Cities and large towns created 64 per cent of all new jobs created in the UK in that period. This was led by Britain’s ten largest cities, which accounted for almost half (45.6 per cent) of the jobs created. In contrast, non-urban areas created only 36 per cent of new jobs.
Figure 2: Contribution of cities and non-urban areas to job creation, 2013-19
Source: ONS, Business Structure Database (BSD)
These net job creation figures show a much higher turnover in the labour market.
Looking at the country as a whole, a net increase of 2.7 million jobs was actually the result of 19.3 million private sector jobs being created during this period, and 16.6 million being lost. To put it another way, around seven new private sector jobs were needed to create one viable job. In the race to create jobs, cities were slightly faster as they “only” needed 6.8 private sector jobs to create one lasting job. Non-urban areas, however, needed to create 7.5 private sector jobs for the same outcome.
To illustrate this, Figure 3 shows how many jobs cities created and how many they lost overall between 2013 and 2019. Taking London as an example, to achieve a net increase of 790,000 jobs, the capital created 4.6 million jobs while 3.8 million jobs were lost.
Figure 3: Private job gain and loss of in British Cities, 2013-19
Source: ONS, Business Structure Database (BSD), ONS, Annual Survey of Hours and Earnings (ASHE), average gross weekly workplace-based earnings. Own calculations for PUA-level weighted by number of jobs, CPI inflation adjusted.
These numbers illustrate that the challenges the country is facing in the recovery period run much deeper than creating just 1.3 million jobs. If this pattern of high job churn repeats post-Covid, then 9.4 million new private sector jobs will be needed to get the 1.3 million people who lost their jobs during the pandemic back into work.
Policy should support job creation
While there is hope the economy will bounce back quickly, there are a number of things that policy can do to help get the job creation engines firing again. The first is helping high street businesses and the hospitality sector find their feet again. These sectors played a central role in the ‘jobs miracle’, and will be needed again post Covid-19. The Government should introduce a ‘Spend Out to Help Out’ voucher if consumer demand does not return post-lockdown.
In addition, there should be direct support for jobs-heavy industries, particularly where they contribute to other government ambitions. One such example is construction (which also played an important role in creating jobs across the country) an expansion of the Green Homes Grant to improve energy efficiency would create jobs and help the UK meet its net zero goals, and has a part to play in the Government’s green agenda.
A fuller analysis and list of policy recommendations are set out in Centre for Cities’ new report Building Back Better: How to recover from Covid-19.
This work was produced using statistical data from ONS. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data.
This work uses research datasets which may not exactly reproduce National Statistics aggregates.