Strong cities have a positive effect on the performance of towns – particularly when it comes to accessing highly paid jobs and economic spillovers. As the first blog in this series showed, this is why around 67 per cent of all towns in Great Britain perform in line with the strength of their closest city.
But there are exceptions.
As shown in Table 1, 15 ‘strong’ towns – as defined by their relatively low unemployment rate – are located next to weak cities (STWC), whilst 24 towns are classified as weak despite being within a 45-minutes’ commute of a strong city (WTSC). Looking more closely at these anomalies gives a better understanding of the challenges for towns, and what needs to happen to level them up.
Table 1: The performance of strong and weak towns is largely in line with the performance of their closest city
Source: Centre for Cities, 2021
People living in weak towns often lack the right skills to participate in a high-skilled labour market
As previous Centre for Cities research has shown, skills is the indicator that best predicts the employment outcomes of people living in towns irrespective of location. (Figure 1). If levelling up focuses on nothing else, it should address the skills problems faced across towns and cities alike.
Figure 1: Skills are the best indicator to predict employment outcomes
Source: Census, 2011
Note: Data available for England and Wales only.
Skills particularly help explain why there are struggling towns in the orbit of successful cities. Figure 2 shows that almost 50 per cent of people in these towns have few or no qualifications, compared to 35 per cent in stronger towns within commuting distance of a strong city. Demand for skills exists, but the supply of them in these struggling towns is a problem. In contrast, for strong towns within commuting distance of a weak city, the supply of skills is much less of a problem - the share of people with few or no qualifications is lower and the share of those with high level qualifications is higher.
Figure 2: Stronger towns have more people with high qualifications and fewer people who have either no or few qualifications
Source: Census, 2011
Given that these 15 strong towns don’t have a strong city close by, the question is: what makes them so successful?
Strong towns next to weak cities disproportionately benefit from the higher-skilled jobs available in that city
While weaker cities have fewer high-skilled job opportunities, they do still have some - there are just fewer to go around. Of the commuters that take these jobs, it is very much those that live in small towns and villages that benefit, rather than larger towns - around 72 per cent of these commuters live in places with fewer than 30,000 inhabitants. For the rest of the available jobs, the residents of some medium-sized towns appear to take greater advantage of these jobs than their neighbours (see Figure 3).
Figure 3: Towns next to weak cities that are strong are more likely to cluster high skilled commuters
Source: Census, 2011
Note: Data available for England and Wales only.
Take the towns around Birmingham for example. Birmingham is classed as a weak city, but because of its size it still offers a large number of high-skilled job opportunities, particularly in its city centre. In 2011 it had 340,921 jobs in high-skilled occupations alone, eight times more than the total number of jobs in nearby Cannock.
Of the six towns within 45 minutes of Birmingham, Bromsgrove and Litchfield come out on top in the battle to attract and retain the commuters who get these jobs (see Table 2). These two strong towns are home to 34 per cent of Birmingham’s high-skilled commuters from surrounding towns despite only having 21 per cent of their population. This is in contrast to Cannock and Tamworth, two weaker towns. They are home to 43 per cent of the population but 40 per cent of the high-skilled commuters into the city.
Table 2: Commuter towns around Birmingham
Source: Census, 2011; VOA, 2018; MHCLG, 2019
The discourse in recent years has rather unhelpfully has tried to pitch cities against towns. What this analysis shows is that without improving the performance of Birmingham, the towns around Birmingham are actually competing with each other.
The ‘offer’ made by weak and strong towns next to weak cities are very different
The question is: why do certain people prefer some towns over others? The most likely explanation is that the living conditions of a town appear to play an important role when it comes to attracting high-skilled commuters.
Figure 4 looks at two indicators describing the living conditions in a town: Crime and quality of housing stock (as proxied with council tax bands), with the share of commuters in high-skilled jobs as bubble size. On average, strong towns next to weak cities have lower crime levels and a better housing stock, making them more attractive places to live. It is unclear whether people in high-skilled occupations moved there first and crime fell, or whether it was the other way around. There is however a link between the attractiveness of a place and economic outcomes which should be taken into consideration for future policy.
Figure 4: The living conditions in strong towns next to weak cities are often better than in nearby weak towns
Source: Census, 2011; VOA, 2018; MHCLG, 2019
Note: Bubble-size is the share of commuters to a city that is working in high-skilled jobs (2011).
Note: Data available for England only.
Once again, looking at Birmingham and its surrounding towns provides a good illustration of this.
Bromsgrove and Lichfield, have both a higher quality housing stock. Bromsgrove for instance has 11 per cent of its houses in the highest council tax band and 37 per cent in the lowest. Cannock, in contrast, has only 2 per cent of its housing in the highest category, and 64 in the lowest. In addition, Bromsgrove and Lichfield have lower crime rates than other towns close to Birmingham (See Figure 4).
It is also interesting to note that the commuting-time to a city does not seem to have a big impact - it is slightly quicker to commute from Cannock or Tamworth than Bromsgrove or Litchfield. The third post in this series will have a closer look at the role of transport between towns and cities.
Strong towns next to weak cities don’t have a particularly strong economy in their own right
While having more high-skilled people living in a town has a positive impact on employment outcomes of residents, the link between skills of residents and the types of jobs located in the town is less clear cut.
This is because, as the previous blog showed, the performance of the nearest city appears to have an even bigger impact on the nature of business investment surrounding towns attract in. This is why those towns clustered in the top right of Figure 5 are strong towns near strong cities. In contrast, strong towns next to weak cities (STWC) - despite their high shares of high-skilled workers - do not have strong economies in their own right. So strong towns seem to suffer as a result of the underperformance of their nearest city too.
Figure 5: There is a clear link between the town’s business base and the strength of the next city
Source: Census, 2011
Note: Data available for England and Wales only.
People who have the choice where to locate also prefer to live in more attractive places
It’s not only the active workforce who cluster in certain places. Looking at location choices of high-skilled retirees, who are not tied to any particular labour market, gives insights about choices that different people make. Given their skill-levels, it’s likely that these retirees have a fairly high disposable income they can spend in the local high street. And from Figure 6 the location of these people is similar to high-skilled commuters, they also seem to cluster in places which are more attractive.
This has implications for any future increase in home working. If a new band of new digital nomads has been freed from the office and is about to move where it wants to, it appears they are more likely to move to already prosperous places, rather than those in need of levelling up.
Figure 6: Share of high-skilled pensioners and quality of housing stock
Source: Census, 2011; VOA, 2018.
Note: Data available for England and Wales only.
A levelling up policy that wants to help people in struggling towns should address the skills deficits that these towns suffer from. And it should focus on improving the economic performance of the neighbouring city. Without improving the performance of Birmingham and the opportunity it offers for example, improvements to housing or crime in Cannock would likely shuffle people between the town and more successful places like Bromsgrove and Litchfield rather than deal with the underlying challenge of a lack of higher-paid jobs.
Policy must focus on improving the performance of the nearby cities in conjunction with intervention in towns. Specific policy recommendations on how the levelling up agenda should do this are set out in ‘So you want to level up?’.
Read the next blog in this series here.
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