London: a city known across the world for its culture, landmarks and – crucially – its business prowess. For decades, having a London postcode at the end of your company’s HQ address has been seen as a mark of distinction, a step up on the journey to success, and a door opener by virtue of your proximity to both corporate and political leaders.
Yet the latter are increasingly pushing for a more regional approach to decision making, with Prime Minister Andy Burnham making no secret of his desire for extensive devolution. So, with political ambitions firmly focused on bolstering local powers, can the leaders of the business world learn from this? Or is London set to reign on as the corporate capital, casting a shadow over the rest of Great Britain?
Why London?
Much like eyes drawn to the largest, brightest star in the night sky, it is easy to see why London has been lusted over for decades. Its advantages are many, and its success is plentiful: the capital houses almost 20% of all VAT or PAYE registered businesses in the UK and generates more than 22% of its GDP, despite only 15% of the population living there.
The city certainly has advantages for business leaders: its established global reputation for one, unrivalled transport links including numerous international airports, and of course the buildings of Whitehall and their all-important inhabitants. But if we treat the public sector as one huge and complex organisation, its bosses are making the case that decisions can be made, services run, and departments managed from anywhere – surely that applies to any private sector business, too?
Why look elsewhere?
There is a very obvious disadvantage of locating a business in the capital, namely the price. Not only could office rents in central locations set you back more than £100 per square foot, according to Knight Frank, it also means any staff required to attend in-person regularly face either a lengthy commute or much higher house prices (ONS figures show the average London home costs £554,000 – more than twice the UK average of £270,000).
And on that subject, the rise of hybrid and remote working in recent years gives even more weight to the argument that businesses do not have to be based in London to thrive. The normality of communicating online rather than face-to-face means those pricy capital offices are being used less and less, whether for in-office working or for meetings with clients and stakeholders.
Technology has given businesses a much more level playing field wherever they are based, and that sort of geographical freedom also means being able to access a much wider talent pool. It also means people, information and infrastructure no longer need to be cited in one place – with digital tools not only changing how businesses operate, but also altering where they need to operate. Moden infrastructure allows businesses to take advantage of regional talent, to be close to regional clients, to lower their costs, and to site themselves in a place which works for them, rather than defaulting to London because that is what everyone does.
Boosting regions, boosting business
The Government estimates if all England’s major cities performed at the level of comparable international cities, the economy could be up to £55b larger every year. Devolution and its associated funding is set to boost the powers and fortunes of the region’s public bodies – and a simultaneous show of confidence from the private sector would undoubtedly help raise regional success even further. Put simply, companies can have a real say in the fortunes of the rest of the UK by making considered choices about their location, rather than seeing the capital as the be all and end all.
It is a decision many more are making, with the CBRE reporting 6.5m square foot of office space was rented outside of London and the South East in the 12 months to Q2 2025 – 2% above the ten-year average, and representing a 3% year-on-year increase.
London will ultimately be the right destination for some new and expanding businesses, of course, but it does not have to be the answer for everyone. And, at a time when the country’s leaders are casting a spotlight across the UK, perhaps it is worth the private sector looking at all of the places lit up by that beam of light. London might be bright, but there are plenty of places where businesses can shine.
