Cities in the South have continued to outstrip their counterparts in the rest of the country over the last 10 years.
Today sees the launch of our eighth edition of Cities Outlook. This year it runs the rule over the performance of our cities over the last decade, a time of boom, bust and recovery and two governments of three different colours.
The last 10 years have seen a great degree of change. But despite this change, one thing has remained constant – cities in the South have continued to outstrip their counterparts in the rest of the country across a range of measures:
These trends have persisted at a time when both the Labour government and the Coalition have pledged to ‘bridge the north-south divide’ or ‘rebalance the economy’. Their lack of success in fulfilling these pledges isn’t for the want of trying. There have been a range of initiatives – some good, many not so good – that have attempted to improve the economic performance of places outside of London and the South East.
But there are three main themes that run through the policy making of both administrations: policies have tended to be small scale, time limited, and most crucially, have kept decision making power within Whitehall, rather than transfer it to cities themselves. The result is that many of the policies of the last decade have been less effective than they might otherwise have been.
Greater London – the UK’s strongest city-region – has been the one exception. It has had some degree of devolution since 1999, with its mayor having powers over the key economic drivers of planning and transport amongst other things. While the level of power wielded by the capital is limited by international standards, it has proved important in allowing London policymakers to respond to the pressures of growth, and to plan strategically for the future.
That’s why the recent announcements regarding devolution to Greater Manchester are so welcome. By providing the city with the kinds of strategic powers and responsibilities that Greater London has enjoyed for over a decade, Greater Manchester will have more freedom and flexibility to tailor policy to tackle the challenges it faces and take advantage of opportunities within the national and global economy.
But if we are truly to see cities outside of the Greater South East punch their weight, then the Greater Manchester devolution deal must be followed by action to extend these kinds of arrangements to other cities. All are equally constrained in the policy levers they can pull. And all would benefit from having more say in the policies that affect their economies.
And these deals should go deeper. For both London and Greater Manchester that means making more progress on fiscal devolution, granting them tax and borrowing powers and more control over their own budgets. Only when this happens will UK cities be armed with the kinds of tools that cities across Europe and the United States already benefit from.
Ten years from now the urban policy landscape should look very different to today. What benefits would this bring? More tailored and targeted policy presents the opportunity to improve the performance of all of our city economies. And better performing cities mean a bigger and stronger national economy overall.
Read more in Cities Outlook 2015
Director of Policy and Researchp.email@example.com
Leave a comment
It is hardly news that London and its satellites have done so well when the Brown government bailed their financial industries out to the tune of £700 billion. If the great regional cities had had anywhere near that level of handout there would be not be this divide. Look at transport investment in Birmingham for instance. It is a national disgrace.London politicians keep all our money for London particularly the Gucci socialists of Islington and Camden. This will never change. Blair was the worst prime minister for the regions ever cancelling project after project. The other cities mentioned are only successful because they are within an hour of London and no other reason. Does anyone really think that if Milton Keynes was in Cornwall it would have done so well.
Bear in mind that London is an international financial centre – perhaps the international centre. It follows that the finance sector is underpinned not merely by British subventions, estimated by the Bank of England’s Andrew Haldane at 74% of UK GDP, but by US subventions, estimated by Joe Stiglitz at 80% of US GDP ($12 trilllion). With money like this sloshing around it’s hardly surprising that house prices in the south east have gone up, or jobs have grown. But as a worldly wise person put it to me – if they want to subsidise our industries, then why should we complain?
Hi Ian – good points on international investment. The question from this is how come other cities haven’t benefited to the same extent from international investment? What is it that makes them less attractive to invest in? While we wouldn’t necessarily expect to see a second finance hub in the UK, this doesn’t preclude investment in other areas. Removing the barriers to this happening should be the aim of any policy attempting to support growth in UK cities.