1. Economics
August 7, 2015

Which British cities are most dependent on the state?

By City Monitor Staff

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

One of the axioms of contemporary economics is that a healthy place is a place that’s not too dependent on the state. The stronger a city’s private sector, the stronger that city’s economy is going to be.

There’s a lot of truth to this – but it is possible to take things too far. Check out this map showing the ratio of private to public sector jobs in the UK’s biggest cities. The greener the blob, the bigger the role played by business; the paler they are, the smaller.

The occasionally touted notion that private industry in the south east is propping up a north entirely dependent on the public sector turns out to be (shocking, this) nonsense. While the south looks slightly greener, the difference is slight.

Here’s the distribution of the cities with the highest ratio of private to public sector jobs. (The same rule regarding colours still applies regarding colours: those ranked 1st and 2nd are dark green, while the one ranked 10th is beige.)

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The cities least dependent on the public sector employment are in the south. The top two are Swindon, which lies on the M4 tech corridor; and Crawley, which provides staff for (the privately-owned) Gatwick Airport. Both are also, as it happens, commuter towns for London.

But the top 10 also includes Telford (IT), Warrington (consumer goods) and Aberdeen (oil), all of which are well away from the south. In other words, while there is a southern bias, it’s relatively slight.

Here are the cities those with the lowest ratios – that is, those most dependent on the state for jobs:

With the single exception of Birkenhead, the others aren’t in the north at all. It’s one for each of the Celtic countries, then six (count ’em) in the south.

The very lowest ratios of all are reserved for Oxford and Cambridge, both of which are economically-dynamic and frankly rich cities, but whose riches and economic dynamism are fairly dependent on (public) universities knocking out basic research.

Here’s one last chart. This one’s a scattergraph, plotting the private to public employment ratio against GVA per worker, a measure of productivity.

There does seem to be some correlation between a high private employment ratio and richest beyond your wildest dreams (truth be told, it’s tough to tell at a glance). But there are plenty of exceptions, not all of which are dependent on an ancient university.

The obvious conclusion, once again, is “it’s a bit more complicated than you think it is”.

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