The hidden potential of mid-sized citiesFollow @pwc_ukgov
By Ray Mills, Infrastructure and Government Lead Partner
Before the recession, many of England's mid-sized cities were performing well. For example, between 1998 and 2008 Sunderland, my home town, grew its private sector jobs base by 10.5%, outstripping the national average.
But the economic pressures of late have hit Sunderland and other ‘mid-sized cities’ harder than the likes of London and Manchester. There’s a pressing need to look ahead and answer the question, how can we support the sustainable economic growth of this group of cities?
The launch of Centre for Cities’ report this week, Hidden Potential sees a considered effort to address this very question. The research, supported by PwC and Sunderland City Council identifies some common barriers to the growth of ‘mid-sized cities’. This group refers to any city outside the Core Cities group which share similar economic characteristics and challenges to Sunderland, including Derby, Preston and Wakefield.
We found that the prosperity of some of these mid-sized cities is being restricted by what we’ve termed a ‘weak urban core’. Preston, for example, saw strong private sector jobs growth of over 16% prior to the downturn, yet its city centre declined by almost 3%. The reasons for this might vary from city to city – one example is not enough of the type of office space needed, deterring businesses from locating centrally and hence providing the footfall for shops and restaurants to flourish.
To help mid-sized cities become more attractive to investors and so create the jobs that the UK economy needs, this research recommends that consideration should be given to the establishment of a mid-sized cities fund. The fund could channel both European and national funds as well as private sector sources to finance the regeneration of their city centres.
Such a fund would present an opportunity to attract investment into mid-sized city centres, supporting a connected plan for their economic development. A single fund would create the scale of opportunity required to leverage funding from a number of sources and would reduce the fixed costs of managing the money. By providing a portfolio of opportunities, it would also enable risk to be spread across a number of investments and geographic locations.
There will, of course, be challenges to making this fund work. It would require a change to current investor behaviour and time and effort from the cities involved to show their commitment to work together to assess project viability and to jointly make hard decisions about what and where to invest and when. And beyond this proposal, mid-sized cities should also be working on other supply side issues to encourage business growth and investment. For example, how best to enhance the skills of their workforce to meet the specific needs of business.
Investing in some upfront thinking about how to work together should mean that mid-sized cities will be well placed to make the case for investment from either the public or private sectors. This report makes a strong case that we should not underestimate the potential for our mid-sized cities to fuel the recovery going forward.
Email: Ray Mills
Tel: +44 (0) 20 721 33710