Gap between Britain’s “best and worst” performing cities widening

The economic gap between the UK’s “best and worst” performing cities has dramatically widened since 2004, according to the Centre for Cities 2015 Cities Outlook report.

Said to indicate signs of a “two tier economy of dynamism and decline”, the annual index surveyed the economic health of Britain’s 64 largest cities and towns.

It found that national growth between 2004 and 2013 was largely driven by a small cluster of cities located mainly in the South which have grown at double the rate, 11.3%,  compared to 5.5% in cities elsewhere for job creation, the number of new businesses and population growth.

In contrast, a number of UK cities such as Blackpool, Rochdale and Gloucester have seen growth stagnate caused by migration of young and skilled workers, lack of new businesses, and falling employment opportunities.

From 2004-2010, Milton Keynes had the highest population growth (36,200) and the highest jobs growth (18.2%) while Aberdeen, London and Warrington saw the highest growth in the number of new businesses; 40.6% growth, 32.3% growth and 29.2% growth respectively. Edinburgh, Coventry and Bristol also made the top 10 for start-up rates.

Southampton, Hull and Worthing were found to have some of the lowest new business demography over the last 10 years while Grimsby and Blackpool had the lowest start-up rates with, alarmingly, fewer new businesses in 2013 than there were in 2004.

The index also highlighted that even the best-performing cities in the South are facing “threats to their further progress” primarily due to unprecedented growth in housing prices – London, Cambridge and Oxford have had the largest increase in their affordability ratios over the last 10 years, points which we raised in the Startup Cities Index of 2014.

On the back of the findings and in light of the impending general election, the Centre for Cities has called on all parties to provide incentives for cities to support economic growth and wants there to be “greater flexibility to ensure money can be spent where it is most needed”.

Despite the widening economic divide, on a national level the report concluded that the UK economy has gathered pace in the last 12 months and is now 2.7% larger than it was pre-recession, with 1.3 million more people in employment.

Commenting on the findings, Centre for Cities acting chief executive, Andrew Carter, said:

“The stark picture the report paints of the enormous gap in the fortunes of UK cities over 10 years underlines why a ‘steady as she goes’ approach must be scrapped. We must move from thinking that bundling up new funding streams with bureaucratic delays, or simply tinkering around the edges with well-intentioned announcements, will be enough to reverse trends that are becoming increasingly entrenched.

“Cities need long-term funding and strategic planning, and policies that go to the heart of addressing the key drivers of economic growth – including transport, planning, skills and housing. This report throws down the gauntlet for all parties to turn their recent interest and pledges around cities and devolution into a clear plan to grow jobs and businesses, and improve quality of life throughout the UK.”