Open workspaces such as incubators, coworking, or artist studios, provide great value to local and regional economies. They provide beneficial spill-over effects and can address inequality and disadvantage, as well as maximising the performance, growth ambitions, and jobs created by small businesses, compared to traditional offices or working at home.
We’re part of the Open Workspace Providers’ Network, a group of workspace providers who set up to inform emerging workspace policies, share learning, and engage with boroughs and developers.
Way back in 2014 the group was established to champion the work of London’s Open Workspaces and to propose priorities and actions for supporting the development of these; and to act as representatives of a wider network of work space providers, particularly in relation to making use of non-residential space in new housing developments.
One of the first things the group did was commission IPPR to carry out a piece of research investigating the value of Open Workspaces to London’s economy (£1.7 billion by the way) and to develop policy recommendations related to the growth, development, and long term sustainability of London’s Open Workspaces.
Last week the Mayor of London Sadiq Khan launched the report in Catford. You can download the report here and read key finding and the summary recommendations below.
Where London’s property market is not sustaining open workspaces, the mayor and local authorities should act. We recommend that the following actions are taken.
- London’s mayor should be granted new powers over ‘permitted development rights’, which put open workspaces at risk of residential development.
- The mayor should launch a new fund for open workspaces in London’s growing town centres, leveraging funding from the private sector and local business community.
- Local authorities should use the planning system as well as their own surplus assets to create open workspaces in areas of employment growth.
- Providers should use the ‘impact matrix’ we develop in this report to gather the evidence to support the case for public as well as private investment in open workspaces.
RECOMMENDATIONS TO THE MAYOR
- The mayor of London should lobby for full flexibility over permitted development rights, including the power to set the exemption for the central activities zone (CAZ), Canary Wharf and Tech City, to set article 4 directions on local areas, and the power, in consultation with the boroughs, to charge the community infrastructure levy (CIL) on developments where they will put pressure on local infrastructure.
- The mayor should launch a new fund to support open workspaces that accelerate the growth of clusters in town centres outside the CAZ. This fund should leverage additional investment from local business communities, and encourage growth in opportunity areas (OAs).
- The mayor should work with Transport for London (TfL) to ensure that developments on TfL’s 5,700 acres of land include open workspaces, particularly in new town centres near transport hubs.
RECOMMENDATIONS TO LOCAL AUTHORITIES
- Local authorities (LAs) should work with providers to turn unused spaces into open workspaces. The Greater London authority should host an online directory of available spaces, such as in town halls and libraries, that workspace providers can bid for.
- Local authorities should apply for article 4 directions to exempt from permitted development rights key employment growth areas not in the CAZ.
- Local authorities should use section 106 negotiations to secure spaces in new developments. Where the site is not suitable for an open workspace given market conditions, LAs should require a section 106 payment to fund open workspace elsewhere.
- Local authorities should consider additional density in mixed-use schemes if the development includes commercial space including open workspace, which complements strategic priorities, as part of planning negotiations.
- The current business rate system penalises small businesses that share space flexibly, as the provider is liable for the business rate on the whole property, and therefore must charge higher rates to cover costs. To encourage growth, local authorities should remove this penalty, by recognising the small business using the space as the ratepayer and calculating rateable value as a proportion of space used. Alternatively, LAs should use existing discretionary powers to reduce business rates for open workspaces that deliver the greatest benefits.
RECOMMENDATIONS TO NATIONAL GOVERNMENT
- National government should devolve control over business rate exemptions to the mayor of London through the local growth and jobs bill. In addition, DCLG should issue guidance on how local authorities can use discretionary powers from 2017 to offer business rate reductions to open workspaces. Local authorities should be encouraged to do so where evidence of benefits is strong, particularly in cases where sharing facilities means small businesses effectively pay rates (as they are passed on through rent).
- National government should devolve to the mayor full flexibility over permitted development rights, including powers to set the exemption for the CAZ, Canary Wharf and Tech City, to set article 4 directions on local areas, and the power, in consultation with the boroughs, to charge CIL on developments where they will put pressure on local infrastructure. As a minimum, national government should extend the exemption for the CAZ, Canary Wharf and Tech City past 2019.
RECOMMENDATIONS TO DEVELOPERS
- Include open workspaces in mixed-use and commercial developments. Open workspaces can increase the financial and community value of development through placemaking, cultural, social and economic benefits. For successful workspaces, developers should work closely with workspace providers early on in the development process.
- Encourage ‘meanwhile’ (temporary) open workspaces prior to development, to test the concept and viability of workspace, and to maintain activity in the area during redevelopment.
RECOMMENDATIONS TO OPEN WORKSPACE PROVIDERS
- In order to demonstrate value as a sector, it is important that open workspace providers consistently measure the same outcomes. Providers should measure their impact using our key metrics.
- The Open Workspace Providers Group, which was created as a subcommittee of the London Enterprise Panel, should promote adoption of our key metrics, and gather annually.