Unlocking the prosperity of the UK's core cities
A range of UK government initiatives seek to rebalance the country's urban-based economic growth on major cities other than London. Zoe Green assesses the field.
The gravitational pull of London is not a phenomenon shared by other large British cities which are trailing much further behind. The Centre for Cities' Cities Outlook 2014 recently found that “four fifths of all net jobs created since 2010 are in London” and Bristol was the only city outside of London that consistently performed economically better than the national average. There is therefore a risk that the prosperity gap between the capital and second-tier cities — the UK’s core cities — will continue to widen. The question is what can be done and how can we address this gap?
The Core City Context
The Cities Outlook report made clear that the next largest cities below London such as Birmingham and Manchester are performing at a level lower than should be expected of large UK cities, that they “should be making a much larger contribution to the national economy than is currently the case.” A point reiterated in a recent research report by Liverpool John Moores University which identified that second-tier cities in the UK significantly underperform compared to their European counterparts. The UK’s big cities are evidently falling behind and require serious attention to ensure both local success and a spatially balanced UK economy.
In the midst of these underperformers, Bristol stands outs. The Bristol metropolitan area is the strongest performing and most economically resilient major English city outside of London. Bristol is the city with a high employment rate with 73% (in comparison to Manchester with 68% and Birmingham 63%), a highly skilled workforce with 38% of residents with high level qualifications (Manchester: 33%; Birmingham: 26%) and relatively high wages with a weekly average of £464 (Manchester: £451; Birmingham: £440). The city has also benefitted from a number of infrastructure projects, including £500m improvements to the Great Western Mainline that links London to Bristol by train.
Now other major English cities stand to benefit from better railways. The government is introducing high speed rail in the UK to reduce travel times between London and cities in northern England (and beyond in future phases) and boost economic growth. High Speed 2 (HS2) will link Manchester and Leeds with London and Birmingham via a Y-shaped route. This also makes discussions about a High Speed 3 (HS3) route linking Manchester and Leeds even more important. The chancellor and prime minister have both recognised the need for spatial rebalancing, so perhaps now is the time for discussion about London’s future role as opposed to it being an afterthought to the policies which will actually have an impact.
It’s therefore unsurprising that the spatial rebalancing discussion is raging in the corridors of Whitehall. In his budget speech the chancellor announced that a new balanced economy is required where we “save, invest and export … where prosperity is shared among all sections of society and all parts of the country”. With HS2/HS3 decades off, action is needed now through a traditional policy approach. The government is therefore aiming to push out prosperity from "one corner of the country" (London and the South East) to other large UK cities through a variety of localised initiatives, such as "city deals" and "growth deals".
A New Spatial Grammar
"City deals" aim to give greater power and resources to core cities. They were announced by the coalition government in December 2011, and by February 2013 28 cities had joined the scheme, lured by the promise that the local authorities would receive greater autonomy from central government. The government also announced a package of complementary "growth deals" in July 2014 to provide £12bn of funding to local governments to support this process and enable them to invest in local businesses, creating jobs, building new houses and improving infrastructure. It has however been criticised by the Labour opposition for not going far enough. With a national general election next year Labour are pledging to raise the total to £30 billion to support an “economic devolution” plan that would transfer even more power and funding to core cities. For the moment, however, even the current government’s plans seem to be wavering. Having verbally committed to increasing the funding available to £15bn, senior civil servants in the treasury stated that the chancellor’s “support for the principles and direction of the plan did not stretch to a commitment to the £15bn investment plan proposed by the five cities.”
In Kaleidoscope City, a hugely influential collection of essays published earlier this year to mark the centenary of the Royal Town Planning Institute, Cambridge University’s Peter Tyler, Ron Martin and Ben Gardiner argue that the UK requires an entirely “new spatial grammar” which allows northern cities to have access to resources (for investment in key infrastructure, skills, business assistance, innovation and the like) from both the public and private sector that London has been able to secure in recent years. This would see nearly £50bn-worth of funding being made available and state economic policy redirected to northern cities, a significantly greater financial and policy commitment than either the coalition government or Labour opposition are offering. It’s a message which broadly reiterates Lord Heseltine’s No Stone Unturned review which argued for a greater devolution of funding from central government to local areas (via local enterprise partnerships) so that government investment in economic development is tailored “directly to the individual challenges and opportunities of our communities”. There is therefore a body of recognition amongst expert that a significant amount of money should be put into a single pot to invest skills, infrastructure, employment support, housing, regeneration and business support.
An Uncertain Future
This is a big issue and Lord Adonis sets out why this is important in his report Mending the Fractured Economy, where he argues that UK economic recovery depends on growth and jobs being spread across all regions of the UK. He states that local economic partnerships (LEPs) — voluntary partnerships between local authorities and businesses — should be “empowered with larger devolved budgets to promote better skills, infrastructure and economic development, in return for credible growth plans.” However, only London has developed any real authority in the mayor and it is clear that many of the LEPS are lacking in power, scale and resources to effectively foster the economic growth that is needed to economically transform the UK’s big cities outside of London.
This is not a question of stunting London’s growth, but about the ways in which we can unlock the growth of the other big cities. We need to explore the ways in which infrastructural and financial improvements (including devolution and centralisation) can support areas outside of London through proactive policy interventions. In driving this forward there will be a need to deliver a mixture of short-term policy interventions and long-term investment interventions in major infrastructure projects.