Summary

The move of the BBC has clearly had an impact on MediaCityUK. The presence of at least 2,000 jobs in national operations, and a further 600 in local ones, is in itself considerable. And there has been a wider impact – removing the estimated national and local moves of the BBC suggests that there were around 1,400 additional jobs in other businesses in the media sector. And given the industry had little presence in the area before the BBC’s move, it is highly likely that their location was the result of the BBC relocation. This is also likely to have supported growth in the hotel and hospitality sectors, though it did not increase the total number of jobs in retail.

However, much of the growth in media was down to displacement, particularly from elsewhere in Greater Manchester. Of the 1,400 extra jobs, 370 were jobs in new businesses. Outside of MediaCityUK, the number of jobs in media in Greater Manchester declined between 2011 and 2016. While this may ultimately make the sector in Manchester more productive by concentrating jobs in one place and facilitating knowledge spillovers, it means that job creation figures should be handled carefully.

Beyond the MediaCityUK, the impact was limited. Between 2011 and 2016, in the one mile area around MediaCityUK, there was no growth in media jobs and growth in other industries is unlikely to have been linked to the BBC’s relocation. At the combined authority level, the contribution of the employment growth in MediaCityUK to Greater Manchester’s economy was fairly small.

Policy implications

While there has been some impact, the economic benefits relocating high skilled publicly-funded jobs out of London should not be overplayed. Discussions about the economic merits of moving public functions out of London, most recently Channel 4, are not new. The evidence presented here for both the ONS and BBC moves suggests that their wider economic impact to date has been fairly limited beyond the relocation area. If a relocation is to take place, then it should be subjected to a thorough evaluation.

The impact of any relocation will depend on the attributes of the host city. The ability to attract in high-skilled businesses hinges on the ability of a city to offer high-skilled workers. And the functioning of a public or quasi-public body operates on a similar principle – if there aren’t the sufficient numbers of necessary workers recruitment will be difficult.

Any wider economic benefit of a relocation is likely to depend on the nature of the activity being relocated. Lower-skilled jobs in closed bodies will have less impact on a city economy than higher-skilled jobs in more outward-looking ones. This means that a move of Channel 4 to Birmingham or Manchester, for example, is likely to have a bigger impact on either of those cities than the ONS move to Newport. That said, it must be stressed once more that even the impact of the former is likely to be limited, at least in the short-term.

Cities should consider the opportunity costs of trying to attract a public body. Thanks to the BBC move, Greater Manchester gained a small number of highly-skilled jobs and this is the type of employment that cities should be looking to attract. But like with any other business attraction policy, cities should be wary of deploying disproportionate resources that could be more effectively utilised to improve the fundamentals of the local economy such as skills and transport.

 

This work contains statistical data from ONS which is Crown Copyright. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research datasets which may not exactly reproduce National Statistics aggregates.