Cities Outlook 2011: Annual index reveals UK cities best placed to create jobs and drive economic recovery

Date: 24/01/2011

Many cities are bouncing back from the recession, including some of those hardest hit by job losses – according to the Centre for Cities annual index, Cities Outlook 2011.  But economic recovery is likely to be unevenly spread across the country in the year ahead.  Cities will need new financial and political powers, and some will need additional financial support from central government.

Hull, Doncaster and Northampton, which suffered big job losses during the recession, saw the biggest reductions in unemployment claimant count between March 2010 and November 2010.  These places all saw drops of 1.2 percentage points in the rate of people claiming Jobseekers Allowance, more than twice the UK average (0.5 percentage points).

In Cities Outlook 2011, the Centre for Cities identifies the cities best placed for a private sector-led recovery.

Five cities to watch: Milton Keynes, Reading, Aberdeen, Leeds and Bristol.  These places will be better-insulated from the economic impact of the spending squeeze, and have high potential to create private sector jobs. They have lower vulnerability to public sector job losses and spending cuts, and given the right powers and freedoms could make an even bigger contribution to the national economic recovery.

The performance of our largest cities will remain crucial, with 11 of Britain’s major cities (London, Birmingham, Bristol, Edinburgh, Glasgow, Leeds, Liverpool Manchester, Newcastle, Nottingham, Sheffield) providing more than one in three (37%) of Britain’s private sector jobs.

The report also identifies five vulnerable cities which may not feel the full benefits of national economic recovery for some time: Sunderland, Liverpool, Birkenhead, Swansea and Newport. These places will be affected more by Government spending cuts, given they have low skill levels and levels of business activity, more people employed in the public sector, and more people claiming unemployment benefits.  They will need additional financial support from central government, and a realistic local plan of action.

There will be regional differences in the challenges cities will face as they seek to grow their economies.  For example, seven out of ten of those due to face the biggest welfare spending cuts by 2014/15 are in the North West of the country.

Top and bottom 10 cities for cuts to the welfare bill per capita, 2014/15

Alexandra Jones, Chief Executive of the Centre for Cities, said,

"Buoyant cities like Leeds and Bristol, which have been fast-growing and have lots of private sector jobs, are best placed to lead the UK’s recovery.  It’s time these places had new financial freedoms such as full control over the local business rate, and new powers to raise money.  They could also benefit from having London-style mayors.

“During 2011, the UK cities most dependent on the public sector, and which have seen slower economic growth over the last decade, will find it more difficult to rebalance towards the private sector. These cities will need realistic plans of action to ride out the spending cuts and create jobs – but they will also need additional financial support from central Government.”

Lynn Ferguson, IBM Director for Local Government, said:

"Cities Outlook 2011 highlights some of the specific challenges confronting cities today. Leaders will need to act decisively and collaboratively within their cities to achieve competitive advantage and drive economic growth.

"The 'Smartest Cities' will be those that have an integrated view of the information associated with city systems such as energy, transport, healthcare and water. Those that do will be best placed to deliver improvements in the quality of public services and in the creation of attractive locations for people and business alike.”

For more information, please contact:

Rachel Tooby, Press and Public Affairs Manager, Centre for Cities
020 7803 4316 / r.tooby@centreforcities.org 

Claire Maugham, Deputy Chief Executive, Centre for Cities
020 7803 4315 / c.maugham@centreforcities.org

John Galvez, IBM Media Relations
07734 104275 / john.galvez@uk.ibm.com 

Notes to editors:

Cities Outlook 2011 is available at www.centreforcities.org/outlook11  The Centre for Cities is very grateful for the support of IBM and the Local Government Association (LGA) for this independent report.  Except where otherwise indicated, all views expressed are those of the Centre for Cities and do not necessarily reflect those of IBM or the LGA.

Further data city-by-city on individual rankings is available from th  Centre for Cities’ data website – City Tracker

The Centre for Cities uses the Department for Local Government and Communities definition of a city for the English urban areas included in Cities Outlook 2011 – built up or urban areas with a population of 125,000 or more.  We have used data for Primary Urban Areas (PUA) – a measure of the ‘built-up’ area of a city, rather than individual local authority districts. 

PUA data only exists for English cities. For Welsh and Scottish cities, we have used the corresponding local authority area, with the exception of tightly-bounded Glasgow, where we have defined the city as an aggregate of five local authorities: West Dunbartonshire, East Dunbartonshire, East Renfrewshire, Renfrewshire and Glasgow City. Belfast has been defined as the aggregate of Belfast City, Carrickfergus, Castlereagh, Lisburn, Newtownabbey and North Down.

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

About IBM

For more information on IBM's Smarter Cities initiative, please visit: http://www.ibm.com/smarterplanet/uk/en/sustainable_cities/ideas/index.html

Smarter Cities is a trademark of IBM.

For more information about IBM, please visit: www.ibm.com

About the LGA

The LGA is the single voice for local government. As a voluntary membership body, funded almost entirely by the subscriptions of over 400 member authorities in England and Wales, we lobby and campaign for changes in policy and legislation on behalf of our member councils and the people and communities they serve.  We work with and on behalf of our membership to deliver our shared vision of an independent and confident local government sector, where local priorities drive public service improvement in every city, town and village and every councillor acts as a champion for their ward and for the people they represent.