01Introduction

The Fast Growth Cities (FGCs) group, comprising Cambridge, Milton Keynes, Norwich, Oxford, Peterborough and Swindon encompasses some of the most successful and innovative places in the UK.² The group was formed because of their joint commitment to knowledge-driven growth. This commitment is reflected in their high rates of population and employment growth during the last decade.

At the launch of the FGCs group in 2016, Centre for Cities produced a first report on the opportunities and challenges the cities faced and their positioning in the UK economy. Now, five years on, this briefing updates the original research from 2016 and looks at the most recent developments.

Why these cities matter – strengths and opportunities of the Fast Growth Cities

Each city has a strong labour market that not only benefits the local population but also the whole region by offering high-quality jobs to their surrounding towns and hinterland. The cities also host some of the most important universities and research organisations in the UK, which contribute to the wider economy both through their education of a high-skilled workforce as well as their research and innovation.

In recent years, members of the FGCs group have made progress in a variety of different fields linked to their joint commitment to knowledge-driven growth:

• With more than 60 per cent of its workers coming from outside the city, Cambridge is one of the most important research and innovation-led employment hubs in the UK. In recent years, the city started from a strong, well-educated employment base and moved from strength to strength. Between 2014 and 2018, Cambridge has seen an increase in its employment rate and the number of jobs in knowledge-intensive business services (KIBS), above the UK average. Since 2014, Cambridge has also seen the share of people without basic qualifications fall by 2 percentage points.
• Milton Keynes has a favourable industrial structure with a large share of productive businesses selling beyond the local market. This has translated into growth, and the city has seen a large increase in its productivity: Gross Value Added (GVA) per worker increased by five percentage points between 2015 and 2018 which is above the UK average of two percentage points. Due to its attractiveness as a workplace, Milton Keynes is also facing an increased demand for housing. The city’s pro-development response has meant that the city has seen one of the largest increases in houses built between 2008 and 2018.
• Norwich has seen improvements in the skill levels of its residents in recent years. Despite its renowned university, the city was lagging behind the national average share of highly skilled people. But between 2014 and 2018, the city increased its share of highly skilled people by six percentage points – which is around two times higher than the rest of the UK. At the same time, Norwich was successful in reducing the number of people with no skills by two percentage points.
• Between 2014 and 2018, Oxford saw a strong increase in its employment rate by more than seven percentage points. That is almost double the increase seen in other places in Great Britain and puts Oxford in the top spot as the city with the highest employment rate. This is accompanied by other positive labour market outcomes, including Oxford being among the 10 cities with the highest growth in private sector jobs and the highest wages in the UK.
• In recent years, Peterborough has emerged as a city with increasing innovation dynamics and is now among the 15 cities with the highest number of business start-ups and patents in the UK. The move towards more knowledge-intensive industries can also be observed when looking at the make-up of its industrial structure. Between 2014 and 2018, Peterborough saw an increase in the share of jobs in private KIBS by around four percentage points – one of the strongest increases in Great Britain over this period.
• Swindon’s key strengths are its high share of businesses selling beyond the local market, high share of jobs in private KIBS and its strong labour market. The city’s low reliance on the public sector has proven to be another advantage. Swindon was already among the cities with the highest productivity in 2015 but has seen a further increase of three percentage points by 2018.

Constraints on future growth

Despite these positive developments over recent years, there are a number of factors which threaten to limit success in the FGCs.

• One key challenge that the group faces is rising housing unaffordability in some cities, despite increases in housing Not addressing this, risks pricing workers out.
• While most of the cities were able to improve the skills of their workforce, some are still struggling with skills shortages or high shares of less- skilled people, which is likely to be preventing them from developing to their full potential.
• For some cities in the group there is also still room to improve their attractiveness as places to do business. Stronger investments in their city centres (or other emerging business districts such as the CB1 development around Cambridge station and the West End Innovation District and redevelopment of Oxford station) will be vital for their future success.
• Building upon the strengths that the cities have from their connections with London as well as their strong interlinkages with the surrounding hinterlands is also important to ensure the benefits of the growth in the group are felt more widely.

While a lot of these issues are shared amongst the group and require common effort and solutions, there are certain areas where challenges are felt more strongly in some than others. For these policy areas, solutions to address these issues will not be the same in every city in order to be the most effective for each place.

The pandemic puts further pressure on future ambitions for further growth. Each of the cities has seen a large increase in the number of people claiming unemployment benefits and has had at least 20 per cent of their workforce furloughed. In addition, some FGCs have industrial structures which make them particularly exposed to the economic impacts of the pandemic, such as dependencies on high numbers of tourists and students who are unlikely to quickly flock back to the cities. This will have knock-on effects for city centre spending.

If not addressed, all these challenges have the potential to constrain growth – not only in the FGCs themselves but, due to the nationally-significant activities that take place in them, for the UK as a whole.

Investment in and government support for the FGCs must focus first on economic recovery. To directly address the impact of the pandemic, any support should recognise the particular challenges the cities face. Looking longer term, government investment and support must address the fundamental barriers to the cities’ continued success particularly in the areas of skills and education, productivity, infrastructure and housing.