A new report published today by Centre for Cities calls on mid-sized cities and the Government to work together to create a new investment fund focused on making city centres more attractive to businesses. The report, Hidden Potential, supported by Sunderland City Council and PwC, shows that economic growth in some UK mid-sized cities is being restricted by their out-of-date city centres.
In order to provide the city centre business environment which modern businesses need to thrive and to create the jobs that the UK economy needs, the think tank advises that a new investment fund should be established. This fund should be set at a minimum of £500m and make more effective use of existing pots of public sector money as well as drawing in funding and expertise from the private sector.
Cities like Sunderland, Preston, Derby and Wakefield are examples of mid-sized cities that could use the fund to improve their city centre offer for businesses, which would help the private sector to create jobs.
Preston, for example, saw strong private sector jobs growth of over 16% between 1998 to 2008 yet the city centre’s private sector jobs base declined by almost 3%. By 2008, the city centre accounted for only 11% of all private sector employment. The story is similar in Sunderland. Of the 105 businesses that moved into the city between 1998 and 2008, just 3 moved to the city centre.
The mid-sized cities investment fund would combine public funds – from existing government schemes such as Regional Growth Fund, Growing Places Fund, European funding and local authority assets – with private sector funding and expertise. It would be used to kick-start the process of city centre reconfiguration that many of our cities need to undertake.
“City centres are likely to become ever more important for city growth in future and as such it is crucial that the UK has a policy to address this issue. But weak city centres are holding back growth in the UK.
“The Government has already been looking at the issue of weak city centres through the Portas Review of high streets, but we need to go further. Businesses are the real backbone of economic growth in cities, and cities with weak centres need to be supported to build a strong and diverse business base.
“An investment fund which uses existing money more effectively as well as drawing in private sector funding to support mid-sized cities to reconfigure their city centres will help them to unlock their potential and support the creation of the jobs the UK needs to grow its economy. The City Deals process presents a real opportunity to kick-start the engagement on this process and as such, mid-sized cities should be at the heart of the next round of negotiations.”
“Support for mid sized cities means rethinking the planning, positioning and long term sustainable growth strategy of many cities, creating a level playing field for employment, education and infrastructure investment to break the cycle of under development or overdependence on one industry or skill set.
“The report shows the potential for regional growth in the recovery to be fuelled by more than just the UK’s big-cities and the domino effects on housing, education, employment and regional economic growth of a connected plan for investment and development.”
“For too long, mid sized cities have been overlooked in terms of their potential. They have a key role to play in contributing to economic growth and here in Sunderland we have had over 4,000 new jobs announced already this year. But for many mid-sized cities, their city centres restrict economic growth rather than acting as a stimulus. Some creative thinking is what is needed to turn these city centres around.”
For further information please contact Rachel Tooby on 020 7803 4316 / 07748 183 026 / firstname.lastname@example.org
Hidden Potential: Fulfilling the economic potential of mid-sized cities is available here.
This work is supported by PwC and Sunderland City Council.