The employment rate in the three months to December 2012 was up by 0.1 percentage points compared to the three months to September 2011, despite the contraction in GDP over this period.

This increase was mainly driven by an increase in part-time workers – while the number of people working part time increased by 90,000, the number of full time workers fell by 26,000.  The majority of this increase in part time working was because of people being unable to find full time employment. There was an increase of 83,000 in the number of people working shorter hours because they could not find a full time job to reach 1.35 million reflecting the continued weakness of the national economy.

While some cities will remain relatively sheltered from the worst of effects of a faltering national economy, others will continue to be most exposed.

Read the full article on eGov monitor

Speakers include:

Alexandra Jones, Chief Executive, Centre for Cities

Gordon Marsden MP, Shadow BIS Minister

8.30am-10am, ICAEW, Chartered Accountants’ Hall, Moorgate Place, London, EC2R 6EA

This is an invitation only event - contact Niamh Sands if you are interested in attending.

Supported by ICAEW

Looking at the figures for jobseeker's allowance (JSA) claims reveals the wide disparity between our cities in terms of the employment challenges they face.

Read the full article on The Guardian's Local Government Network Blog

Figures released last week reinforced the gloomy national economic outlook, showing that unemployment in the UK continues to rise and now stands at 8.4 per cent – but unemployment is not evenly spread across the UK. While some cities, such as Cambridge and York, have many fewer job seekers than the national average, others, such as Birmingham and Hull (see Figure 7) have very high levels of people claiming jobseeker’s allowance (JSA).

Read the full article on Left Foot Forward.

Read the full article on Lib Dem Voice.

This year, the focus of the research has been on how the deteriorating picture of unemployment is playing out in UK cities. And just like the rises in unemployment seen during the recession, further increases are likely to affect cities across the country very differently. For this reason the approach taken to tackle unemployment needs to be aware of its geographic nature.

Read the full article on Conservative Home.

Today, Centre for Cities published its fifth annual 'health check' of UK cities, Cities Outlook 2012, supported by IBM and the Local Government Association. This year, as well as reviewing how cities have changed over the past year, from population to patents, the independent report has a special focus on unemployment in cities. And the findings make for troubling reading. Over the past three years, the gap between the best and the worst performing cities has continued to widen.

The evidence is striking. 

Read the full article on the Huffington Post.

In this note we put the UK’s unemployment in an international context and also look at the impact that recent economic performance on male and female claimant count rates.

The national economy is struggling to create the numbers of private sector jobs needed to drive growth, or to balance job losses in the public sector. This pattern has played out very differently across UK cities.

Cities Outlook, published today and supported by IBM and the LGA, shows that the gap between cities is widening. In February 2008, the gap in the claimant count rate between Hull and Cambridge was 3.2 percentage points.  By November 2011 this gap had widened to 6.1 percentage points. The report also highlights that there are six times more claimants in the most troubled neighbourhood in Rochdale than there are in the most troubled neighbourhood in Cambridge*.

The annual index illustrates how cities with less dynamic private sectors, such as Hull, Doncaster and Newport will find it more challenging to offset the combination of a weak national economy and the ongoing shrinkage of the public sector.

As cities respond to the challenges of high unemployment, a declining public sector and a reduction in real wages, those that bucked the trend and performed well against the odds, such as Edinburgh, Cambridge and London, have common traits.  They have strong private sectors, high numbers of skilled residents and large numbers of ‘knowledge workers’ – people who work in professions like accountancy, law and finance.

Centre for Cities is calling on the Government to invest in those cities that are primed for growth.  As these cities grow and create jobs they will drive the national recovery.  Cities that are facing more entrenched challenges will require different solutions and support from Government to give residents the skills needed to find jobs and start businesses.

