Reducing the costs of success: What industrial strategy should look like in successful cities

The costs of growth, such as high property prices, congestion and air pollution, need to be managed to help sustain success in our most buoyant city economies

This briefing forms part of our series on the industrial strategy and looks at how successful cities can manage the costs of growth such as high property prices, congestion and air pollution.

A number of UK cities, mostly in the Greater South East, are already strong economic performers and make an important contribution to the national economy. But their success comes with costs too, such as rising commercial and residential property prices and increasing congestion and pollution. While these costs play out across all cities, managing their impacts in successful cities in particular is necessary if these cities are to continue to make their important contribution to the national economy in the coming years. Failing to do so may mean that these costs start to drag on future economic growth at the local and national level.

For cities to better manage these costs, this paper offers a range of policies for national and local decision-makers:

National policy

  • Target house building in those places where demand is highest (as revealed by housing affordability figures), rather than setting broad targets for the country as a whole.
  • Follow through on the commitment to fund Crossrail II to help continue to improve London’s transport network.
  • Give TfL style powers to other transport bodies in city regions with a mayor to enable them to better manage and invest in the transport systems within their cities.

Local policy

  • Put a spatial plan in place that understands and reflects the roles that different parts of a local economy play. This will need to set out where new housing and office space will be provided, with the aim of providing sufficient supply of new property where it is required to help manage the increases in costs resulting from strong demand. Doing this allows housing and transport policy to be integrated so that new infrastructure can be planned to open up new housing sites where they are needed.
  • Learning from London, consider the introduction of congestion charging or road user charging to help manage demand for limited road space. Any proceeds from such a scheme should be used to reinvest in public transport to help link workers to jobs.
  • Where air pollution is a particular problem, introduce a low emissions zone to tax the use of high-emissions vehicles.