Out of the Crisis, a Chance for a Fresh Start

Thought Leadership

Written by;

Chris Sutton,  Director, Sutton Consulting

For more than six weeks there has been little that anyone has talked about other than the coronavirus and its impact. While the pandemic is far from over, thoughts are now inevitably turning to how and when we come out of the lockdown and start to rebuild our economy.

The challenge is to create a vision for the future that will preserve the old jobs, create new ones and generate the taxes that we will need to pay off the huge burden of extra costs that government has taken on. Our hope must be that the bounce back will be as quick as many analysts say it will.

Lifting the lockdown will be the easy part. Addressing the structural damage and consequent scarring to our economy by the necessary shutting down of so much economic activity will require government interventions that are bold and ambitious in scope. In Cardiff Capital Region the City Deal is an important part of the regional growth architecture, and can bring its local perspective to bear in unlocking pockets of growth and creating strategic drive and leadership.

One of the most striking features of the past few weeks is the massive experiment in working from home that has involved millions of people, particularly office workers. It is hard to believe that this won’t change attitudes in the future towards the practicality of home working, and mould new remote working practices.

On the other hand, predictions of the demise of the office are undoubtedly premature. Many businesses and workers will want to get back into their offices as soon as they can. For all the wonders of Zoom and Microsoft Teams, face to face encounters, whether with clients or colleagues, are still hard to beat.

So I don’t foresee any rapid dropping off in the office market, especially when it comes to the more flexible Grade A office space that has featured so prominently in recent Cardiff city centre developments. However, Grade B office buildings in less sought after locations are likely to fall in value and may drag down the market as a whole. Combined with the shock to our retail and leisure sectors, this may call for a rethink in building use in some of our urban centres.

This is where boldness is called for. We need the ability to change building use more radically and quickly. Relaxation of planning restrictions in certain areas, with more use of zoning and simplified planning, could help to reshape our towns and cities in a way that is more responsive to modern needs. If fewer offices and shops are required, we need to build to be able to convert structures to much needed residential use quickly and easily.

We should use the current crisis as an opportunity to empower local authorities to compulsorily purchase and regenerate large blocks of our town centres to create a more attractive mix of residential, leisure and retail space. Let’s capitalise on this turmoil and build something better, in partnership between proactive local developers and empowered local authorities.

Boldness is also called for in our approach to manufacturing. This crisis has highlighted the re-shoring debate – which was already playing out because of Brexit – both in terms of the risk of long supply chains and what constitutes critical industries. We have off-shored production of critical industries such as PPE to China and seen the vulnerability of this.

There’s an opportunity to be had here, but it requires us to rebuild and exploit local supply chains, using business support and investment in a smart, strategic way. Hand in hand with this is an aggressive approach to industrial sites and premises, to make sure companies have the right premises in the right locations to fulfil their needs.

Linked to location is the question of transport and connectivity. Whether it’s from home working or because they were furloughed, millions of workers have been staying at home and barred from inessential travel. The effect on our transport networks has been spectacular. Towns and cities have seen the disappearance of the rush hour, motorways have become unclogged, revenues for public transport operators have collapsed.

Few, perhaps, will welcome the return of busier roads and dirtier air. But there are bound to be questions about the future direction of transport policy. Should we press ahead with efforts to persuade more people to give up their cars? Will there be the resources for new public transport networks? Whatever the answers, the present quietness at least gives us an opportunity to press ahead with much needed engineering works, whether it’s on the M4 or the Metro, while traffic is at a minimum.

Finally, business rates. Governments at both ends of the M4 have sensibly released most retail and leisure businesses from the burden of rates for this financial year. But this shouldn’t obscure the fact that the system was no longer fit for purpose. This crisis has accelerated the demise of the High Street, and a structural reform of business rates is needed to more equitably share the burden of funding local services between physical and online retailers.

We have gone through a testing time and there are more challenges and difficulties ahead. But there are also opportunities. The pandemic has given us a change to rethink our mindset, challenge assumptions and reimagine how our economy should operate. If we grasp this opportunity there is every chance Cardiff Capital Region will emerge stronger, more competitive and more resilient, and better equipped to thrive in the years ahead.


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