1. Economy
April 3, 2019

Slough is the most productive urban area in Britain. What’s that about, then?

By Jonn Elledge

The latest instalment of our series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities.  

On any list of crap British towns, Slough – a town so crap that the future Poet Laureate literally wrote a poem calling on the Luftwaffe to bomb the shit out of it – is likely to feature heavily. It’s grey, it’s industrial, and despite being right next door to Windsor it has few notable historical sites. It is, basically, rubbish.

It’s also, as it happens, the most productive urban area in Britain.

According to the Centre for Cities’ 2019 Cities Outlook report, Slough’s GVA per worker – a rough measure of how much economic activity every worker in the area was responsible for – stood at £82,000. The average across all cities in Great Britain was just £57,000. Even London only managed £80,000.

Here’s a chart of the GVA per worker across the 19 big urban areas of what the Centre for Cities calls the Greater South East (London, the South East, and the East of England) in 2017.

Slough is the only city with GVA per worker greater than the capital, but several other crap towns, for want of a term less likely to get me in trouble, in the London commuter belt are also doing surprisingly well. Crawley, Aldershot, Basildon, even Luton – none of these are places we think of as economic powerhouses, or even particularly wealthy. And yet, in 2017, all had higher productivity than places, like Oxford and Cambridge – places that we do think of that way.

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Just to check this wasn’t a fluke, here’s the same chart for 2015:

Basildon is slightly lower down the rankings, but otherwise, it’s the same story.

So why are these slightly rubbish towns generating so much wealth? Proximity to London is clearly one factor. Proximity to an airport helps too, one suspects, since both Slough (Heathrow) and Crawley (Gatwick) are high up the list. The fact Slough, Reading and (outside the Greater South East) Swindon all have high productivity suggests that the much vaunted M4 tech corridor too is a factor.

But none of this seems sufficient to explain the rise up the charts of, for example, Basildon. So what’s going on?

“The short answer is we don’t know for sure,” the CfC’s head of policy Paul Swinney told me, reassuringly. “There are a number of businesses that don’t necessarily want to be based in London, but that do want access to a lot of high skilled workers.” By way of example, he points to companies like Mars (UK headquarters in Slough) and Pepsi (UK headquarters: Reading). “Being in the Greater South East definitely gives you that.”

So the need for high-skilled workers, who thanks to England’s insanely divided economy, tend to cluster in the rich south east, explains the desire to be close to London. But why not be based in the capital itself?

There are two possibilities. One is cost: an office in Slough is going to be a lot cheaper than an office near Oxford Street, especially if you require a lot of space. Another relates to the benefits that paying the more expensive space is meant to bring.

The agglomeration effect – in which big places tend to be more productive – comes about because companies that are based close together share information and expertise, as people gossip in bars, move to new employers and so on. In banking or professional services, it’s those knowledge exchanges from which a lot of the value comes.

But while the types of companies that base themselves in places like Slough may be looking for lot of high skilled workers, “They’re probably not in a position where want to go share load of information with their competitors,” says Swinney. “Especially in manufacturing, some of that information is quite commercially sensitive.”

So these businesses “don’t necessarily benefit from knowledge spillover element of agglomeration. They don’t want a central London location, because they won’t benefit from the advantages it offers.”

The obvious question then is why these companies couldn’t be based in Wakefield or Sunderland. Places like that, Swinney says, “have a lot of cheap land but not a lot of access to high skilled workers”. The north-south divide isn’t just an economic gap – it’s a skills one.

Jonn Elledge is editor of CityMetric and the assistant editor of the New Statesman. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.

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