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Stay behind after class, City Growth Commission – you too, Jim O’ Neill

Stay behind after class, City Growth Commission – you too, Jim O’ Neill

🕔21.Jul 2014

Mike Loftus takes Jim O’Neill and co gently to task for a spot of terminological inexactitude – and underlines the truth that Birmingham office costs are not higher than Manhattan’s (they might have been in 2004, but there was some odd stuff going on then).


You know the one that goes “a lie can be half way around the world before the truth can get its boots on”? It really should go on to say that having made good its escape the lie has an exasperating tendency to keep dashing back into view just to thumb its nose in your face.

I mention this because I see that the tired old statistic to the effect that Birmingham’s office costs are 40% greater than Manhattan has popped up again. This time in a report titled Connected Cities produced by a group of very eminent folk styling themselves the City Growth Commission. It also poked its head above the parapet almost exactly a year ago – then it was in a report by the bright young people of the highly regarded Centre for Cities. The fact that there is some overlap between the Centre for Cities and the City Growth Commission in personnel terms could well be of some significance in all this. The finger print powder may be required.

Last time round the Chamberlain Files kindly provided me with a soap box to clamber onto in order to refute the said statistic – which rebuttal appears to have been ignored. Let’s have another go – but I am getting to an age where it is unseemly and contrary to good health and safety practice for me to be teetering regularly on soap boxes. I really don’t want to have to do it again in another twelve months. So listen up.

This Birmingham/Manhattan thing – let’s call it a terminological inexactitude for sale of diplomacy – first saw the light of day in an academic paper written by Professor Paul Cheshire and colleagues from the LSE which was published in 2007. The paper is not about international comparative office costs at all. Its focus is on the impact of planning and regulation on office costs and the Birmingham/Manhattan reference is a neat throw away line in the opening paragraph to engage the general reader. And as later analysis in the paper is well furnished with equations along the lines of “RT= (V/MC) -1” and lots of much more intricate stuff in a similar vein, the general reader is grateful for the relief afforded.

The Birmingham/Manhattan statistic is sourced by Cheshire to work by the chartered surveyors, King Sturge, itself published in 2004. It was in fact that year’s version of an annual report comparing office occupancy costs in a hundred or more business centres across the world. My scrambling though the internet has failed to throw up a version of the King Sturge report but I have a vague recollection of having seen it in the past – maybe the vast archive of King Sturge disappeared when the firm itself went.

In any event I am sure it said what Cheshire reports. Other international surveyors carry on the good work of these international comparison exercises however – CBRE for one. I have looked at their reports for the last few years and discover – not to my utter surprise – that they find that office occupancy costs in Manhattan are now materially higher than in Birmingham. I even managed (is there no end to my unstintingness?) to turn up data for the year 2000 which tells me that Manhattan was then more expensive than Birmingham.

So what was going on in those very early years of the twenty first century that the King Sturge work picked up? Well, another fifteen minutes on line reveals that the commercial property market in Manhattan was in utter crisis for a few of those years. Those old enough might just recall the cataclysmic events of 9/11. Rents were tumbling as firms sought to relocate out of the central area – the City authorities responded with all manner of incentives to keep business where it was in the wake of the Al-Qaida assault on the City. It was in short an extremely abnormal time and market. Maybe all that the King Sturge data reflects is this extreme situation. (None of this by the way has any real bearing on Cheshire’s paper).

The Birmingham/Manhattan statistic stumbled blinking back into the light a year ago (to thumb its nose at me) as it seemed to re-inforce a point Centre for Cities wanted to make. The City Growth Commission report gives the statistic some typographic splendour – printed in red, capitalised and centred – to conclude one of its key sections. I myself am fully convinced of the wider policy argument they want to make in their work, but one can’t help but wonder about some of the other supporting evidence . . .?

The City Growth Commission is chaired by Jim ‘BRICS’ O’ Neil – the great acronymiser himself – and he has some very eminent people sitting alongside him. Maybe we could have them all – in the style approved by the just departed Secretary of State for Education – to learn by heart the simple phrase ‘ Birmingham office costs now are not higher than Manhattan’s (they might have been in 2004 – but there may have been some funny stuff going on then)? Maybe copy out fifty times. Pretty please?

Mike Loftus is Director of News from the Future and the former head of Locate in Birmingham. 

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