The Royal Docks: a third international business district for London?
The Royal Docks in east London were left behind by the containerisation of shipping leaving a generation or more out of work. In the wake of the Olympics, planning efforts and business investment is once again focused on the Docks area, though Zoe Green asks whether the much-needed investment will attempt to address the employment needs of this community.
After decades of decline, the Royal Docks in East London are now fast being reconsidered as a hub for commerce and trade, with the Mayor of London seeking for them to become the city's next business district after the City and Canary Wharf.
The 2012 Olympic and Paralympic Games helped to put East London in the spotlight as an investment location, with benefits for the Royal Docks as well. A year on from the Games, there have already been indications of improving investor activity, especially from overseas. There is now a considerable opportunity to harness this renewed interest as a way to drive forward regeneration and reinstate the area as a thriving centre, though the challenge will be to make sure it does not pass by the communities that have languished there since the industrial era.
Rise, fall, rise again
Construction of the first docks in East London began in 1800, with the West and East India Docks serving the needs of trade with the Caribbean. However, as ships became larger requirements changed and it soon prompted the construction of more docks further east. The Royal Albert Dock (1855) and Royal Victoria Dock (1880) specialised in the import and unloading of food. Progress kept moving forward, with ships continually getting larger, resulting in the construction of King George V Dock in 1921. During the first half of the 20th century, the Royal Docks together formed the largest enclosed docks in the world, covering around 122 hectares and specialising in the import and export of food across the globe. An expanding British empire saw demand for trade products increase, which alongside the policy of “imperial preference” (in which Britain offered preferential tariffs to its colonies and dominions) yielded significant commercial success, peaking in the 1950s.
The invention of modern container shipping in 1956 transformed our ability to trade to a greater extent than any other invention of the last century and resulted in yet further demand for larger ports. Likewise, the withdrawal from empire from the 1950s and the resultant loss of imperial preference tariffs caused a decline in the trade with London. Together with the introduction of air freight and entry into the European Economic Community (now the European Union) which changed the composition of trade and shifted much activity to ports such as Dover, each contributed to the radical and perhaps inevitable decline of the docks, now unable to compete on a technological level. The completion of the new, larger, deep water port facility at Tilbury in Essex in 1970 was the final nail in the coffin. Indeed, by the 1970s, the Royal Docks were making a considerable loss (in the region of £9 million per year) and, despite struggling on, were forced to close in 1981. The result was significant unemployment and increasing social deprivation for the surrounding communities which had, for their entire history, been dependent upon the docks.
The London Docklands Development Corporation (LDDC) was set up in 1981 to help regenerate the depressed docklands around Canary Wharf west of the Royal Docks and over the following decades delivered the improvements to transport infrastructure which enabled the creation of this new employment centre. The extension of the Jubilee Line of the London Underground, and the construction of the Docklands Light Rail (DLR) and London City Airport all contributed to the improved connectivity of the area. The result has been that, within the space of a quarter-century, the area has been recreated as a high-density centre of global finance.
Renewed focus on the Royal Docks
Now, just as the docks themselves spread east, so too does the regeneration drive. Crossrail, the east-west rail link that is currently Europe’s largest infrastructure project, will be arriving in 2018, extending past Canary Wharf to the Royal Docks and points further east.
In 2012 the Royal Docks was designated as London's first new enterprise zone, a return to the policy approach which led to the development of Canary Wharf. The enterprise zone status means that businesses locating to this area will benefit from substantial business rates relief, superfast broadband and a streamlined planning process for new developments amongst a series of other benefits. As with the Olympics, however, it remains an approach to regeneration reliant upon an initial cost to the public sector, an approach which becomes increasingly difficult in the present age of austerity. It is, however, undoubtedly attractive to developers and the designation was quickly followed in March 2012 by the announcement of Chelsefield as the developer for Silvertown Quays, a £1.2 billion redevelopment over 20 hectares to the south of the Royal Victoria Dock comprising commercial, retail and residential uses, expected to be complete in 2018.
International interest also remains in the area and the Mayor of London recently struck a deal with Beijing's Advanced Business Park (ABP) that will lead to the creation of a new state-of-the-art business district. The new business centre will initially support Asian and Chinese businesses wanting to establish and expand within the UK and Europe, with a particular focus on high-tech and green industries. It’s also a fantastic location for those with a long-term commitment, being adjacent to the City Airport and University of East London campus. Indeed, when the proposed business district is complete (around 2017), it is estimated that the development will be worth around £6 billion to the UK economy, leading to the creation of some 200,000 jobs and providing an uplift of 30% to the economy of the borough of Newham.
