10 years of Good Growth in the capitals of the four nations

November 08, 2018

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By Vince Goode and George Mason

This year’s edition of Good Growth for Cities analysed long term trends in city performance over the decade from 2005-7 to 2015-17.

In the report, we identified London as the top improver over this period. In this blog we look more broadly at the experiences of the capital cities in all four nations of the UK, and consider what has been the key to success over this period?

Figure 1 below shows how London (defined here as the sum of its boroughs, rather than as a travel to work area) has performed over time on our Good Growth index, which is a weighted average of ten variables from income and jobs to housing, health and transport indicators. We found that London was consistently below the UK index average until 2010-12, before accelerating and overtaking the index average score more recently.

How does the experience of London compare to other UK capital cities? Figure 1 plots the performance of London against Edinburgh, Cardiff and Belfast. Over this period, Edinburgh has experienced a gradual and consistent improvement in its score and has remained near the top of our overall UK city rankings. In contrast, Cardiff experienced a decline from 2007-09 onwards as the recession hit it relatively hard, but successfully mirrored the improvement of London until 2012-14, after which its improvement flattened off. Belfast improved its Good Growth score in the immediate aftermath of the financial crisis as housing affordability improved, but has also seen its performance flatten off in recent years.

Goodgrowth20181

So what underpins these overall index trends for these four cities? Figure 2 breaks down the changes in Good Growth scores from 2005-07 to 2015-17 into the individual components of our index (which includes two sub-components for housing and skills, so 12 indicators in total). For each component, the experience in each UK capital is shown relative to the UK city average.

As highlighted in this year’s report, London has experienced a significant increase in the number of new business start-ups since 2005-07, alongside above average improvements in the skills of both 16-24 and 25-64 year olds. In general, other UK capitals have performed at or below the UK average in these cases, with the exception of adult skills in Cardiff, which has also shown a relatively strong improvement.

Goodgrowth20182

There has been a clear price to the success of London over this period, with large declines in both commuting times and the rate of owner occupation. Other capital cities have experienced greater improvements in both the environment and health, with the latter attracting significant weight in our index based on the views of the public (which we use to determine the index weights).

Our analysis of Good Growth over the last ten years has shown the importance of addressing structural issues, such as enhancing local skills levels and encouraging new business development. London has significantly improved in these areas relative to the other capital cities, and although there has been a price to its success, this has so far failed to knock the city of its trajectory of improvement.

Going forward, however, lack of affordable housing and transport constraints could put limits on London’s growth, so increased infrastructure investment in these areas will be critical to sustaining its success. This is also true for other capital cities to varying degrees, though for Belfast in particular generating more new jobs and new businesses will also be critical to future success on our index.