The findings prompted the business lobby to call for urgent action on the recommendations of the London Finance Commission, which reported in May. Chaired by Tony Travers, this recommended the devolution of property taxes and borrowing powers to London’s city and local government, allowing it to adopt a more strategic and long-term approach to the capital’s infrastructure needs.
The latest instalment of the CBI/KPMG quarterly poll found that more of London’s businesses are planning to expand – 62% compared with 53% in December – but more are looking to establish new bases elsewhere. Whereas in December 54% of the businesses surveyed said they were planning to expand in London, this had dropped to just 29% by late spring this year.
High operating costs, housing shortages and transport challenges emerged as businesses’ biggest concerns.
Sara Parker, CBI director London, said the survey’s findings were a ‘wake-up call’.
She said: ‘It’s encouraging that more London firms plan to expand but worrying that fewer expect to do so in the capital.
‘Some of the perennial challenges of doing business in the capital, like high operating costs, housing shortages and transport challenges, threaten to undermine investment confidence.
‘We urgently need to translate some of the good work that has been done on paper, in the Mayor’s 2020 vision, the Roads Taskforce and by the London Finance Commission.’
Matt Lewis, London partner for KPMG’s national market practice, said, with London’s population expected to grow to 10 million by 2030, businesses needed to be confident that the city’s infrastructure would improve.
‘The cost and availability of housing also needs major attention, especially for smaller businesses which need to attract skilled individuals to what is increasingly becoming a very expensive city to live in.’
When asked about their concerns, London businesses cited lack of economic growth as top of the list (65%), following by uncertainty about global economic prospects (53%) and the lack of a clear government strategy to deliver growth (47%).
A total of 138 London-based businesses took part in the survey, which was conducted in late April and early May this year.
