The Commonwealth Games are due to take place in Birmingham in just over a year. Anthony Breach explores how the city can ensure a legacy is left that allows its city centre economy to flourish.
With the Commonwealth Games just over a year away for Birmingham, the city and the country are beginning to look forward to next year’s summer of sport. Policymakers and city leaders will be keen though to build economic success on the foundations of the games.
The benefits to athletics, sportsmanship and a celebration are themselves great reasons to host the games. But the Commonwealth Games need to be matched by continued good urban governance, some tough decisions, and an even stronger city centre to build on Birmingham’s growing prosperity to make the most out of its legacy.
Parts of London have benefitted from an economic legacy from the Olympics, especially in the East End, as local leaders worked with the grain of changes taking place in the city’s wider economy, such as the need for new housing. Stratford saw the fastest rate of housing supply of any neighbourhood in England and Wales; and the Boroughs just outside the Olympic Park saw jobs grow at a rate of 8 per cent vs 5 per cent for London as a whole in the two years prior.
But, London’s wider economy has experienced a lost decade since the financial crisis, as Figure 1 shows. Productivity – output per hour – grew by only 0.1 per cent a year from 2008 to 2018, lower than the national average of 0.3 per cent, and much lower than London’s pre-crisis trend of 2.8 per cent a year.
Source: ONS (2021), Tom Sells (2021)
Correspondingly, Figure 2 demonstrates that this loss of output was felt by workers. While wages in London grew at an average of 2.1 per cent every from 1998 to 2008, real wages in London were lower in 2018 than they were in 2008.
Source: ONS (2021), Tom Sells (2021)
London’s record since the Olympics was brighter in terms of jobs growth – London between 2013 and 2019 added over 780,000 jobs, roughly 29 per cent of all those created in the UK. But it does suggest that the Olympics had little impact on the capital’s wider economy, even if the East End benefitted tremendously. Bread and butter policy issues in the rest of London, like housing affordability, congestion and urban mobility, and provision of commercial and industrial space were not successfully addressed, and dragged on the city’s economy.
Manchester hosted the Commonwealth Games 20 years before Birmingham in 2002. Since then, Manchester has experienced a remarkable economic renaissance, after a difficult post-war period. The total number of jobs across the city grew by 41 per cent from 1991 to 2019. So the obvious question is then – what role did the Commonwealth Games play role here?
The answer is they complimented good city leadership and favourable trends in the local and global economy. Other cities over this period also experienced economic renewal, as technological and social changes powered a “return to the city” across the developed world after decades of post-war decline. City centres became particularly important, as they offered workers and firms special advantages towards sharing information and ideas that were now more important than ever.
Other cities saw even more dramatic changes than Manchester, as Figure 3 indicates. Brighton saw total jobs more than double from 1991 to 2019. Brighton’s city centre was key here – between 1998 and 2011, the city centre accounted for all of the city’s overall growth in private sector jobs. London as well saw dramatic growth.
Source: ONS, Business Register and Employment Survey (BRES) 2021, Centre for Cities 2015
Birmingham is in contrast a little behind but picking up steam. The total number of jobs across the city increased by 17 per cent from 1991 to 2019, but most of this gain has been over the past decade. Yet even before that, Birmingham’s city centre was key – the number of jobs in the centre grew by 17 per cent as well, but from 1998 to 2011.
In other words, the Commonwealth Games in Manchester arrived in a city that was already on the up, and successfully managed to carry its economic renaissance through a further two decades. This was in particular thanks to the work that was done to rejuvenate Manchester’s city centre. 70,000 jobs were created in the centre of Manchester between 1998 and 2015, which is in the range of half of all the jobs that the city added over this period. The careful support of new office space, a densification of the built environment, and urban transport investment all required lots of tough decisions by local leaders. But they unlocked that growth after the starting gun of the Commonwealth Games.
The same is true for Birmingham and is why it faces a promising situation. The local economy is heading in the right direction, and strong local institutions such as the metro mayor, are pushing a broader programme of change across the city, especially in the centre. Tough decisions like the Clean Air Zone are taken in the knowledge they will make the city a better place to live and to work.
The Commonwealth Games will be a much-needed break after the past year we have all had. But leaving a legacy from the Games depends on thinking about what comes after the games, and delivering good governance that goes with the grain of the urban economy and allows the city centre to flourish.
This analysis originally appeared in EG magazine on 3 June 2021.
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