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TfL reviews office requirements as home working ‘here to stay’

26 June 2020
TfL says the virus presents a “unique opportunity” to cut office costs. 




Deloitte says office construction in the capital will slow
TfL says the virus presents a “unique opportunity” to cut office costs. Deloitte says office construction in the capital will slow

 

Transport for London is looking to reduce its office estate as Covid-19 prompts a permanent shift towards more home-working by many of its desk-based staff. 

TfL revealed its plans this week. Many other organisations are undertaking similar reviews and the outcomes have potentially profound implications for commuting patterns nationwide. 

Graeme Craig, TfL’s director of commercial development,  told the finance committee how Covid-19 lockdown restrictions had affected the way TfL’s desk-based staff work. 

“When restrictions in movement were introduced, we immediately went from having some 12,500 people working in our major office hubs to having the vast majority working from home with only 500 people in business critical roles still working in offices.”

Explaining the arrangements as lockdown restrictions are eased, he said: “Aligned to Government and our own advice on using the transport network, we expect all colleagues that can work from home to continue to do so, for at least a number of months. 

“In the interim, the only staff working in an office will be those that cannot work from home, due either to the nature of their work or their personal circumstances.”

Craig said the changes would be long-lasting. “Even as lockdown restrictions are lifted, we expect that the organisation will work very differently. Whilst it is clear that most of our staff want to work from home for a significant portion of the week on an ongoing basis, we recognise that this will not be attractive (or even possible) for everyone. 

“We will need to provide the right spaces for people when they are in the office, supporting activities such as collaboration and project work.

“Clearly this will have a profound impact on our future office requirements in terms of size, location and design. This is a unique opportunity to move to a model of working that delivers substantial cost savings and efficiency gains.”

TfL was already in the process of rationalising its office estate before the virus pandemic. In 2016 it had 37 properties housing 15,000 workstations, with annual operating costs of £83m. Capacity fell to 12,000 at the end of March 2019 through actions such as property disposals, sub-lets, commercial leasing of three freehold assets, and mothballing. 

Craig said in January 2019 that, by 2022, with the sale of 13 freehold sites, annual office operating costs could be cut to £66m and capacity cut to 8,400 workstations (LTT 18 Jan 19).

This week Craig said the new review would cover “our entire office estate to identify further opportunities to add value”. “As well as the head office portfolio, this includes our commercially let offices, offices in operational locations, and sites in our office development pipeline.”

Consultant Deloitte describes  the shift to home working as “the largest workplace experiment ever seen”. “As we settle into the new routines and new working pracrtice is normalised, more people are expected to continue working from home on a regular basis.”

But the consultant said homeworking was “unlikely to herald the end of the office”. “Some businesses will undoubtedly look to remove working to reduce their real estate footprint, while others will seek to future-proof their existing offices wtih ‘de-densification’ likely to take place.

“Industries such as financial services, insurance or the legal sector will find it considerably more challenging to function away from the office due to cyber security risks.”

Discussing the London office market, Deloitte said “we will inevitably see fewer new [office] construction starts”.

Virus may alter capital’s economic geography  

An increase in home-working could change London’s economic geography, Graeme Craig, TfL’s director of commercial development, has suggested. 

“It appears that the pandemic is speeding up existing trends, including increasing home-working and flexible working environments,” Craig told TfL’s finance committee this week. “This is potentially leading towards a so-called ‘polycentric London’ with increasing growth in London’s town centres, and more active travel and greater dependency on digital infrastructure.”

 
 
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