Economic Development

Economic Development

The former West India Docks had been the beating heart of the local economy for nearly two centuries, with thousands employed directly but many more working in related businesses.

When a heart dies, the body dies and it was no exception on the Isle of Dogs during the 1960s and 1970s. When the docks closed, the local economy started to die as well. First the businesses most directly related to the docks moved on or closed up – ship repair, lighterage, warehousing, haulage. Then the secondary businesses started to disappear – mechanics, caterers, electricians. Finally even the pubs, shops and cafés started to close as high levels of unemployment and low levels of economic activity took away their trade.

When the Canary Wharf project started to rise from the old docks in the late 1980s it was more than just a development project. Canary Wharf represented a new and very different heart for the east end economy but like all transplants it was going to take time for all the arteries and veins to link up properly.

This change, undergone in just two decades would normally have taken  generations of organic evolution.   Aware of the scale of social deprivation in one of the most deprived areas in the UK, Canary Wharf Group’s efforts have been focused on supporting the shift from the area’s hitherto predominantly manually based industry to the emerging financial and service based labour markets.

Canary Wharf Group (CWG) commissioned extensive research into the economic and employment prospects for East London based on the development of Canary Wharf, the new transport infrastructure and the area’s part in the growth of the London economy.  Work undertaken for us since 1998 by the Centre of Economic and Business Research, a leading economic forecaster, has sought to identify both the scale and nature of job growth in London and, more specifically, the Docklands Boroughs and the Thames Gateway.   Subsequent work by Steer Davies Gleave, transport consultants, has sought to identify catchment areas of Canary Wharf employees to assist policy initiatives for improving access both in terms of jobs and transport.

Further research has compared East and West London; looked at employment trends both in London and in the Thames Gateway boroughs through to 2025; reviewed the nature of the London economy and its growth prospects and, more recently, reviewed the impact of Crossrail on a wide range of deprivation indices.

We could have stopped at providing information and research to Government and left them to deliver local economic regeneration. However we thought that a partnership approach would have a better impact.

In a groundbreaking initiative in 1989, during phase 1 of the Canary Wharf development, we set out to help local companies and residents to benefit from the construction works.  To facilitate this, we set up and staffed offices at the edge of the construction site; a Local Business Liaison Office to promote the use of local construction companies for sub-contracts, and a Recruitment Office to encourage local residents to register for construction labour.  This challenged normal practice at the time, as trade contractors tended to bring their own pool of tried and tested sub-contractors and labourers along with them.

For information on our extensive programmes to help local people access direct employment opportunities on the Wharf see the Employment and Training section.

Considering the challenge involved in this new approach of “persuading” construction trade contractors to use local companies and labourers, the results were remarkable. Over £48 million worth of business was placed with local companies, £18 million of which was with Tower Hamlets companies, and over 500 Tower Hamlets residents gained construction employment on site.

Such was the impact of this initiative that Bovis, who worked closely with us on construction issues, successfully adapted a similar approach on their contract to build the huge Bluewater shopping development in Kent. The Local Labour and Business in Construction concept is now used to varying degrees by many large developments today and has become a model for such major schemes as the London 2012 Olympic Games and the Crossrail railway project.

Support for Local Business

When the second phase of major construction started at Canary Wharf in 1997, a more comprehensive and permanent programme to help local businesses was created. 

CWG set up a dedicated Local Business Liaison Office (LBLO) with just one member of staff at the start. The idea was very clear – break down the barriers which prevented local small and medium sized enterprises (SMEs) from bidding for and winning contracts on Canary Wharf projects – and contracts for Canary Wharf tenants.

The LBLO Manager Gay Harrington, working at first from a portacabin on one of our development sites, set up a very simple system. She talked to local SMEs who might be able to take on work, for example on electrical jobs, to find out why they were not bidding for contracts. She then talked to construction managers to find out why they were not using local SME suppliers.

Typically the problems were only with paperwork and process and sometimes with the size of the jobs – not with the quality or price of work. So while our construction managers agreed to reduce the size of contracts, and the amount of paperwork needed to put in a bid, the SMEs were encouraged to develop Health and Safety policies, Environmental Policies and invest in the IT and training necessary to meet Canary Wharf’s high standards. Then when contracts became available, Gay would make sure local SMEs were on the distribution list and actively help them get to the starting gate – after that it was up to them and fair competition ruled.

This very simple but hands-on approach has been outstandingly successful. Since its inception in 1997, the LBLO has helped local companies secure over £615 million of business from Canary Wharf Group and our tenants. Additionally the LBLO with literally hundreds of local companies in membership has become an important business network for east London.

The LBLO initiative was recognised by the Joseph Rowntree Foundation in its Local Labour and Business in Construction “Good Practice Resource Book” in March 2000 and our Local Business Liaison Manager was invited to address a national Local Labour in Construction conference.  Since then the LBLO advised the Corporation of London, the GLA, the London Olympic Games  and Sunderland Social Enterprise in the setting up of their local procurement projects.

More recently, at the request of the London Development Agency, in partnership with the Five Olympic Host Borough Partnership, the London Thames Gateway Partnership and East London Business Alliance (ELBA), CWG has extended the LBLO’s service across the ten London Thames Gateway boroughs in an extended joint venture project called East London Business Place (ELBP).  ELBP aims to help businesses in this sub region to compete for contracts arising from major developments across the Thames Gateway.

ELBP, under the directorship of CWG Social & Economic Development Manager Gay Harrington, started in April 2008, and by September 2009 had already secured over £34.5 million of business for east London and Thames Gateway companies.  It has engaged with over 2,500 SMEs, providing a free face-to-face service to improve fitness to supply through a comprehensive events programme, business advice, consultation, policy writing, assistance with tendering, access to contracts and free promotional assistance.

There is a multifaceted return on our investment in this initiative. Of course our work with local SMEs has given us a lot of local support and demonstrates CWG’s determination to be a good neighbour. However we have also found it very useful to have a stable of high quality, enthusiastic and loyal local suppliers able to move very quickly when we need them. This in turn has become a positive selling point to potential Canary Wharf tenants when they ask about the capability of the local economy to supply them with the services and products a large international business might need. Finally by creating thousands of indirect jobs – the last estimate in 1999 being over 150,000 indirect jobs dependent on the Canary Wharf estate – the LBLO and ELBP are helping to support a vibrant and diverse local economy. That means more people in work, and more people shopping at Canary Wharf, which in turn drives more investment.

In addition to the LBLO / ELBP project, as part of our ongoing partnership with the London Borough of Tower Hamlets, Canary Wharf Group has chaired the Tower Hamlets Business Partnership and is represented on the Board of the Tower Hamlets Partnership: two organisations helping set economic priorities for the local community.

This virtuous circle of economic development goes far beyond what is legally required or expected of a developer – testament to the fact that Canary Wharf takes a very long term view of how to keep the east end’s new economic heart thriving.