Metro Growth: the UK's economic opportunity

Today marks the launch of the first output of the City Growth Commission, featured on www.citygrowthcommission.com. Building on feedback from our launch event at the RSA in October 2013, the report takes on a striking infographic-led template to deliver the message.

We argue that the UK’s opportunity for strong economic growth - which addresses wider long-term challenges - requires strengthening our urban system. Our scale of analysis starts with looking to the 15 areas with the largest population, which we term ‘metros’. The Commission will consider the potential of UK cities large and small.

In Metro Growth: the UK’s economic opportunity, we argue that a new global picture of growth is taking shape. This is not about a transfer of economic power from North to South, or West to East. It is about the rise of cities.

The UK is home to one of the world’s truly global cities. But too many of our urban areas outside London are failing to achieve their growth potential. We will explore what political powers and governance arrangements are needed to deliver this; and how public service reform can improve fiscally sustainability in all UK cities. The report highlights that public spending Greater Manchester exceeds tax take by £4–5bn - equal to roughly £2,000 per person per year, yet metros have little power to change this: over 90% of all tax is collected by central government.

Led by renowned economist Jim O’Neill, the City Growth Commission will argue that UK cities have the potential to foster higher, more sustainable productivity, growth and living standards. Metro Growth sets the scene for the Commission’s work.  It explains why ‘metros’ not only drive most of our economic activity, but shape how nearly all of us live and work.  Cities, and their economic success, matter to us all.

The data tells us that we need a sophisticated understanding of the dynamics of population. For example, while both Manchester and Liverpool grew over the last decade, Manchester added 11,000 young people (under 15) while Liverpool lost 9,000 young people.

Focussing on skills, infrastructure and devolution of fiscal and policy-making powers, Metro Growth makes an early exploration into some of the factors currently limiting UK cities’ growth. The report found that:

Skills are consistently identified by businesses as a big barrier to growth. Whilst universities play an important role in developing skills and clustering talented people, graduate retention and attraction strategies are relatively unexplored aspect of economic development.

Although many UK cities are close in distance, weak infrastructure links between regions mean that potential economic relationships are under-developed. Despite the 22,000 commuters that cross the Pennines every day between the largest metros of Yorkshire and the North West, the economic relationships between Manchester and Leeds are less strong than might be expected for cities of their size.

There remain large differences between metros in qualifications. South Sussex Metro (Brighton, Hove, Worthing, Littlehampton and Shoreham – combined population of half a million residents) was found to have 23 residents who are university graduates for every 10 who have no qualifications. By contrast, the Potteries Metro is home to 22 residents with no qualifications for every 10 university graduates.

Metro Growth concludes by looking at the wider conditions in which people are able to contribute economically. The social context matters – for example health and well-being varies greatly between and within metros. Having people will low mental well-being, and poor physical health, limits the opportunities for productive participation in the economy.

As we develop more in-depth research over the next eight months, important areas of investigation remain for the City Growth Commission. Most fundamentally, how can we ensure that the case for metro growth is connected to salient issues for citizens – how to improve living standards – and for government – how to reform public services in light of long-term challenges.

The City Growth Commission runs for 12 months and will seek to influence all political parties in the run up to the next General Election, and make the case for cities to take a new role in our political economy. Following an open call for evidence which ran from October 2013 to January 2014, the Commission will host its first evidence hearing on Tuesday 11 February in Manchester Town Hall.

Follow #citygrowth and @CityGrowthCommission on Twitter for updates.