01Towns and villages around big cities benefit from being close to their neighbour
The series of charts below shows the relationships between the largest cities in England outside of London and their surrounding towns and villages by looking at two variables: average incomes in those towns and villages and the share of working residents that commute into the neighbouring big city. Box 1 sets out methodology for the selection of the settlements.
Box 1: Methodology
Selecting settlements
The cities, towns and villages used in this report are defined using the ONS’ built up area definitions (2011), with the following thresholds used:
- Big cities: Between 600,000 and 2.6 million daytime population in 2011
- Towns and villages: less than 135,000 daytime population in 2011
Other cities, defined as having a daytime population between 135,000 and 600,000, were excluded from the analysis because they have large economies and so are prosperity generators in their own right.
Given the purpose of this research is to better understand relationships between big cities and their surrounding towns, a geography must be selected that meaningfully illustrates this. There is no one consistent way of defining what the geography should be, and this is influenced by distance, topography and the rival centres that exist close to the big city in question.
To define this geography, first all the towns and villages in local authorities that cover the big city (e.g. North Tyneside for Newcastle) and border the big city (e.g. Northumberland) were selected. This was then refined depending on distance and the location of other economic centres. For example, all towns and villages in Northumberland were kept because the next centre to the north is Edinburgh, and this means the outcomes for Berwick-upon-Tweed are insightful, despite its distance from Newcastle. But because places in the north of County Durham (e.g. Consett) point towards Newcastle but south (e.g. Sedgefield) point towards Middlesbrough, the latter were excluded.
When undertaking the analysis, towns and villages within two miles of a large city appear to have a different relationship with their nearest large city, acting more like extensions of the suburbs of a city. Given this, they are excluded from the main analysis and this difference is investigated separately in Box 2.
Data used
The data used in the report is the latest available. For commuting data, this is 2011 – data from the 2021 census has not yet been released and, given the census took place during a lockdown, is unlikely to provide much insight on commuting patterns. As a result, the 2011 data is the best available at low-level geographies.
Figure 1: Big cities provide prosperity for their surrounding towns and villages
There are three main findings from these charts:
- Incomes in surrounding towns and villages are on average higher than for big city dwellers
For those who have followed the somewhat unhelpful debate that has pitched cities against towns in recent years, you would be forgiven for thinking that resident incomes are much higher in cities than their surrounding areas. In reality, most towns and villages around England’s largest cities have higher wages, and some substantially so.6 Of all the towns and villages used in this research, 81 per cent have average incomes above their nearest large city, and 37 per cent have incomes at least 10 per cent higher. It is not the case that the residents of surrounding towns and villages are trailing well behind their big city neighbours.
- Towns and villages with larger commuting links to big cities have higher average incomes
Almost all big cities spread prosperity to their surrounding settlements. There is a positive relationship between the average incomes of residents of a town or village and the share of working residents commuting into their nearby large city. Around Newcastle, for example, a place like Seahouses, which is some distance to the north in Northumberland and has no alternative jobs centre near to it, has weak commuting links to Newcastle and low average incomes. Morpeth on the other hand, which is much closer, has high levels of commuting and high incomes. Box 2 shows how this relationship alters for towns and villages within two miles of a big city.
Box 2: The relationship between big cities and settlements within two miles
The relationship between the big cities and settlements within two miles is more nuanced than for other areas. Figure 2 shows that there is no clear relationship between commuting and incomes when looking at all places that are within two miles of a big city. But there are two things to draw from this chart.
The first is that there is no relationship because there are a number of places towards the bottom right of the chart that have low incomes despite high shares of commuting. This shows that these places are dependent on the city in terms of access to jobs, it is just that their residents aren’t disproportionately accessing high-skilled employment. Given the much lower travel costs (in terms of time and money) relative to other places to access a job in the city, this is not a surprise. When looking at commuting to the city centre, which has a higher travel cost because of the longer distance, these towns and villages perform much more in line with their peers.
The second is that there aren’t any towns or villages towards the top left of the chart. There is no town or village that has high average incomes with weak commuting links. The prosperity of these places is very much hitched to their larger neighbour.
Figure 2: Nearby towns and villages are dependent on their larger neighbour for jobs, if not high-skilled jobs
Source: ONS; Census 2011
While as ever correlation isn’t causation, separate data from the ONS’ Annual Survey of Hours and Earnings shows that workplace wages in the large cities are higher than resident wages, showing that higher-skilled jobs are disproportionately taken by people from outside the city – Box 3 illustrates this for Leeds. Big cities do bring benefits to their wider area.
Box 3: Workplace and resident wages in and around Leeds
ONS produces data at the local authority level for wages at the workplace and wages where people live. For Leeds and its surrounding areas, Figure 3 shows that workplace wages are highest in Leeds, and that resident wages are lower than workplace wages, meaning the commuters disproportionately benefit from the high-paid jobs available in the city. This adds weight to the findings in Figure 1.
Figure 3: Higher paid jobs in Leeds are disproportionately taken by commuters
Source: ONS
The strength of this relationship varies across cities. This in part results from the number of competing economic centres around a city, increasing the sources of opportunity for a town or village. Bristol, for example, is mainly surrounded by a rural hinterland. Given this, the relationship between commuting to Bristol and incomes is one of the strongest of all of the big cities. (Box 4 shows how this geography influences the role that Exeter, a smaller city, plays within its wider area.) Liverpool is very different, with competing centres including Manchester, Birkenhead, Preston, Warrington, Wigan and Chester. The result is that the number of towns and villages within its orbit is very much smaller than for other big cities, and the relationship is much less clear cut.
Box 4: The role of smaller cities in their wider economy
The smaller scale of smaller cities means that there is less prosperity to spread and it is harder to pick up their impact if there is a competing economic centre nearby. Figure 4 shows that Exeter, which doesn’t have a competing centre in close proximity shows that it too spreads prosperity to its rural hinterland. This impact isn’t just the preserve of big cities, especially in more remote parts of the country.
Figure 4: Exeter provides prosperity for its wider area
Source: ONS; Census 2011
- The underperformance of most big cities reduces access to prosperity
While most large cities play an important role in generating prosperity for their wider areas, the amount of prosperity generated depends on how successful the city is. A big challenge for the UK economy is that, with the exception of Bristol, all large cities underperform.7 Comparing Bristol and Newcastle in Figure 5 shows this: while there is a positive relationship for both cities, Bristol has many of its surrounding settlements in the top right of the chart. Bristol has 18 towns or villages, home to 89,000 people, that both had at least 20 per cent of their working residents commuting to Bristol in 2011 and had incomes above £17,500 in 2018. The equivalent figure for Newcastle is nine, home to 36,000 people.
Figure 5: Bristol provides a greater amount of prosperity to its surrounding area than Newcastle does
The issue for the North East therefore is not that surrounding places suffer because of Newcastle’s success; rather, they aren’t as prosperous as they could be because Newcastle isn’t playing the role it should be in both the regional and the national economy.