Jobs, not shops, are the key to boosting city centre economies

That is the warning from a major new report, published by Centre for Cities today (10 September 2013), which urges a transformation of the public debate surrounding UK city centres.

The report, Beyond the High Street: Why our city centres really matter, shows that the city centres of our largest cities are increasingly the location of choice for business. Eight of our 10 largest cities have seen their city centres become more important in recent years as places of employment. In Leeds, for example, half of all private sector jobs growth occurred in its city centre between 1998 and 2008, while three quarters of all jobs growth in Glasgow took place in its city centre.

But in our small and medium sized cities, it’s the out of town sites that are the preferred location for business – their city centres have been playing an ever smaller role in their local economies. One third of our cities have been ‘hollowing out’, with their city centres losing jobs while out of town sites have seen growth.

It’s this element of the debate – the location of jobs – that commentators have ignored. And yet it is one of the most important to the future of the High Street.

Sluggish retail is only a symptom of a struggling city centre, not the primary cause of it. Workers, as well as residents and day trippers, make a big contribution to footfall on our high streets. However, if their jobs are not located within city centres, then workers are less likely to spend their money on the High Street during the week.

Cities need to fix their city centre economies to make them places that businesses want to locate to. By doing this they will increase the number of customers that retailers can sell to. And this will improve the fortunes of High Street retail as a result.

To support this, Government needs to prioritise city centres in its National Infrastructure Plan, ensuring the needs of individual places are at the heart of investment decisions in the future.

To fund this, Centre for Cities is calling for Government to allocate a portion of the £3bn expected to be underspent on infrastructure investment ahead of 2015 to a newCity Centre Growth Fund, aimed directly at addressing the physical and digital infrastructure investments required to support business growth within UK city centres in the years ahead.

Alexandra Jones, Chief Executive of Centre for Cities said:

“City Centres are vital for the health of the UK economy, with our most successful city centre economies being the most productive parts of the national economy.

“But this isn’t universal across all city centres, and many could have a bleak outlook unless policies stop focusing on the 20th century High Street, and start thinking about a 21st century city centre.

“While retail is clearly important for the health of our high streets, it is just one part of city centre success. Thriving city centres have to be places in which people can work, as well as live, play and shop – and that means thinking more broadly about jobs and business growth.

“If cities continue to hollow out, they will not be able to provide the right kind of city centre environment to attract and retain the businesses that will support their economy in the future. The Government and cities must act now to address this critical problem.”

ENDS

For further information or to request an interview, please contact:

Rachel Morrisroe, Senior External Affairs Manager at Centre for Cities on 0207 803 4316 / 07748 183 026 / r.morrisroe@centreforcities.org  or Ben Harrison, Director of Partnerships at Centre for Cities on 0207 803 4315 / 07850 449 819 /b.harrison@centreforcities.org

Notes to Editors:

• Jobs play a huge role in overall daytime population in cities. In large cities commuters increase the weekday population by an average of 90,000 people, while in London it increases by up to 1.4 million.
• Almost half of all jobs in central London, and more than one in three jobs in the centres of large cities are in ‘knowledge intensive’ services jobs, such as finance, law and marketing. This compares to one in four in medium cities and one in five in small cities.
• This means that the central economies of small and medium sized cities are more reliant on retail: retailers account for 16 per cent of central employment in small cities, compared to 9 per cent in large cities and 5 per cent in London.
• In Central London there are on average 380 jobs for every parcel of land equivalent to the size of Trafalgar Square. This is almost three times the average for large cities. In turn the central areas of large cities have more than 50 per cent more private sector workers than medium cities on average and more than double the number in small cities.
• Contradictory policy has further enforced these patterns in some cities.Policies such as Town Centre First and the Portas Review have tried to support city centre retail. Meanwhile enterprise zones and subsidised out of town business parks have undermined the city centre economy, reducing footfall and so hurting high street retailers.