Commuters / London office

Long-lasting ‘experiment’ with hybrid working could have unintended economic impact

New report addressing the possible economic risks of businesses adopting hybrid working permanently.

Press release published on 24 May 2023

  • Transport for London tube exits and new survey data suggest office attendance has rebounded strongly to 70 per cent of February 2020 levels 
  • An initially strong return means nearly half of central London workers now attend the office three days or more, but increase in office attendance has stalled since beginning of 2023 
  • New report addresses uncertainty over long-term impact of hybrid working and calls for more research and business engagement around risks of permanently lower presence in offices 

New data show office attendance in London has recovered strongly since the end of Covid restrictions, confounding predictions of remote work becoming the ‘new normal’. However, recovery has stalled in 2023 and a report by Centre for Cities co-authored with Professor Dan Graham and his team at Imperial College London, Office politics: London and the rise of home working, in partnership with EC BID, addresses possible economic risks of businesses adopting hybrid working permanently. 

Transport data shows workers returned to offices in large numbers after restrictions lifted in February 2022. Weekday tube exits from stations in and around the City grew by 40 per cent in the period from April-November 2022, an average increase of 600,000 exits per week.   

But this recovery has flatlined since the turn of the year, stabilising at around 70 per cent of February 2020 levels with most central London workers continuing to work on a hybrid basis. 

And new survey data from Centre for Cities reveals that the average worker in London spends 2.3 days in the office per week in April 2023, around half of all working hours spent in the workplace prior to the pandemic. Two days in the workplace was the most popular working pattern (26 per cent of respondents), although around half of workers who went into the office worked a minimum of three days a week in their offices. Workers who lived within London reported spending more time in the office than those living outside, while those under 30 reported being more likely to be in the office than older age groups.  

Despite businesses’ understandable caution around openly calling on workers to come back to the office, most businesses require employees to come to the office for a minimum number of days per week. Three quarters of respondents said they were required to be in at least one day per week, and almost half said their employer had mandated set days to do so. Over a quarter of all workers come in more than this base requirement. 

While the return to the office is likely to be a good thing for London’s economy, the report questions whether this will be enough to deliver the productivity growth that London and the wider UK economy desperately needs. In particular, it raises challenges around the impact on creativity, knowledge creation and on-the-job learning that is more difficult to do in a hybrid or fully remote arrangement. 

To encourage more workers back to the city centre, the report calls for: 

  1. The Government and the Mayor to work with business groups to encourage an increase in the minimum number of days in the office. In London the Mayor should run an equivalent to the ‘Let’s Do London’ campaign for leisure visitors to encourage a greater return to the workplace. 
  2. The Mayor to protect existing services on the public transport network so as not to lengthen commuting times. 
  3. The Mayor and Transport for London to consider a temporary scrapping of peak fares on a Friday to encourage more workers to come in on what is the quietest day. 
  4. The Mayor to establish a Productivity Advisory Council, akin to the Chancellor’s Economic Advisory Council, made up of businesses familiar with hybrid working and its impact on innovation and productivity. 

Policymakers should also be wary of any short-term decisions that make long-term economic growth in central London harder to achieve. For example, they should avoid delays to long-term investment decisions based on assumptions about lower demand remaining permanently, and be wary of a push for more residential space in the centre of the Capital eating up office space. 


Andrew Carter, Chief Executive of Centre for Cities, says:  

“The Covid-19 pandemic and the lockdowns that came with it inadvertently forced many advanced economies into a big experiment in new ways of working. We’re yet to see what this does to an economy that relies on creativity and interpersonal interaction. 

“But the historic context is important: London’s city centre has been an enormous success story over the last hundred years. Unless something fundamental has changed in how people generate and share ideas, the future should be at most a moderated version of the past. 

“Home working has delivered many immediate benefits for workers in knowledge-based industries, such as reduced commuting and more flexibility. But these immediate benefits must be balanced with the potential longer-term costs of lower levels of creativity and less on-the-job learning, particularly for younger workers who do an unofficial apprenticeship through learning from their older colleagues.  

“Lifting Covid-19 restrictions on its own has not been enough to bring some workers back. Policy makers should be wary that we don’t passively let a public health emergency turn into a longer-term negative impact on the economy.” 


Kate Hart, Chief Executive of the EC BID, says: 

“I am pleased to see the strong recovery in office attendance across London, defying predictions of remote work becoming the new normal.  

“However, with most London workers adopting a hybrid-working model, it is vital for the future of London and the wider UK economy that we address challenges that hybrid working poses to creativity, knowledge sharing, and on-the-job learning.   

“At EC BID it’s our priority to reinvigorate the Eastern City area, encouraging the return of workers and visitors, to safeguard the future of businesses. There are several interesting recommendations in this report, including a coordinated campaign focused on bringing office workers back and greater flexibility around ticket fares on some days of the week. Ultimately, the report is a timely reminder for both the private and public sector to work collaboratively to enhance the experience of being in the city, foster innovation, and ensure the sustained growth of the capital.” 

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