Today, the Centre for Cities publishes the latest instalment of its annual Cities Outlook report. It drills down into the performance of Britain’s 64 largest cities over the last decade: a time of boom, bust, recovery and two governments of three different colours.
One of the primary indicators we use for measuring the success of a city’s economy is population growth – and the story we see during this time is rather alarming, if not entirely surprising.
Over the decade to 2013, cities in the South grew at double the rate of cities elsewhere in the UK. Combined, the cities of the South had 11.3 per cent more people living in them in 2013 than in 2004, compared to 5.5 per cent for cities elsewhere in the UK.
Click to expand. Source: Cities Outlook 2015.
Milton Keynes, Peterborough and Swindon were the top performers on population growth, experiencing increases at double the rate of the national average. But while their performance was very similar on this measure, there were interesting differences between the cities when looking at other markers of economic performance.
Milton Keynes is the stand-out performer on most of the fundamentals. Its strong population growth – it had 36,000 more people living in the city in 2013 compared to 2004 – has been matched by a large increase in the number of businesses and jobs in the city. Its overall jobs growth of 18 per cent makes it the fastest expanding city over the last decade. The challenge for the city over the next decade is to continue to support the economy with its pro-growth attitude, making sure that the rise in population is matched with a rise in new homes.
You can see an opposing trend at work in Swindon. While there was a large increase in the number of businesses to match the increase in its population, it had fewer jobs in 2013 than it did in 2004, seeing a decline of around 7,000 posts.
Two things appear to be happening here. Firstly, Swindon’s economy appears to be shifting rapidly to a greater focus on small and medium-sized businesses; it’s a trend which follows the closure of larger businesses such as Woolworths, which had a distribution centre in the city.
This means that the loss of one big firm employing thousands has been replaced by a host of small start-ups, employing only a handful at a time. In this respect, Cities Outlook 2015 captures Swindon at a time when it is undergoing a structural change in its economy – one that reflects many of the bigger, global macro-economic trends starting to take hold across much of the nation.
But the discrepancy between population growth and declining jobs numbers can also be explained by its growing appeal as a residential destination. An increasing number of people are choosing to live in Swindon, where house prices are more affordable than in neighbouring areas, but commute out to work elsewhere.
The main beneficiaries of this have been the rest of Wiltshire and nearby places like Winchester. The challenge for Swindon is to support future job creation, particularly in its city centre, to increase the job opportunities available to its residents.
Peterborough falls somewhere in the middle. While the city has seen its number of jobs increase over the last decade by four per cent, these jobs have tended to be in lower skilled fields than those created in Milton Keynes. The challenge for Peterborough is to build on the success of the last 10 years by encouraging growth in higher-skilled, higher-paying industries, to widen the choice of jobs available in the city.
Even in cities that have seen very similar increases in their populations, the challenges that each face in growing their economies in the future are very different. This is why the recent announcement of devolution to Greater Manchester is so important – cities face very unique challenges that are best addressed by tailoring policy to these needs.
The clear mission of the next government must be to extend devolution to other places, allowing them to tackle the things that constrain their growth and to play an even bigger role in the national economy.
Paul Swinney is senior economist at the Centre for Cities.
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