The national economy is struggling to create the numbers of private sector jobs needed to drive growth, or to balance job losses in the public sector. This pattern has played out very differently across UK cities.
Cities Outlook, published today and supported by IBM and the LGA, shows that the gap between cities is widening. In February 2008, the gap in the claimant count rate between Hull and Cambridge was 3.2 percentage points. By November 2011 this gap had widened to 6.1 percentage points. The report also highlights that there are six times more claimants in the most troubled neighbourhood in Rochdale than there are in the most troubled neighbourhood in Cambridge*.
The annual index illustrates how cities with less dynamic private sectors, such as Hull, Doncaster and Newport will find it more challenging to offset the combination of a weak national economy and the ongoing shrinkage of the public sector.
As cities respond to the challenges of high unemployment, a declining public sector and a reduction in real wages, those that bucked the trend and performed well against the odds, such as Edinburgh, Cambridge and London, have common traits. They have strong private sectors, high numbers of skilled residents and large numbers of ‘knowledge workers’ – people who work in professions like accountancy, law and finance.
Centre for Cities is calling on the Government to invest in those cities that are primed for growth. As these cities grow and create jobs they will drive the national recovery. Cities that are facing more entrenched challenges will require different solutions and support from Government to give residents the skills needed to find jobs and start businesses.
FIVE TO WATCH: Cities such as Milton Keynes and Aberdeen are well placed to drive the national economic recovery in this difficult economic climate. They have seen high number of business start ups, they have larger pools of highly skilled residents and they are highly innovative with significant numbers of patents registered:
The report also identifies cities that are likely to face real challenges in 2012. They have fewer people with high skills, they have more people claiming Jobseekers Allowance and a larger proportion of their total jobs are made up by the public sector. Cities like these are likely to be more vulnerable to rises in unemployment in 2012:
Alexandra Jones, Chief Executive of Centre for Cities, said:
“The year ahead is going to be tough for all UK cities but Cities Outlook 2012 shows that some cities are well-placed to kick-start economic growth. However, some cities have been hit particularly hard by recession and the gap between cities is widening. This makes it vital that government policy is tailored to meet the needs of each city rather than one-size-fits-all. What is right for Brighton and Reading will not be right for Dundee and Middlesbrough.
“During 2012 cities should take the lead in shaping their local economies, and the Government should give them the financial and political powers they need to make the right decisions for growth. Where cities face greater social and economic challenges, the government should offer support to help places adapt and respond to a rapidly changing global economy.”
Steven Peel, IBM Business Development Executive, said:
“Cities Outlook 2012 highlights the challenges confronting cities today and the widening gap between their ability to respond – both should be a cause for concern and a catalyst for decisive action. Leaders will need to be innovative and bold within their cities to identify and create competitive advantage and drive economic growth.
“The ‘Smartest Cities’ will be those that have a complete and integrated view of the information associated with city systems such as energy, transport, education and employment – the very foundations needed to stimulate economic development. Those that do will be equipped with insight that will enable them to really understand the dynamics within their cities and deliver targeted improvements in the quality of public services and in the creation of attractive locations for people and business alike.”
Councillor Peter Box, Chair of the LGA’s Economy and Transport Board said:
“The latest Cities Outlook report highlights the significant differences in how our cities are dealing with the tough economic climate. Councils strongly support the premise that Government policy must be tailored to meet the needs of each individual city, rather than a one–size-fits-all approach. It is vital that local council and business leaders, who understand their cities best, are given the tools they need to deliver growth, create jobs and start businesses.
“Councils have already started the process towards re-energising cities and communities and must now be allowed to go further. Changes to the planning system can help, but the LGA is now calling on the Government to localise the running of apprenticeship schemes and the ability to improve transport infrastructure to increase growth further.”
For more information, please contact
Rachel Tooby, External Affairs Manager, Centre for Cities: 020 7803 4316 / 07748 183 026 / r.tooby@centreforcities.org
John Galvez, IBM Media Relations: 07734 104275 / john.galvez@uk.ibm.com
Notes to editors:
* These neighbourhoods (small statistical areas as defined by ONS) are those with the highest job seeker’s allowance claimant rates of any neighbourhood in their city.
Cities Outlook 2012 is available upon request or download a copy here. The Centre for Cities is very grateful for the support of IBM and the Local Government Association (LGA) for this independent report. Except where otherwise indicated, all views expressed are those of the Centre for Cities and do not necessarily reflect those of IBM or the LGA.
Further data city-by-city on individual rankings for the 64 cities is also available at www.citiesoutlook.org
The Centre for Cities uses the Department for Communities and Local Government Primary Urban Area (PUA) definition of a city for the English urban areas included in Cities Outlook 2012. Primary Urban Areas are an aggregate of local authorities that make up the ‘built-up’ area of a city, defined as having a population of 125,000 or more.
PUA data only exists for English cities. For Welsh and Scottish cities, we have used the corresponding local authority area, with the exception of tightly-bounded Glasgow, where we have defined the city as an aggregate of five local authorities: West Dunbartonshire, East Dunbartonshire, East Renfrewshire, Renfrewshire and Glasgow City. Belfast has been defined as the aggregate of Belfast City, Carrickfergus, Castlereagh, Lisburn, Newtownabbey and North Down. The full breakdown is available at www.centreforcites.org/puas
The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain’s cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.
About IBM
For more information on IBM’s Smarter Cities initiative visit: www.ibm.com/uk/cities
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About the LGA
The Local Government Association (LGA) is here to support, promote and improve local government.
Local government is facing the most radical changes, as well as the most significant opportunities, in a decade.
We will fight local government’s corner and support councils through challenging times by focusing on our top two priorities:
- representing and advocating for local government and making the case for greater devolution
- helping councils tackle their challenges and take advantage of new opportunities to deliver better value for money services.
We aim to set the political agenda and speak in the national media on the issues that matter to council members.
The LGA covers every part of England and Wales, and works with the individual political parties through the political group offices.
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