03Implications for policy
The above has five main takeaways for policy.
The first is that tackling the underperformance of most big cities will not just be of benefit to people living in cities but around them too. The pejorative dismissal of this policy approach as ‘trickle-out’ ignores the realities of the respective roles and relationships that large cities have with their surrounding areas. It is also the most direct route of doing so – improving the economic performance of eight places to the benefit of many hundreds around them is much more feasible than making separate individual interventions across these places.
The second is that improving access to economic opportunity through improving the performance of big cities alone won’t be enough to improve the fortunes of the majority of current residents surrounding towns if these towns are low-skilled. That means that direct skills interventions in these places will be required alongside interventions in the cities.
Third, if surrounding towns and villages are to be attractive to higher-skilled workers, then interventions to improve their quality of life ‘offer’ will be required. This will not only mean looking at the types of housing available but dealing with other issues, such as crime and the quality of schools where these are a problem.
The fourth is that better linking places into the opportunity available in big cities through transport improvements will make them relatively more attractive places to live for those looking to commute in, and open up the jobs market in the city for those who already live there. But the nature of this intervention and the context the town or village finds itself in are important here.
If policy is to reopen rail lines, as is being pursued by the current government, then an assessment must be made based on the existing characteristics of the towns and villages being served:
- If they are low-skilled places then the cost of travel by train is likely to be a barrier, even if travel times are reduced. This means that skills interventions will still be required to improve the outcomes for the place.
- If they are to attract in more commuters to live, so changing the makeup of residents, then this will require housebuilding. The aim in a higher skilled place (which already offers the quality of life that higher-skilled workers are looking for) should be to expand the existing offer, while in a lower-skilled place the aim should be to change the offer to make the place more attractive to potential incomers. In either case, the provision of the rail line alone will not be enough to bring about a substantive change in outcomes.
Finally, those places that aren’t within commutable distance of a city pose a particular challenge for policy. Their small size and isolated location mean that their ability to attract high-skilled jobs is limited, as is access to jobs elsewhere (limiting their ability to attract high-skilled workers). This limits what economic policy can do for them. There are one-off policies, such as giving pubic support to the creation of gigafactories in Northumberland or Somerset, that could be pursued but by definition there are many more towns and villages than opportunities to use such policies. Given this, the policy approach to these places should focus on providing the best possible public services for the people who live there – for example education and health services – to improve quality of life outcomes.