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11/01/2017

Planning policy is key to stemming UK brain drain

Too many graduates gravitate towards London, at the expense of other parts of the UK, says Alexandra Jones

One of Theresa May’s first acts as prime minister was to outline plans for an economic and industrial strategy to boostgrowth “up and down the country”, and building “an economy that works for everyone”.

This rhetoric was driven by concerns about economic divides that have intensified following the referendum vote. The issue was echoed in the Autumn Statement, when the chancellor pledged to tackle “damaging imbalances” in the economy.

One of their top priorities should be tackling the UK’s brain drain, which is resulting in many UK cities losing the high-achieving graduates critical to driving growth and jobs across their local economies to London.

A new Centre for Cities report reveals that a quarter of all new graduates from UK universities in 2014 and 2015 were working in London within six months of finishing their degree – five times more than in Manchester, the second most popular city for new graduates to live in.

Moreover, it shows that the capital is outperforming other cities in attracting the UK’s most talented graduates in particular. In 2014-15, London attracted over a third of new Russell Group graduates with first-class or upper-second class degrees who moved for a job, and more than half of new Oxbridge graduates.

“A quarter of all new graduates from UK universities in 2014 and 2015 were working in London within six months”

The biggest factor influencing the brain drain was not high starting salaries in the capital, but the chances that it offers for career progression. While London has the second-highest graduates’ wages in the country at £25,000 a year, this was not much more than the average across UK cities (£23,261). A more important draw for graduates is London’s vast labour market, with nearly 4.5m jobs on offer, from the bottom to the top of some of the most world’s most innovative and productive firms.

For policy-makers tasked with driving growth across the nation, the key lesson from these findings is that specific policies to encourage graduates to move to or stay in a place (such as wage subsidies) are unlikely to work. Instead, city leaders must focus on strengthening their economies by investing in transport, housing, innovation and enterprise, and then communicating this. This will help to generate more graduate jobs and chances for career progression, making places more attractive for high-skilled people.

Such policies will ultimately have the greatest impact in halting the brain drain, and should be the main focus for local leaders trying to attract more high-skilled workers. Boosting the economies of cities across the UK should also be a top priority for central government.

Alexandra Jones is chief executive of Centre for Cities

Image | Shutterstock

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