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08/03/2016

Tailor policy for ‘fast growth cities’ to maintain productivity, says think tank

Words: Laura Edgar
Oxford / iStock_000023817808

Government should focus on addressing the challenges facing some of the UK’s fastest-growing and strongest-performing cities, tailoring policies to support them, urges a report.

The report, Fast Growth Cities: The Opportunities And Challenges Ahead (pdf), was published by think tank Centre for Cities in association with the Fast Cities Group, (Cambridge, Oxford, Milton Keynes, Swindon and Norwich).

According to the report, the fast growth cities are playing an “increasingly important” role in the national economy, with all five cities producing higher productivity levels than bigger cities such as Manchester and Birmingham.

The report states that “in all five cities employment has been consistently above the UK average for the last five years” with an average employment rate of 76 per cent, 3 percentage points greater than the UK average.

However, Alexandra Jones, chief executive of Centre for Cities, said that although the government has “understandably” focused on boosting growth in the UK's biggest city-economies, if it is to realise its ambitions of building a “more productive and higher-wage economy” across the country, it is crucial it does not overlook the challenges facing this group of cities.

These challenges include:

  • Housing – The report says this is an increasing problem, with the lack of new homes leading to higher house prices and low affordability. According to the report, Oxford has the “greatest affordability issue” of any UK city, with average house prices 16 times the average wage in the city, “making it even less affordable than London. This acts as a barrier to recruiting and retaining workers. The report suggests allowing these cities the freedom to borrow through the Housing Revenue Account to enable them to provide more of the affordable housing they need.

  • Increasing transport congestion – All of the fast growth cities attract “large numbers” of workers from the surrounding areas which results in significant traffic congestion problems, says the report. It warns that government funding for transport infrastructure is too short term to enable these cities to address the issue. It calls for long-term funding commitments.

  • Skills gaps – All of the cities in the group are affected by skills shortages, the report suggests, especially when it comes to recruiting workers with the right skill sets for industries in these places. It states that Swindon, Milton Keynes and Norwich all have “average or below-average rates” of residents with degree-level qualifications.

In response, the report calls for greater government recognition of the opportunities and challenges facing Fast Growth Cities, as well as focused and “tailored policy support” to help them address these issues, as part of its ongoing devolution plans.

Jones said it is important that any devolution deals involving this group of cities respond to the specific obstacles they face. If the cities are included in wider regional deals, it should “retain a strong urban focus, to make the most of the economic characteristics and strengths of these cities”.

Peter Marland, leader of Milton Keynes Council, added: “We need the flexibility to provide local solutions such as more homes for social rent and better arrangements for infrastructure assembly so we continue to deliver to the benefit of our communities and the national economy”.

Fast Growth Cities: The opportunities and challenges ahead can be found here (pdf).

Image credit | iStock

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