Is London Broke and does it need fixing

18 January 2010Bridget Rosewell

Chief Economic Adviser

Is London broke?

High poverty levels Crowded, expensive, dirty Diverse High productivity Growing Successful

Child poverty higher in London and resistant to change

Higher poverty among adults too

Men less likely to work

Women even less likely to work

And the unskilled find it hard to get jobs

Housing is expensive

On rail too...

And road speeds still falling

Specialisation in productive sectors

Ability to transform itself

A highly productive economy

Huge accessibility

A high end centre

And well spread facilities

Positive trends even after recession

London civilian workforce jobs

Source: Office for National Statistics

Tax levels may become a problem

Because deficits are significant

Large imbalances in public sector spending, which predate current recession

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1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Public sector current receipts (% of GDP)

Total managed Government expenditure (% of GDP)

Debt still not historically high but rapid rises are a real problem

Nor out of line internationally

The challenge

To maintain investment Maintain pressure on long standing and

embedded problems Support the successful