FIVE TO WATCH: Cities such as Milton Keynes and Aberdeen are well placed to drive the national economic recovery in this difficult economic climate.  They have seen high number of business start ups, they have larger pools of highly skilled residents and they are highly innovative with significant numbers of patents registered:

The report also identifies cities that are likely to face real challenges in 2012. They have fewer people with high skills, they have more people claiming Jobseekers Allowance and a larger proportion of their total jobs are made up by the public sector.  Cities like these are likely to be more vulnerable to rises in unemployment in 2012:

Alexandra Jones, Chief Executive of Centre for Cities, said:

“The year ahead is going to be tough for all UK cities but Cities Outlook 2012 shows that some cities are well-placed to kick-start economic growth. However, some cities have been hit particularly hard by recession and the gap between cities is widening. This makes it vital that government policy is tailored to meet the needs of each city rather than one-size-fits-all. What is right for Brighton and Reading will not be right for Dundee and Middlesbrough.

“During 2012 cities should take the lead in shaping their local economies, and the Government should give them the financial and political powers they need to make the right decisions for growth.  Where cities face greater social and economic challenges, the government should offer support to help places adapt and respond to a rapidly changing global economy.”

Steven Peel, IBM Business Development Executive, said:

“Cities Outlook 2012 highlights the challenges confronting cities today and the widening gap between their ability to respond - both should be a cause for concern and a catalyst for decisive action. Leaders will need to be innovative and bold within their cities to identify and create competitive advantage and drive economic growth.

"The 'Smartest Cities' will be those that have a complete and integrated view of the information associated with city systems such as energy, transport, education and employment - the very foundations needed to stimulate economic development. Those that do will be equipped with insight that will enable them to really understand the dynamics within their cities and deliver targeted improvements in the quality of public services and in the creation of attractive locations for people and business alike."

Councillor Peter Box, Chair of the LGA’s Economy and Transport Board said:

“The latest Cities Outlook report highlights the significant differences in how our cities are dealing with the tough economic climate. Councils strongly support the premise that Government policy must be tailored to meet the needs of each individual city, rather than a one–size-fits-all approach. It is vital that local council and business leaders, who understand their cities best, are given the tools they need to deliver growth, create jobs and start businesses.

“Councils have already started the process towards re-energising cities and communities and must now be allowed to go further. Changes to the planning system can help, but the LGA is now calling on the Government to localise the running of apprenticeship schemes and the ability to improve transport infrastructure to increase growth further.”

For more information, please contact

Rachel Tooby, External Affairs Manager, Centre for Cities: 020 7803 4316 / 07748 183 026 / r.tooby@centreforcities.org

Amanda Ciske, External Affairs Assistant, Centre for Cities: 020 7803 4315 / 07972 836 457 / a.ciske@centreforcities.org

John Galvez, IBM Media Relations: 07734 104275 / john.galvez@uk.ibm.com

Notes to editors:

* These neighbourhoods (small statistical areas as defined by ONS) are those with the highest job seeker’s allowance claimant rates of any neighbourhood in their city.

Cities Outlook 2012 is available upon request or at www.centreforcities.org/outlook12.  The Centre for Cities is very grateful for the support of IBM and the Local Government Association (LGA) for this independent report.  Except where otherwise indicated, all views expressed are those of the Centre for Cities and do not necessarily reflect those of IBM or the LGA.

Further data city-by-city on individual rankings for the 64 cities is also available at www.citiesoutlook.org

The Centre for Cities uses the Department for Communities and Local Government Primary Urban Area (PUA) definition of a city for the English urban areas included in Cities Outlook 2012.  Primary Urban Areas are an aggregate of local authorities that make up the ‘built-up’ area of a city, defined as having a population of 125,000 or more.

