The socio-economic impact of businesses in the railway arches
Use class
FTEs supported
Office
4,000
Total (current occupation)
25,600
Total (if all spaces occupied)
33,800
Source: The Arch Company internal data, 2023. Volterra estimates, 2023. NB: jobs figures are rounded and do not sum to total
Economic activity
5.4
The employment supported by businesses and organisations in the portfolio deliver economic output. This contribution is commonly measured through the Gross Value Added (GVA) of the output delivered by these organisations, defined as the additional economic value created by these organisations. To measure the economic activity of the businesses and organisations in the portfolio, assumptions are obtained based on the average level of activity supported by each worker within a given industry and area of the country. Through this methodology, the activity currently supported within The Arch Company portfolio is estimated to total £2bn in GVA terms each year, with £1.4bn of this figure falling within London.
5.5
5.6
In Southwark, it is estimated that approximately £1 of every £70 of economic activity generated in the borough (1.6%) is through an organisation located within one The Arch Company’s spaces. 42
Tax revenues
5.7
The economic activity supported by the portfolio acts to generate tax revenues for local and national government. By comparing national statistics on GVA in the years 2001 to 2021 with public sector receipts in each year, it can be shown that tax revenues typically account for between 30% and 40% of GVA, through business rates, value-added tax (VAT), corporate, and income tax (among other smaller taxes). 43 Applying these benchmark figures to the GVA generated by businesses within The Arch Company portfolio, it is estimated that currently occupied spaces in the portfolio support between £590m and £790m in tax revenues for the UK government each year. Locally, the direct contribution of The Arch Company portfolio can be felt through its generation of business rates payments for local authorities. Using estimates of the level of business rates payments for local spaces, 44 The Arch Company portfolio is estimated to generate £42m of business rates payments each year. £21m of this figure is estimated to be generated in the six local authorities of Southwark, Lambeth, Tower Hamlets, Wandsworth, Manchester and Hackney, with £6.8m of this figure being retained by local authorities. Table 5.2 breaks down these figures for each of the six case study areas, presenting the retained business rates and contribution to the local authority’s budget for each area.
5.8
42 Estimated GVA supported in The Arch Company space in Southwark totals £320m per year, with Southwark recording a total GVA of £22bn in 2022 in ONS, 2024. Regional GVA by Industry and Local Authority
43 ONS, 2023. Public sector finances and ONS, 2023. Regional gross value added (income approach). For an example of the application of this assumption, see DfT WebTAG (2022) guidance for the appraisal of transport interventions.
44 And after accounting for the business rates discounts given to small businesses and charitable organisations.
22
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