Will the jobs be delivered?
Canary Wharf gives the impression of a booming centre and yet rental values per square foot are significantly lower than in the City of London or the West End. At the same time, there is dramatic interest in prime residential property across the London area from overseas investors, seeking to acquire stable assets at relatively low prices. Therefore despite the rhetoric about a third business district, it is perhaps unsurprising that there are calls for the docks to assume an increasingly mixed-use character. At Wood Wharf, for example, an existing “permission” of 8,000,000 sq ft (740,000 sq metres) of development conceived as “Canary Wharf phase 2” is now being renegotiated to assume a residential-led mixed-use character.
Certainly regenerative and probably beneficial, the revised application at Wood Wharf is undoubtedly motivated by the shifting possibilities for private-sector profit. Whilst this is not an issue in itself, it does however crystallise a key issue associated with the Olympic legacy: the extent to which public-sector investment at Stratford has dramatically increased the attractiveness of the area for private-sector developers, yet who respond with schemes unlikely to the needs of local communities or provide secure local jobs. That opportunity is perhaps to be found further south, around the Royal Docks, which feature at one end of the borough’s “arc of opportunity”, a swathe of over 140 hectares of brownfield land identified for rejuvenation. Indeed, by 2025 it is estimated that a minimum of £22 billion will have been invested in the area, along with the creation of 35,000 new homes and 100,000 new jobs, and the steps are already being taken to achieve this.
Yet, as at Wood Wharf, questions must be asked as to the benefit for local residents. Whilst the quality of the built environment and the level of affluence will undoubtedly be raised across the Royal Docks, it remains to be seen how many of the new homes will be affordable to local people, and how many of the new financial and high-technology jobs will be suited to those local people, many of whom have been left as outmoded as the docks since their decline. These new homes and jobs are an undoubted benefit, but the real test will be to harness the opportunities provided by this development to up-skill these communities and bridge the gap between their existing skill base and the new opportunities emerging, ensuring that the existing social problems are not simply moved elsewhere. This is especially critical given the persistent high levels of unemployment and skills shortage which exist amongst many residents in Newham The latest 2011 census, for example, identified unemployment levels for the borough at 6.9% (in contrast to the London average of 5.2%) and that 20.6% of the population aged 16 and over had no formal qualifications (in contrast to the London average of 17.6%).
The future of the Borough therefore rests on getting people ready for employment by either improving their skills or employability in addition to ensuring that there are the right job opportunities available in the area. One initiative worth learning from is City Gateway, a charity based in Tower Hamlets, the adjoining borough, which addresses the challenges facing the next generation of post-docks residents by focusing on up-skilling young adults to enter the workplace. For those who lack the support which is so often afforded to those from more affluent backgrounds, it builds bridges with employers and helps provide apprenticeships (helping create 169 apprenticeships in 2012). Recognising the much overlooked fact that Tower Hamlets has one of the highest graduate unemployment rates in the country, it also provides programmes to improve interview techniques and CV writing. Many more such initiatives will, however, be required to ensure that local people have the financial and educational ability to remain in the dockland community in which they were raised.
A new role for an old community?
The Royal Docks has historically performed an important role as London’s centre of maritime trade. After experiencing considerable decline, new investment has the potential to establish the area as a centre for trade once again, with the emphasis this time on services. Improved transport connectivity and the construction of brand-new mixed-communities will bring much needed housing, jobs and investment to otherwise relatively deprived parts of Tower Hamlets and Newham. The real question is therefore the cost of this change. It is being delivered as a consequence of substantial public investment, both resulting from the Olympics, the enterprise zone designation and value captured from development elsewhere and reinvested through the Mayor’s community infrastructure levy into Crossrail. This enabling finance will effect change, but we must ensure that this change has benefit for the communities which have historically grown around the docks rather than excluding them and forcing them elsewhere. It is at these communities which the regeneration is targeted and they should not, therefore, become another cost of development. Where a new wave of jobs and investment are planned, these should not simply seek to secure local workers through low-paid roles, but provision should be made to up-skill local people and, following this, open the doors to employment, to ensure they can attain roles in the new businesses.