The UK is by some measures the most geographically unequal developed economy in the world. While cities and large towns in the Greater South East of England are among the most productive and prosperous places in Europe, most in the North and Midlands lag far behind.
The Government has set out its intention to address this inequality and ‘level up’ underperforming and left-behind parts of the UK through a programme of infrastructure development, investing in education, skills and scientific R&D.
Because the vast majority of UK economic activity takes place in the largest 63 cities and towns, they are crucial to the levelling up agenda.
This briefing presents two new indexes to summarise and compare the performance of the UK's largest cities and towns. The findings have implications for policy, particularly the Government’s ‘levelling up’ agenda.
Our recent research, along with findings from What Works Growth, found that Benefit Cost Ratios are not biased towards London and the South.
Unemployment claims continue to rise, but at a slower pace, suggesting the gradual phase out of the job retention scheme has not translated into unemployment. At least not yet.
Arguing for more balance in how money is allocated across the country does nothing to tackle the varied challenges different places face in improving their economies.
Unlike many other developed economies, the UK’s largest cities and towns do not become more productive as they get bigger. In Germany, France, and the United States, there is a positive relationship between city size and productivity, as measured by GDP per worker.
This relationship does not hold in the UK. A number of small cities, such as Slough and Swindon, are more productive than expected and, with the clear exception of London, most large cities are less productive.
Even after adjusting the size of cities to take into account people who commute into them for work, most of the UK’s large cities still underperform. Their underperformance affects many more people than the underperformance of small- and medium-sized places, and has much larger implications for the national economy.
Among those underperforming cities, if the eight largest closed their output gap, the UK economy would be £47.4 billion larger in total — equivalent to adding two extra economies the size of Newcastle to national output. Manchester, Birmingham and Glasgow account for 70 per cent of this gap. For comparison, if all of the underperforming small- and medium-sized cities closed their output gaps, the UK economy would be £22.5 billion larger in total.
What needs to change
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Our recent research, along with findings from What Works Growth, found that Benefit Cost Ratios are not biased towards London and the South.
As the COVID-19 pandemic sends shockwaves through the labour market, Centre for Cities tracks the latest unemployment claim statistics across the UK's cities and largest towns.
Unemployment claims continue to rise, but at a slower pace, suggesting the gradual phase out of the job retention scheme has not translated into unemployment. At least not yet.
As the lockdown in response to the Coronavirus pandemic varies across the country, Centre for Cities tracks the recovery of high streets in Britain's cities and large towns.
Four senior politicians on how the Covid-19 pandemic is affecting the levelling up agenda - and why it's more important than ever.
Arguing for more balance in how money is allocated across the country does nothing to tackle the varied challenges different places face in improving their economies.
While the Treasury’s method of appraisal has been the focus of much recent ire, it is the lack of clear strategy from successive governments that should be the focus of the North’s frustrations.
The Prime Minister’s adult skills announcements are a welcome step to support people adapt to the changing labour market while helping places ‘level up’ – the next step should be investment in job creation.
In the UK, competition for jobs has risen most in places where work was already hardest to find, raising concerns about widening geographic inequality.
This report calls for a simplification of the Treasury's Green Book methodology, stronger local government, and a Government strategy and resources to achieve levelling up.
