Most London companies believe the capital is a good or very good place in which to do business, but concerns over skills shortages and the cost of living for staff could drive them away, according to new research.
A survey of 116 London firms, by employers’ group the CBI and professional services firm KPMG, reveals that more than a third are considering, or already have, relocated activities elsewhere in the UK or abroad. This is despite believing that being in London boosts their image and helps with networking and marketing.
CBI director general Sir Digby Jones said tackling skills shortages should be a government priority, second only to making transport improvements.
“A drastic simplification is needed of the confusing array of bodies attempting to provide skills initiatives,” he said. “Employers need a better, clearer service from training providers.”
The cost of living in London is a serious problem for many firms, according to Ian Barlow, London senior partner for KPMG.
“It pushes up wages and makes the city unaffordable for prospective staff,” he said. “Eighty nine per cent thought London was more expensive or much more expensive than other capital cities,” he added.
More than seven in 10 respondents (72%) identified the lack of suitable housing as a barrier to recruitment and retention, while for small and medium-sized companies the figure was 84%.
Employment regulation was regarded as the biggest problem for companies, with 51% citing it as the major obstacle to doing business.