During the Covid-19 epidemic, the quantity of office space in England dropped by more than a million square metres, as the work-from-home trend persists despite an increase in the number of illnesses.

According to the Valuation Office Agency, which is part of HM Revenue & Customs, office space declined 2% in the year to March 31 of last year. The drop totals more than 1.67 million square metres, or 35 times the floor space of the Gherkin office skyscraper.

Britain’s economy is expected to outperform every other G7 country by 2022.
With many workplaces either empty or dormant, developers are under growing pressure to make offices more flexible and ecologically friendly in order to adapt to new pandemic-induced work habits and rising environmental awareness.

The office space decrease comes as businesses prepare for an increase in job absenteeism because to the recent spike of Covid-19 cases.

Ministers have been advised to establish “strong contingency plans” to assist businesses in dealing with growing workplace absences, with the government warning that up to a quarter of employees might be absent as the Omicron strain spreads over the country.

During the holiday season, the UK had a record number of daily cases, with the transportation industry, as well as the NHS, already suffering from worker absenteeism.

With people infected by Covid obliged to isolate for seven days, the problem is wreaking havoc on sectors where employees are unable to work from home.

However, encouraging employees to come into work has become more difficult for office-based businesses as a result of the Omicron surge, causing a headache for developers, with office space occupancy levels falling to 10% in England in the week before Christmas, when the government urged people to work from home if possible.

Property experts predicted that the quantity of vacant office space would have decreased even more since March as firms prepare for a future of more flexible workplaces, with employees coming in on a rotating basis and so requiring less physical space.

According to Mat Oakley, head of European commercial property analysis at consultancy Savills, the UK would not require as much office space in the future “if high levels of agile working remain”.

“Some of the stock is no longer fit for use,” he explained.

As the year 2022 begins, CBI head economist Rain Newton-Smith stated that companies are ready to collaborate with the government to boost confidence. Clear forward advice for businesses will be critical to preserving employment and growth.

“However, if infection and hospitalization rates continue to rise across the country, the prospect of more restrictions would weigh on companies,” Ms Newton-Smith added.

“The government must continuously monitor the situation and ensure that any new limitations are accompanied by further targeted cash-flow help to the enterprises most in difficulties across sectors [affected].”

Meanwhile, the Federation of Small Businesses reports that late payment of bills is endangering the viability of small businesses (FSB). It is concerned that if nothing is done to address the challenges of late payments, excessive inflation, and growing administrative fees for firms who trade overseas, the population would decline.

Thirty percent of the 1,271 small company owners polled in an FSB survey claimed late payment of bills had grown in the previous three months, while another 8% said they were struggling with various ways they were not being paid on time.

“The small business community has shrunk in size over the last year, and unless action is made now to address the issues it confronts, history will repeat itself.”