Ignoring the relationship between cities and towns makes it harder to bring greater prosperity to struggling towns.
The debate on cities and towns has been very polarised in recent years, with the former being pitched against that latter. Given the economic ties between the two, this debate is incredibly unhelpful for policy makers and ultimately for the fortunes of people who live in towns.
In the first in a series of blogs looking at the performance of towns (defined as those with a daytime population of between 30,000 and 135,000), this piece shows that firstly, not all towns struggle, and secondly the towns that do well tend to be located close to a successful city. This has implications for how we should think about levelling up prosperity for the people who live in towns.
The word ‘town’ has become a byword for ‘left behind place’ in recent years. But as previous work by Centre for Cities has shown, the employment outcomes of many towns is strong, while a number of the UK’s larger cities struggle.
Towns that are located closer to cities tend to do better than those further away. And of towns within commutable distance of a city, those that are close to a strong performing city tend to do better than those whose neighbouring city performs poorly. Figure 1 shows that 60 per cent of strong towns – those with the lowest unemployment rates – are located within commutable distance of strong cities, while 72 per cent of weak towns are close to weak cities or defined as rural.
Figure 1: The fortunes of towns depend on that of their closest city
Source: Census, 2011
Note: Cities are classified as strong/weak based on productivity and wages in 2011. Towns are classified as strong/weak based on the unemployment rate in 2011. When a strong city is within 45 minutes commuting time from a town by public transport or car, the town is considered to be located in the hinterland of a strong city. When commuting time to a city takes more than 45 minutes, the town is classified as “rural”.
Note: *at least one strong city within 45 minutes commuting timeSource: Centre for Cities, 2021
For towns located within 45 minutes of cities, there are three explanations as to why this relationship exists. The performance of rural towns will be the subject of a later blog.
Previous Centre for Cities work has shown that productive businesses that offer high-paid jobs mainly cluster in cities because of the benefits of agglomeration. This creates job opportunities not just for city residents but for people living around them too. On average, one in four jobs in high-skilled occupations are carried out by a person who lives outside of a city.
Furthermore, the larger the absolute number of these jobs in cities, the more the surrounding hinterland benefits from it. In London for instance, only 17 per cent of jobs in high skilled occupations were carried out by people living in towns or villages in 2011, meaning in total the hinterland of London benefited from more than 385,000 high quality jobs – equivalent to the entire working age population of Edinburgh having a high skilled job. In total, English and Welsh cities and large towns created around 1.4 million high-skilled jobs for people beyond their boundaries (see Figure 3).
If cities which currently underperform had the same share of jobs in high-skilled occupations as strong cities, an estimate of at least 170,000 new jobs could be offered to the towns and villages surrounding them. This is why focussing on underperforming cities is so crucial – not only to offer greater opportunities to their residents, but to people living around them too.
Figure 2: Cities provide high-skilled jobs to their non-urban hinterlands
Source: Census, 2011
Note: Data available for England and Wales only.
Those who commute to highly-skilled occupations in cities are likely to have a positive impact on the vitality of high streets in nearby towns by stimulating demand for local services where they live. Figure 4 looks at a subset of towns with very strong commuter links to cities. It shows that towns that have the highest share of commuters in high-skilled professions are also the towns with the lowest retail vacancy rates.
Notably, the local demand stemming from high-skilled commuters is not the only reason for a low vacancy rate. Factors such as attractiveness to tourists or the presence of other wealthy residents such as pensioners are also important. Their role will be explored in more detail in another blog within this series but commuting links are likely to play a role too.
Figure 3: The demand in high streets of commuter towns* benefits from commuters in high-skilled professions
Source: Census, 2011; Local Data Company, 2018.
Note: *Commuter towns are defined as those in which at least 25 per cent of workers commute to cities.
It’s not only direct access to jobs in high-skilled occupations in cities which matters for the vitality of towns. Towns that are located next to strong cities are also more likely to provide jobs in high-skilled occupations to their residents. This suggests that the performance of a nearby city is important for the ability of a town to attract investment from high-skilled exporting businesses (businesses that are in principle able to locate anywhere because they sell to multiple markets). This suggests that proximity to a strong -performing city is still important for high-skilled exporting businesses, even if they choose not to be based in a city.
For weak towns located next to weak cities, this means they not only face the “natural challenge” of attracting high-skilled exporting industries themselves because of their size, but, they’re also not able to fully benefit from the proximity to their neighbouring city because said city is not attractive enough for these types of businesses.
Figure 4: Towns next to strong cities have more productive jobs themselves
Source: Census, 2011
These relationships mean that pitching towns against cities is not helpful for the people who live in towns. Increasing their access to opportunity will in part depend on improving the performance of the neighbouring city. And so, ignoring the city and simply focusing on the town alone ignores part of the reason why successful towns are successful.
As the analysis above shows, there are exceptions to this rule, with poorly performing towns next to strong cities and strong towns in the orbit of weak cities. The next blog in our town series will look at the reasons for these anomalies and explore what this means for policy interventions in towns.
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As part of levelling up, the Government should create a City Centre Productivity Fund. This is how it would work.
Towns and cities have different roles to play in the economy, and the success of one is often dependent on the other.
The idea that recent growth of cities has come at the expense of towns has become a mantra. The problem is, it isn’t true.
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