Government must not overlook economic challenges facing UK ‘fast growth cities’

A new report by the think tank Centre for Cities calls for greater Government focus on addressing the economic challenges facing some of the UK’s fastest-growing and strongest-performing cities.

The independent report, ‘Fast Growth Cities: the opportunities and challenges ahead’, is published today in association with the Fast Growth Cities group, which represents five of the most economically vibrant, medium-sized UK city-economies in the country – Cambridge, Oxford, Milton Keynes, Swindon and Norwich.

It shows that these cities are playing an increasingly important role in the national economy, with all five places enjoying higher productivity levels than bigger cities such as Manchester and Birmingham. They also have higher than average levels of employment and business start-ups, and are among the fastest growing places in terms of population.

However, the report warns that these cities are facing a number of significant economic challenges which threaten to undermine their continuing economic success in the years to come, including:

• Housing – this is an increasing problem for the Fast Growth Cities, with a lack of new homes leading to higher housing prices and low affordability. Oxford and Cambridge, for example, are the first and third least affordable cities in the UK respectively, which is proving a major barrier to recruiting and retaining workers in those places. Allowing these cities the freedom to borrow through the Housing Revenue Account would enable them to provide more of the affordable housing they need.
• Increasing transport congestion – the Fast Growth Cities all attract large numbers of workers from surrounding areas, resulting in significant traffic congestion problems. The report warns that Government funding for transport infrastructure is too short term to enable the Fast Growth Cities to address this issue, and calls for longer-term funding commitments (such as those available to Manchester and Sheffield)
• Skills gaps – all the Fast Growth Cities are affected by skill shortages to some degree, especially in terms of recruiting workers with the right skill-sets for the innovative industries which these places are home to. Swindon, Milton Keynes and Norwich, for example, all have a lower than average proportion of residents with level 4 qualifications (equivalent to a degree) or higher.

The report calls for greater Government recognition of the opportunities and challenges facing these cities, alongside focused policies to help them address these issues, as part of its ongoing devolution plans.

Commenting on the findings, Alexandra Jones, Chief Executive of Centre for Cities said:

“The Government’s devolution agenda has understandably focused on boosting growth in some of the UK’s biggest city-economies, many of which are punching below their weight economically. However, for the Government to realise its ambitions of building a more productive and higher-wage economy across the country, it’s crucial that it does not overlook the challenges facing the Fast Growth Cities group, which are among the most economically vibrant and innovative places in the UK.

“For these cities to continue to grow, it’s vital that they receive the kind of tailored policy support the Government is putting in place for cities like Greater Manchester and Sheffield. It’s also important that any devolution deals involving the ‘Fast Growth’ cities respond to the specific obstacles and opportunities they face. If they are included in wider regional deals, those agreements should retain a strong urban focus, to make the most of the economic characteristics and strengths of these cities. This should be a key consideration for the Government as it extends its devolution agenda in the coming years.

Cllr Peter Marland, Leader of Milton Keynes Council, said:

“The Fast Growth Cities in combination are critical to addressing the UK’s productivity challenge and its ability to compete globally for knowledge economy jobs. But our success is now producing challenges such as high housing costs, which act as a major barrier to recruitment and retention of skilled staff for local employers.

“We need the flexibility to provide local solutions such as more homes for social rent and better arrangements for infrastructure assembly so we continue to deliver to the benefit of our communities and the national economy”.

ENDS

For more information or a copy of the full report, please contact Brian Semple, Press Manager for the Centre for Cities, on 0207 803 4316 / 07595 439 638 or b.semple@centreforcities.org

NOTES TO EDITORS

Centre for Cities is an independent, non-partisan research and policy institute, dedicated to improving the economic success of UK cities. We are a charity that works with cities, business and Whitehall to develop and implement policy that supports the performance of urban economies. We do this through impartial research and knowledge exchange. For more information, please visit centreforcities.org.