London's 24 hour economy could grow to £43 billion annually by 2029

25 August 2016 4 min. read

London’s night-time economy got a boost last week, with the opening of the Night Tube. The capital’s night economy has grown steadily in recent years, supporting around 1.25 million jobs and £40 billion in total GVA. The addition of the Night Tube adds around 2,200 new direct jobs and £77 million per year in economic impact by 2029, according to a new report.

The London Underground began its operation 153 years ago, and was the world’s first underground railway. In the intervening years large extensions to the underground were introduced, and today the system provides rapid transport through 11 lines reaching 270 stations and carrying 1.34 billion people per year.

While the London Underground is able to effectively and efficiently support the transport needs of travellers during the day, it has – until recently – closed its doors at night – with bus services taking over to support night travellers. In 2014, Transport for London (TfL) announced plans for a night service on select lines during weekends – around two years later, following upgrades and negotiations, the Night Tube opened last week.

The Night Tube is just one part of wider moves from London’s top to improve the city’s already bustling night-time business, which also includes a current opening for a Night Czar to “champion the value of London’s night time culture whilst developing and diversifying London’s night time economy.” In a new report from EY, titled ‘The Economic Value of London’s 24 Hour Economy’, the consultancy firm looks at London’s night-time economy, a projection for its development and the part the Night Tube plays in the story.

Employment impact of night time economy

London’s night-time economy
The consultancy’s analysis finds that one in eight (723,296 people) work nights. The sector with the largest number of people who work nights is transport and storage at around 107,000 total, this is followed by health and social work, with slightly more than 101,000. Accommodation and food services comes third, with demand supporting more than 97,000 jobs.

The consultancy notes that the capital’s night economy has a broad and deep impact, hosting a range of high-skilled and high GVA sectors – including professional, scientific and technical services, public administration, defence and education.

Economic impact of night time economyThe economic impact of London’s night-time economy stands at between £17.7 billion and £26.3 billion in direct Gross Value Added (GVA) – at between 5-8% of London’s entire GDP, estimated at £325 billion. Adding indirect and induced contributions, boosts night-time GVA to £40 billion. The largest impact comes from the logistics and deliveries sector, totalling almost £3.8 billion in direct economic impact and £7.7 billion in total economic impact. Professional and financial services comes in second, generating almost £3.2 billion in direct economic impact, £1.5 billion in indirect economic impact and £870 million in induced economic impact. Health and social work takes the number three spot, generating £5.4 billion in total economic impact.

Employment and economic impact of night-time economy by 2029

The number of night-time workers in London are on the increase, on the back of prevailing trends, including among others, a younger population, reform of UK licensing laws, increasing two-worker families, and globalisation. Since 2004 the night-time economy has seen the addition of 109,140 new jobs.

The analysts also sought to map out the continuation of the trend until 2029. In total the number of direct night-time jobs will increase by 65,000, while indirect and induced job creation will mean that around 114,000 more people will be working nights by 2029 compared to 2016. The economic impact of the work created will be around £3.6 billion, with an indirect impact of around £1 billion and induced of around £570 million.

Jobs boost from Night Tube

Night Tube impact
The Night Tube will, according to the analysis, have a considerable impact on night-time employment in the capital – up to 2,200 direct jobs created. The largest proportion of those created jobs are in hotels, at 56.4%, followed by the restaurants, takeaways and mobile food places, at 18.1%. TfL expects around 500 jobs to run the Night Tube.

The economic impact of the Night Tube could, considering the multiplier effect, reach a high of £77 million per year by 2029, say the researchers – with £44 million per year generated directly.

“A well-managed 24-hour economy offers an opportunity to rethink how we smooth out demand, particularly around freight, deliveries and road use. In a number of respects, there are encouraging signs. As well as the Night Tube, we have seen the establishment and first meetings of the Night Time Commission and plans to appoint a Night Czar", concludes the firm.