European cities 40 per cent more productive than Northern Powerhouse counterparts

A new report published today by the think tank Centre for Cities warns that the Government’s Northern Powerhouse will only succeed if it focuses on boosting productivity in underperforming Northern cities.

The report, Building the Northern Powerhouse: lessons from the Rhine-Ruhr and Randstad (sponsored by leading law firm DAC Beachcroft), compares Northern cities to the Rhine-Ruhr and Randstad regions of Germany and Holland, which the Government has cited as models for the Northern Powerhouse.

It shows that the success of the Rhine-Ruhr and Randstad regions is not the result of extensive connections between cities in these areas, as is often assumed – and that inter-city commuting links in the Rhine-Ruhr and Randstad areas are actually little better than in the North of England. Instead, the economic vibrancy of these regions is driven by the strong performance of their individual cities, which are 40 per cent more productive than counterparts in the Northern Powerhouse.

Based on this analysis, the report makes a number of recommendations for national and local policy-makers working to build a successful Northern Powerhouse:

• Focus on addressing skills-gaps in Northern cities – The research shows that only three Northern cities (York, Warrington and Leeds) are in the UK top 20 in terms of the number of residents educated to degree level. For example, nearly half of residents in Reading (47 per cent) have a degree, compared to only a quarter of people in Liverpool educated to this level. Addressing these skills-gaps will be crucial in boosting productivity in the Northern Powerhouse region.

• Strengthening transport networks within Northern cities is a bigger priority than inter-city links – While improving train connections between cities such as Manchester and Leeds will help economic development, the research suggests that boosting transport links within cities will have a bigger impact on improving productivity, by enabling people to access jobs across their wider city-region more easily.

• City-region governance will be vital to an effective Northern Powerhouse – The findings show that the North is comprised of many economies, which operate over a city-region scale and have distinctive challenges when it comes to skills, local transport and planning. Important policy decisions on these issues should therefore be at the city-region level. National and local leaders need to continue to focus on finalising city-region devolution deals for major Northern cities, and where decisions are being taken on pan-northern issues – for example, by Transport for the North – they should be taken in a way which best supports these city regions to prosper.

Commenting on the findings, Alexandra Jones, Chief Executive of Centre for Cities said:             

“We can’t build a successful Northern Powerhouse without stronger, more productive cities. The Government’s initiative has the potential to have a huge impact in addressing the North/South divide, but only if it maintains its original focus of boosting productivity in major Northern cities such as Manchester, Leeds and Newcastle. These big urban areas have the most potential for growth in the region, but are currently underperforming, especially in comparison to cities in more successful areas such as the Rhine-Ruhr and Randstad areas.

“Instead of spreading limited monies and political focus equally across the whole region, national and local policy-makers should concentrate most resources on addressing the economic challenges that big Northern cities and their city regions face, as these have greatest potential to deliver benefits for the North as a whole.”

Mike Bothamley, Head of Real Estate at DAC Beachcroft, who sponsored the report, said:

“The report gives a tangible direction for the evolution of the Northern Powerhouse concept. While supporting regional collaboration it clearly highlights the importance of local action in the drive for sustainable growth and recommends practical actions for planning and development. “

ENDS

NOTES TO EDITORS

For more information or to set up an interview, please contact Brian Semple, Press Manager for the Centre for Cities, on 0207 803 4316 or b.semple@centreforcities.org

Centre for Cities

Centre for Cities is a research and policy institute, dedicated to improving the economic success of UK cities. We are a charity that works with cities, business and Whitehall to develop and implement policy that supports the performance of urban economies. We do this through impartial research and knowledge exchange.

DAC Beachcroft

With around 2,200 people, DAC Beachcroft combines one of the most comprehensive UK legal networks with coverage across Europe, Latin America, North America and Asia-Pacific.

DAC Beachcroft refers to the DAC Beachcroft Group, which includes a number of differently regulated entities within the UK and internationally.

We provide a full service commercial, transactional, claims, risk and advisory capability. We work with clients in a select range of industry sectors and are market leaders in health, insurance and real estate.