Low number of workers returning to Glasgow city centre hampering recovery

An “extraordinarily low” number of office workers returning to Glasgow city centre is hampering the recovery from Covid-19.

Only one in 12 office workers are back in the city centre.

Guidance to work from home means only “one in 12 office workers” are back in the city and a report to councillors stated Glasgow has been “disproportionately affected” by the pandemic.

Reasons include the “longest and harshest” Covid-19 restrictions in Scotland, a reliance on a regional workforce and low numbers of people living in the city centre.

Sign up to our GlasgowWorld Today newsletter

The i newsletter cut through the noise

Jane Laiolo, group manager for city centre regeneration at Glasgow City Council, said it is a “particularly difficult situation” but told councillors the city isn’t a “sinking ship” and investor demand is high.

“We don’t have the mass return to office that we had all hoped for. Obviously that’s having a major impact on city centre sectors that are reliant on office workers.

“The lack of a residential population in the city centre has further exacerbated this issue, because we just don’t have that local population to support local sectors in the city centre.”

She said the pandemic has accelerated some trends, like the decline of retail, but others, such as hybrid working, are emerging.

“As of right now we don’t yet know the long-term impact of hybrid working. Many office operators are expecting to go forward with a hybrid model, which in turn is going to have an impact on city centre property supply and demand.”

Stuart Patrick, chief executive at Glasgow Chamber of Commerce, said on the “core streets” of retail activity, the number of visitors is “one million down on where it was in 2019”.

The night-time economy has “recovered better” because there is “less dependency on daytime footfall”.

Mr Patrick is concerned that retail is “stuck” with recovery unable to “advance much further” in the months ahead “given some of the constraints on particularly home working”.

As well as a lack of office workers contributing to the situation, fewer students in the city is also having an impact.

Mr Patrick said: “That has a real impact on the labour market, students are a particularly important part of the labour market for retail and hospitality.”

He added: “Some of the evidence showing our office occupancy, and by that we mean how many people are back in offices post Covid, is exceptionally low.

“We are talking about one in 12 office workers back in Glasgow, well below half of what the UK average is.”

He reported the demand for offices is changing, with a “greater degree of emphasis on high quality offices with a lot of circulation space and a lot of communal space”.

The Chamber of Commerce chief executive said the return of office workers and students to campuses would have “the biggest impact on performance levels in the city centre”.

“On the expectation that is still not going to come through very quickly, there is a request for non domestic rates relief to be extended beyond March 2022.

“Particularly in terms of hotels where if occupancy rates stay at the levels they are throughout winter, very high fixed costs for hotels could have quite a damaging impact.”

Responding to a question from Cllr Frank McAveety on the loss of shops in the city centre, Ms Laiolo said there is still “very strong investor demand and interest”.

“We don’t feel that we are a sinking ship here. We are seeing investment plans coming forward, and many of those are going to be made public by the developers and landowners themselves in the coming months.”

She added there is a need to “develop a more mixed use approach to city centre development”.

“We want to move away from mono-use areas like the retail area being too dominated by retail, or the financial services district not having any leisure or retail within it.

“Buchanan Street largely shuts down at 6pm, we don’t have a link between the day and night time economy and we need to provide more of an experiential offer to attract people to stay longer in the city centre and to come and live in the city centre.”

At the meeting on Tuesday, councillors supported a recovery plan for 2022 to 2024.

The plan includes work on reusing empty buildings, promoting district heating systems, supporting the Avenues programme, which is transforming city centre streets, and other active travel projects, including electric vehicle infrastructure.