City leaders and policymakers up and down the country are increasingly prioritising inclusive growth strategies to ensure that economic prosperity benefits all segments of the population. As engines of growth, but also as locations of the greatest levels of poverty, cities play an essential role in creating inclusive economies.

The challenges involved differ widely from city to city, however, and this report looks at the geography of low-skilled jobs and people, analysing how and why economic outcomes vary between places as well as unpacking the mechanisms through which low-skilled jobs are created.

Findings:

• Policies that support the growth of cities do not just benefit high-skilled people, they support low-skilled people too. Low-skilled people living in stronger economies are less likely to be unemployed than elsewhere and have access to many more job opportunities, both in low-skilled and higher-skilled occupations.
• There cannot be inclusive growth without economic growth. The ability of cities to attract high-skilled exporting jobs has an impact on the overall level of economic growth in these places. But growth in these jobs and businesses has indirectly benefited low-skilled people too. Growth in high-skilled exporting jobs brings money into the local economy creating demand for jobs in local services occupations such as leisure and retail, generating opportunities for low-skilled people. The variety of jobs stronger economies can offer means that low-skilled people not only have access to more job opportunities but better opportunities too.
• Creating growth is a necessary, but not sufficient, condition for inclusive growth. One of the challenges associated with strong city economies is that success comes with increased pressures on the housing market. As a result, low-skilled people risk being priced out of strong economies, making it more difficult for them to access the many job opportunities these cities generate.

Recommendations

The report sets out four areas policymakers should focus on to create sustainable, long-term and inclusive economic growth in cities:

1. Attract high-skilled exporting businesses in less economically successful cities. This means increasing the benefits these cities offer to such businesses by focusing on attracting and retaining talent, improving within-city transport, such as buses, and offering high-quality office space to businesses.
2. Improve low-skilled workers’ living standards in economically successful cities. The Government should continue its reform of the planning system to build more homes where they are least affordable. And cities should make use of the Transforming Cities Fund to improve public transport in their areas to better link people to jobs.
3. Central Government should follow similar principles in the design of the UK Shared Prosperity Fund. That means ensuring that in places with weak economies funding is not only directed to helping people get in the labour market but also aimed at supporting places in the creation of high-skilled economic growth in the longer term.
4. Prioritise investment in education, particularly adult education. At a national level, this means better funding further education colleges, while at a local level there needs to be a drive to increase take-up of courses.