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20/01/2015

Report reveals two-tier economy

Words: Laura Edgar

The gap between the UK’s best and worst performing cities is getting larger, “creating a two-tier economy of dynamism and decline,“ according to a Centre for Cities annual report.

Given the size of the gap between the cities that are performing well compared with those that aren’t, the report, Cities Outlook 2015 (pdf) calls on all parties in the run-up to the general election to ensure that plans for growing cities include significant fiscal and structural devolution. Additionally, it asks for incentives to encourage cities to support growth and further flexibility on how and where money can be spent.

Considering the UK’s 64 largest cities over the past 10 years, a time during which three major political parties have been in office, the report has found that for every 12 jobs created between 2004 and 2013 in cities in the south of England, one was created throughout cities in the rest of the UK.

Key findings of Cities Outlook 2015

·      The amount of jobs in London increased by 17.1 per cent.

·      Jobs in Blackpool, Rochdale and Gloucester fell by 10 per cent.

·      Milton Keynes saw a population growth of 16.5 per cent.

·      Sunderland’s population fell by 1.4 per cent.

·      Warrington has the highest employment rate, while Burnley and Dundee have the lowest.

·      Milton Keynes has the highest housing stock growth, while Dundee has the lowest.

National growth between 2004 and 2013, the report found, was driven in the main by a handful of cities in the South. The number of jobs created, population and the number of businesses have all increased, while in other cities, young and skilled people have moved away, businesses haven’t grown and employment levels have fallen, all leading to a shrinking economy.

An increase in house prices is, however, the report suggests, threatening the growth of even the best performing cities. Furthermore, the efforts of the government during the past 10 years, such as policy interventions to rebalance the national economy have, Cities Outlook states, failed.

Additionally, while some cities, such as Cambridge, have grown as a result of increased technology in the workplace and “knowledge-intensive businesses”, others have been left struggling to drive growth.

Centre for Cities' acting chief executive Andrew Carter said: “The stark picture the report paints of the enormous gap in the fortunes of UK cities over 10 years underlines why a ‘steady as she goes’ approach must be scrapped. We must move from thinking that bundling up new funding streams with bureaucratic delays, or simply tinkering around the edges with well-intentioned announcements, will be enough to reverse trends that are becoming increasingly entrenched.”

Carter went on to say that all political parties now need to prove their recent pledges involving the devolution of powers to cities and a make a clear plan that will “improve the quality of life throughout the UK”.

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