yorkshire Dales etc, middle-aged well-paid “office” workers, home owners); but also losers (younger workers, peripheral former industrial towns & regions, and perhaps the centres of our most productive regional cities). Not exactly levelling-up!