With the Draft London Plan due to be adopted in the New Year, a raft of new policies will be brought to the fore in the determination of planning applications. One of these is the new policy on Affordable Workspace (Draft Policy E3), which is the first time there is a dedicated policy to securing subsidised workspace at the strategic level.

Draft Policy E3 identifies that planning obligations may be used to secure affordable workspace at rents maintained below the market rate for that space, for a specific social, cultural or economic purpose.

With the requirement for local plans to be in ‘general conformity’ with the London Plan, London boroughs will now be encouraged to consider more detailed affordable workspace policies assuming there is evidence of local need and viability within their localised areas.

In the past five years, there has been a growing number of boroughs that have already introduced some form of affordable workspace policy, mostly aimed at securing subsidised premises from major office schemes.

The adopted policies come in many forms, with the most advanced identifying a threshold for provision and a minimum percentage requirement based on uplift. For example, London Borough of Hackney seeks 10% of gross new floorspace in the defined commercial areas to be provided as affordable or low cost workspace. Tower Hamlets, Richmond and Islington also specify a minimum percentage requirement.

For others, this requirement is less defined, with loose references to supporting affordable workspace within wider employment policies or forming part of planning guidance. Some local authorities apply this on a case by case basis or are subject to viability and negotiation with developers (i.e. London Borough of Hammersmith & FulhamHaringey and Camden).

Detailed policies are coming forward including Lambeth which applies a 10% rate to office uplift of 1000 sqm and applies varying targets for discounted rates, dependent on location. Islington is due to increase its requirement from 5% on large scale major schemes in Clerkenwell/Bunhill to 10% on major schemes in a wider array of commercial locations.

In the emerging Westminster City Plan 2040, which is also due to be adopted in 2021, there will be no requirement to provide affordable workspace from commercial schemes, although the draft policy does support developments that provide AW within the commercial areas of the City.

However, Westminster recently resolved to grant permission for British Land’s scheme at 5 Kingdom Street, Paddington which contained one of the largest permanent affordable workspace facilities in London (with a minimum of 3,900 sqm affordable workspace plus contributions towards a business support fund).

Affordable workspace provides an opportunity to generate further public benefits from development proposals that can be weighed in the planning balance.

Not only does this provision provide space for small and start-up businesses in London, but it has the potential, under the London Plan, to create unique spaces for a range of sectors, including charities and community organisations, social and educational enterprises or creative and cultural makerspace.

These spaces can bring added character to developments, assist with place-making and benefit the community through increase engagement and enjoyment of the building.

As with any discounted space (housing or workspace), there are viability and design implications of providing this on site and it’s recommended to engage with the Council’s policy and economic teams at an early stage to avoid the headaches of incorporating space into schemes later in the process.

This is an emerging and growing policy and developers will need to consider how best to work with providers and local authorities so that the spaces are successfully integrated within the overall scheme and meet identified needs, thereby bringing benefits to all parties.

If you wish to discuss the implications of affordable workspace on a development site, please contact us as our combined planning, development and viability team would be able to provide co-ordinated advice to the issues at hand.

Image 1- Map showing local authorities in London with affordable workspace or similar policy (blue), emerging policies or guidance (yellow) and no adopted policy (red) (NB - does not include the LLDC or OPDC).