Annual index shows recession has widened gap between UK cities

Date: 18/01/2010

The recession has widened the gap between UK city economies.  Cities that were already suffering before the recession such as Barnsley and Stoke have been hit hardest, according to Centre for Cities' annual economic index, out today.

Over the past two years, the difference between the two cities with the highest and lowest shares of residents claiming Jobseeker's Allowance - Hull and Cambridge - has nearly doubled.

Cities Outlook 2010 finds that, as we move out of recession, the UK will face an uneven recovery.  Already-robust city economies like Brighton are more likely to grow stronger, leaving others like Doncaster further behind.  This raises tough questions about how they can carve out a future that's economically sustainable.

Five big hitters:  The turnaround of our largest cities will be critical to the national recovery.  More than one in three jobs (39%) in England is based in just five cities - Greater London and the City Regions of Manchester, Birmingham, Leeds and Liverpool.

Five to watch: Brighton, Milton Keynes, Reading, Cambridge and Edinburgh have the right ingredients to succeed after the recession has passed.  They have strong private sectors, high levels of entrepreneurship, highly educated workforces and large shares of knowledge-intensive jobs.

Ranking out of 64 cities in brackets
* Concentration of knowledge intensive jobs are ranked out of 63 cities

Brighton added the highest number of private sector jobs over the past decade -  an extra 20,000 jobs.  Over a third of its workforce is graduate-level - and one in five of its jobs are part of the knowledge economy.

Five with a tough outlook: Other cities, such as Stoke, Burnley, Barnsley, Newport and Doncaster, with their weaker business base, have a much tougher outlook.  These cities all lost private sector jobs over the pre-recession decade.  Their rate of business start ups is low and many of their residents have no qualifications.

Ranking out of 64 cities in brackets
* Cities with the highest percentage of residents with no qualifications and private sector gains/losses as % of 2008 jobs are ranked out of 63 cities

Between 1998 and 2008 Stoke, for example, saw a net loss of over 20,000 private sector jobs from its economy.   One in five of its population have no formal qualifications and the city has a low rate of entrepreneurship.

As the political parties gear up for the General Election, the Centre for Cities is calling on the party leaders to recognise that the economic recovery will be very uneven.  The UK may well be emerging from recession.  But many cities will continue to feel the effects of the downturn for years to come, especially those with a weak private sector. 

Over the next Parliament the new Government will need to address the position of struggling cities.  In a tight public spending climate constructing shiny new buildings is not the way forward.  Struggling cities first of all need to fix the basics - improving their schools, adult skills and public transport.  Only then will businesses want to invest and create jobs. 

Dermot Finch, Chief Executive of the Centre for Cities, said,

 "We face an uneven recovery.  The national economy may be emerging from recession but cities like Brighton are likely to recover more strongly than the likes of Barnsley. 

"Party leaders need to wake up to the reality that some cities will still feel in the middle of a recession until well after the election.  The next Government needs to help these struggling cities fix the basics - like improving schools and public transport so they can attract new business and jobs." 

Cllr Margaret Eaton, Chair of the Local Government Association, which supported Cities Outlook 2010 said,

"The recession is affecting different parts of the country very differently to others, which underlines how a national, one-size-fits-all solution to getting us out of the downturn simply isn't going to work. The fastest way to move from recession to recovery is for more decisions about the economy to be made at a local level, which means councils continuing to work with local people and businesses." 

For more information, please contact:

Rosamund Taylor, External Affairs Manager, Centre for Cities

020 7803 4316

Mobile: 07876 175 426

r.taylor@centreforcities.org

Notes to editors:

Cities Outlook 2010 is available at www.centreforcities.org/outlook10

Further data city-by-city on individual rankings is available from the Centre for Cities external affairs office.

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 2010 - 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.

Cities Outlook ranks the economic performance of 64 of the UK's largest cities and towns.  This year's report also includes an analysis of the economic performance of the City Regions, a wider definition of urban areas and a summary of City Regional devolution to date.

Cities with the lowest and highest increases in JSA claimant count rate in November 2009, compared to February 2008

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.

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.