Unleashing the potential of cities to deliver good, inclusive growth

When the Government makes a public commitment to deliver an “economy that works for all”, we need new ways to measure the new successes it should deliver - something we have long recognised in our Demos-PwC Good Growth for Cities Index.

So what does our latest research tell us? The dominant theme is one of broad-based improvement: every city in the index has improved its score between 2013-15 and 2014-16. This improvement has been underpinned by strong jobs growth, which continued through 2016 and after the Brexit vote. Today, only a few Local Enterprise Partnership (LEP) areas with a strong industrial heritage, still remain below their 2011-13 average.

But there’s a 'price of success', with many high performing cities reflecting declining scores for work-life balance, transport, health and housing affordability. This highlights the ongoing challenges faced by UK cities where economic growth has outstripped infrastructure capacity, with the score for housing affordability falling most significantly this year, followed by transport.

While transport and housing continue to be priorities for policymakers, the increase in the public’s weighting of the health variable in our Index shows the importance of narrowing the gap between economic and social policy an argument already advanced by the RSA's Commission on Inclusive Growth.

As with our 2016 report, the two highest performing cities are Oxford and Reading, with Oxford maintaining its narrow lead. This reflects continued improvement across a range of measures in each of these cities, particularly jobs, income and skills, where cities in less affluent regions typically have lower scores for these key variables.

It’s worth noting, however, that some cities with low overall scores have also seen some of the biggest increases, with Middleborough & Stockton in the top 10 of cities with improved scores.

With inclusive growth high on the agenda, we’ve also looked this year for the first time at the government’s 12 Opportunity Areas, using our Index to assess social mobility. The results are instructive and highlight the roles played by skills and business starts. Against these two measures, we found that most of the Opportunity Areas covered by our Index do not score well.

Our analysis of English Combined Authorities also shows a strong performance in metro mayor cities, with three of these - Birmingham, Middlesbrough and Liverpool - in the top 10 improvers in our Index: Other core cities in the top 10 were Leeds and Newcastle – highlighting the increased pace of recovery in major urban centres in the UK in recent years and the importance of devolution as a driver of holistic place-based policy-making.

For the first time this year we also looked at the four nations of the UK, which shows England and Scotland outperforming Wales and, to a lesser extent, Northern Ireland since 2005-07. Scotland took the top spot for most of the pre-crisis period but England has taken its place since 2008-10, largely driven by stronger scores for jobs and income.

So what are the implications of our research? City leaders, working with business, educational partners and the public, can deliver good growth by:

  • Shaping visions and identities for places supported by local industrial strategies spanning skills, infrastructure, innovation and business growth.
  • Building the case to secure additional fiscal powers as part of a re-booted devolution deals process.
  • Delivering place based transformation, where local and central government and the private sector act together and work collaboratively to deliver outcomes.

The challenge for place leaders is to unlock the potential of the UK’s cities and regions as engines of sustainable, inclusive growth. In turn this means a continued push for devolution which remains a central part of the answer to unleashing the economic potential of the UK.

Only by giving local leaders the ability to control the levers of good growth - particularly skills, transport infrastructure, housing and business support - will cities and regions be able to tailor their approach to economic development to their own unique strengths, weaknesses and potential, and to prioritise investment based on a common, evidence-based vision for local good growth.

For more on good growth in your local city or region, visit www.pwc.co.uk/goodgrowth


Paul Terrington | Head of Regions
Email | +44 (0) 28 9041 5717

@paul_terrington | Linkedin Profile