Today we launched our sixth Cities Outlook report, our annual index of the economic performance of 64 UK cities and towns.
It’s another really rich report, from fascinating individual facts (did you know that Cambridge has more patents approved than the next 10 cities put together?) to insightful longer term trends about what makes cities economically successful over time. See www.citiesoutlook.org or our Factbook if you’d like further details city by city.
This year it’s clear that the fundamentals still matter most: the cities with the highest skills levels, strong transport connections and a mix of industries are the ones that perform best, whether in boom years or during the downturn.
But there are also some surprises, illustrating the extent to which cities can be affected by individual employer decisions. Take Sunderland, Hastings and Aldershot. Our analysis shows that the downturn falls into two parts: 2008-9, when some cities were still relatively unscathed, and 2009-2012, when some cities were hit hard at the same time as others started to recover.
Sunderland and Hastings were two cities that felt the recession early but, because of decisions by the private sector (notably Nissan and Saga), they experienced a relative recovery between 2009-2012. Aldershot and Swansea, by contrast, did not feel the recession as sharply until 2009, when public sector cuts meant that the cities were hit hard.
Every year we have a special focus on an issue that we predict is going to be important in the year ahead, and this year – when we really need an economic boost – we’ve focused on housing. We already know that the UK as a whole needs new houses (at least 232,000 each year, according to the Government) and that building 100,000 new houses could support up to 150,000 jobs. But a quick analysis of cities shows that the failure of national housing policy to focus on place could undermine its ability to boost the economy, whether local or national.
Some of the UK’s most successful cities, such as Oxford, Cambridge, London and Bristol, are places with low vacancy rates and in which people struggle to afford to buy. This affects the economy because businesses cannot access the workers they need, people cannot access the jobs they want, and it increases the costs of doing business in a local area. These are places that desperately need new houses.
Other cities, such as Burnley, Liverpool and Hull, have high vacancy rates and are much more affordable. While they may lack certain types of housing – for instance, Liverpool is in the bottom ten cities for executive housing – they are unlikely to benefit from a focus primarily on building new houses. Instead, incentives to invest in refurbishment and retrofitting could help those economies be better places to live and do business for residents and employers alike, and could also create jobs. I'll be writing more on this in the next couple of days.
The key message from Cities Outlook, as always, is that each place is different and that the more that policy allows places to respond to their distinctive local economic circumstances, the more likely it is that local economies will grow.
As I said, I and other team members will be writing plenty more on Outlook in the days ahead but if you have any questions in the meantime, please don’t hesitate to get in touch.
Recent Comments