Andrew Carter is the Chief Executive of Centre for Cities
With the economy set to be a key battleground in the General Election this May, our new Cities Outlook report will provide some sobering reading for all the parties involved. While the headline national figures on growth and jobs have picked up in the last year, the longer view reveals that the UK has increasingly become a two-tier economy, with successful and dynamic cities in the South leaving the rest in their wake.
Cities Outlook shows that for every 12 net new jobs created in cities in the South of England between 2004 and 2013, only one was created in cities elsewhere – a staggering gap. In Milton Keynes and Cambridge, there were over 15 per cent more jobs at the end of the decade, while in Rochdale and Gloucester there were over 10 per cent less jobs than in 2004.
Over the same period, the net number of new businesses was almost twice as high in Southern cities, compared with cities in the rest of the UK, and the population in Southern cities grew twice as fast as those elsewhere. Peterborough’s population swelled by 15 per cent, while Sunderland found itself losing residents overall during this period.
These disparities cannot be viewed lightly – they reflect hard truths about the divergence in the performance of city economies, and quality of their labour markets, and skills, education, transport and housing systems.
This is where we find ourselves at the end of a decade in which all three major parties have been in power, and all have made some efforts to prevent this gap from widening – whether through Labour’s Regional Development Agencies and centrally driven targets, or the Coalition’s more local, place-based approach.
The current Government has made notable progress on incentivising local growth through initiatives like the New Homes Bonus and City Deals. But across the 10 year period, too often the range of policy interventions designed to boost growth across the country have suffered from either being too small, too ad hoc or too fragmented to make a real impact against a challenge of this scale.
So what is to be done? As we approach the dawn of a new Government term, it’s time for Whitehall to get serious about affording cities more power to shape the future of their economies. While last year’s ‘race to the top’ amongst the parties on devolution policy culminated in the Chancellor’s announcement of a substantial agreement with Greater Manchester at the end of the year, we are still a long way from being in a position rest upon our laurels.
The deal agreed with Manchester, which affords London-style powers over transport, planning, housing and skills, as well as a directly elected mayor, heralds the best opportunity in a generation to fundamentally kick-start the economy of one of our once-booming large Northern cities – and make some headway against the dominance of those in the South.
And yet, while it represents a significant step forward, it remains vital that similar arrangements are extended to other city-regions in the North and elsewhere if they are to be able to drive their individual, and collective, economies forward. After all, as the over-representation of Southern cities at the top of the league in Cities Outlook shows, there are enormous benefits to be gained through a virtuous circle of agglomeration, connectivity and prosperity.
The next Government must also go further to ensure that the devolution of strategic powers is accompanied by more control over the money that is raised and spent within UK cities. This kind of fiscal devolution will not only enable cities to focus investment where it can best support local opportunities, but also encourage places to find new, more cost-effective ways of delivering public services – a significant imperative given the need to further reduce the nation’s deficit.
The cross-party agitation for change we have seen in recent months lends promise that this election could truly be the game-changer for UK cities policy, and it is true that in many respects the Conservatives have seized the leadership on these issues.
But, as we grapple with the Britain we see in Cities Outlook – one increasingly polarised between progress and decline – there is no doubt that any efforts to build on this record in the next
Parliament must continue to forge a bold new path that moves away from the tinkering around the edges we have seen so often in the past. Only then will the party be able to truly realise its ambitions for a ‘Northern Powerhouse’ and deliver on its long-term economic plan in the years ahead.