06Conclusions and policy recommendations

Policy recommendations for cities

1. Weak city economies must focus on being more attractive business locations

City economies are weak because they cannot adequately offer businesses the benefits a city should – access to lots of skilled workers and an attractive business environment. To overcome this, local economic policy must focus on better offering these benefits and specifically the priority should be improving educational attainment.

Cities should establish Skills Compacts to promote and coordinate action to improve education and training in the city. City leaders and metro mayors should bring local stakeholders together — including schools, FE colleges, training providers, universities, businesses and the third sector — to commit to improving outcomes by working together, sharing knowledge and best practice, and raising awareness of existing initiatives. Measurable targets should be set to monitor progress.

Cities should invest in their consumer offering, but not as the primary tool to achieve economic growth. While these contribute to creating a more attractive business location, they should not be used as tools to lead economic development. Attracting businesses by boosting the skills of the workforce must come first before a greater consumption offer can be sustained.

2. Struggling high streets must strengthen their city centre economies

In the long-term, policymakers should focus on attracting more business investment into weak city centres. High street vacancies are a symptom of a weak economy, rather than the inevitable impact of the rise in online shopping. So rather than focus on improving the offer to consumers, policymakers must look beyond the high street and focus on economic growth. The presence of many workers in and around the high street, especially those in high-skilled roles in exporting companies, plays a vital role in sustaining amenities.

To attract and retain these businesses, the city centre location must offer access to the employees businesses need. This means that skills improvements are also essential for creating healthy high streets.

In addition, weak city centres need to offer businesses quality workspaces. Both the quantity and quality of offices are lower than in stronger city centres,²⁶ which is a constraint on growth. Where the private sector is not delivering space due to low rents or an unproven market the public sector may need to step in, carefully leading small developments.

In the short-term, struggling high streets should be remodelled away from their reliance on retail. As weaker city centres strengthen their economies, they will also need to adapt the stock of commercial property away from the current focus on retail and towards a more diverse mix of uses. One of the aims should be a greater focus on places to eat and drink, as already seen on stronger high streets. For places with too many shops, this may require knocking down derelict buildings and using land for public realm improvements.

Cities should make use of available Government funds, such as the Future High Streets Fund in England, to do this.

3. Strong city economies must manage the costs of growth to remain accessible

The ability of strong cities to offer a range of amenities and prevent vacancies on the high street relies on their appeal as places to work, live and visit. Rising property prices – both residential and commercial – and congested transport systems could threaten this success.

Cities must build up and out to meet demand for housing. A restrictive planning system has prevented the supply of workspace and housing from increasing with demand, resulting in very high prices especially in the strongest city centres.²⁷ Tackling this will require both densification and expansion.

Policy recommendations for government

1. Put less weight on direct economic outcomes in decisions about cultural investment

Many bids for cultural funding currently require cities to show how investments will lead economic development and achieve objectives such as the creation of jobs. This means cities have to build this into the design of their policies. But this is unlikely to be feasible in many of the weaker cities these policies are aimed at. As a result, this criterion can unnecessarily divert attention from more important and feasible objectives of investments in the provision of culture.

2. Funds aimed at reviving the high street should look beyond retail

One hundred towns and cities are currently developing business cases for how they would use their share of the £1 billion Future High Streets Fund. The new government must allow, and encourage, this money to be spent on more than amenity improvements, supporting the remodelling of high streets away from retail and towards more office space and a higher quality public realm.
The Fund should be seen as a complement to funding for wider economic goals, such as the National Productivity Investment Fund, because high street improvements will only be successful if city centre economies can be strengthened. This larger fund should recognise the importance of thriving city centre economies to the national economy, and also be available to cities investing to make their centres more attractive business locations.