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01/06/2016

Northern Powerhouse cities less productive than European counterparts

Words: Laura Edgar
Rhine-Ruhr area map

The government’s Northern Powerhouse will only succeed if it focuses on boosting productivity in underperforming Northern cities, says a new report.

The report, Building The Northern Powerhouse: Lessons From The Rhine Ruhr And Randstad, by think tank Centre for Cities, considers these regions and their productivity. The government has cited them as models for the Northern Powerhouse.

Alexandra Jones, chief executive of Centre for Cities, said the government’s initiative has the potential to have a “huge impact in addressing the North/South divide, but only if it maintains its original focus of boosting productivity in major Northern cities such as Manchester, Leeds and Newcastle”.

Jones continued: “These big urban areas have the most potential for growth in the region, but are currently underperforming, especially in comparison to cities in more successful areas such as the Rhine-Ruhr and Randstad areas.”

According to the report, the most productive city in the Northern Powerhouse is Leeds (£46,575) with productivity measured by gross value adder per worker, considering 2011 statistics. The most productive city in the Rhine-Ruhr and Randtand regions is Amsterdam, producing £75,188.

The report suggests the reason for the success of the Rhine-Ruhr and Randstad regions is not the result of “extensive” connections between cities in these areas “as is often assumed”.

In fact, according to Centre for Cities, inter-city commuting links in these regions are “little better than in the North of England”.

“We can’t build a successful Northern Powerhouse without stronger, more productive cities” – Alexandra Jones

The economic vibrancy of these regions is “driven by the strong performance” of their individual cities, which are “40 per cent more productive” than counterparts in the Northern Powerhouse.

Jones said: “Instead of spreading limited monies and political focus equally across the whole region, national and local policymakers should concentrate most resources on addressing the economic challenges that big Northern cities and their city regions face, as these have greatest potential to deliver benefits for the North as a whole.”

The report makes a number of recommendations for national and local policymakers working to build a successful Northern Powerhouse:

Focus on addressing skills-gaps in Northern cities – According to the research, three Northern cities – York, Warrington and Leeds – are in the UK top 20 in terms of the number of residents educated to degree level. The report notes that 47 per cent of residents have a degree whereas only a quarter of people in Liverpool have a degree.

Strengthening transport networks within Northern cities is a bigger priority than inter-city links – The research suggests that this would have a bigger impact on improving productivity than improving connections between Northern cities.

City-region governance will be vital to an effective Northern Powerhouse – Important policy decisions on issues such as skills, local transport and planning should be at the city-region level. National and local leaders need to continue to focus on finalising city-region devolution deals for major Northern cities.

Building The Northern Powerhouse: Lessons From The Rhine Ruhr And Randstad can be found here (pdf).

Image credit | Daniel Ullrich

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