PUA data only exists for English cities. For Welsh and Scottish cities, we have used the corresponding local authority area, with the exception of tightly-bounded Glasgow, where we have defined the city as an aggregate of five local authorities: West Dunbartonshire, East Dunbartonshire, East Renfrewshire, Renfrewshire and Glasgow City. Belfast has been defined as the aggregate of Belfast City, Carrickfergus, Castlereagh, Lisburn, Newtownabbey and North Down.  The full breakdown is available at www.centreforcites.org/puas

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

About IBM

For more information on IBM's Smarter Cities initiative visit: www.ibm.com/uk/cities

Smarter Cities is a trademark of IBM.

For more information about IBM visit: www.ibm.com

About the LGA

The Local Government Association (LGA) is here to support, promote and improve local government.

Local government is facing the most radical changes, as well as the most significant opportunities, in a decade.

We will fight local government’s corner and support councils through challenging times by focusing on our top two priorities:

• representing and advocating for local government and making the case for greater devolution
• helping councils tackle their challenges and take advantage of new opportunities to deliver better value for money services.

We aim to set the political agenda and speak in the national media on the issues that matter to council members.

The LGA covers every part of England and Wales, and works with the individual political parties through the political group offices.

Visit www.local.gov.uk

The ongoing economic challenges will require national Government to combine responses that support those cities best placed to support growth, as well as those cities that are still grappling with long term economic restructuring.  

2012 needs to be the year that city autonomy, underpinned by Government support where required, becomes a reality.

Now in its fifth year, Cities Outlook 2012 is the authoritative economic index of the 64 largest cities and towns in the UK. Cities Outlook 2012 sets out how different cities are set to fare through the challenging economic circumstances of the year ahead. The report identifies the cities where glimmers of economic growth are likely to be evident, and those that are vulnerable to further economic stagnation.

Cities Outlook 2012 focuses in particular on the nature of unemployment in different cities, distinguishing between those cities that have been hit hard by the impact of the recession, and those that are struggling with the challenges of long term and youth unemployment.  The different composition of unemployment in different cities means that a nuanced, flexible and place-based policy approach is needed.

Download Cities Outlook 2012 

Further city-by-city data is available on the Cities Outlook data app: www.citiesoutlook.org

To further information or to request a hardcopy of the report, please contact Niamh Sands.

For any media enquiries, please contact Rachel Tooby.

Cities Outlook 2012 is supported by IBM and the Local Government Association.

In 2012 it will be important to up the pace on policies for local growth and put words into action.

Read the full article on the Regen.net

This month’s labour market data contains many fewer surprises than the large deterioration revealed in last month’s figures.  

It is true that unemployment in the three months to October was much higher than in the three months to July.  But despite many news outlets reporting this as a fresh rise in unemployment, much of this increase was revealed in last month’s data.  When comparing the unemployment rate for the three months to September to the rate for the three months to October there was no change – the unemployment rate remained at 8.3 percent.  

Such a stabilisation is likely to be only a brief respite.  Forward looking indicators, such as the Report on Jobs, suggest that the demand for workers is deteriorating.  Given that the outlook for the UK economy is weak and public sector jobs losses are likely to continue there are likely to be further increases in unemployment in the coming months.

In this paper we answer three questions which provide insight and advice on how to best support economic growth in Preston.

• How does Preston’s growth affect the wider Lancashire economy?

• What has been the pattern of spatial development within Preston in recent years?

• How can Preston do to support future growth for the benefit of both the city and wider county?

Key recommendations

• Given Preston’s key role in the wider Lancashire economy, Preston City Council, Lancashire County Council and the Lancashire Local Enterprise Partnership should work together to support growth within the city.  This will be to the benefit of the wider Lancashire economy and its residents.

• To support future economic growth, Preston City Council and Lancashire County Council should look to strengthen the appeal of the city centre to businesses by easing transport bottlenecks, becoming more business friendly and improving office space provision where appropriate.

• The Lancashire Local Enterprise Partnership should use its £12.9 million allocation from the Growing Places Fund to help kick-start development within Preston city centre in the wake of the decision not to proceed with the Tithebarn development in its current format.

Download the full report.

The report, Strength from Within: Supporting economic growth in Preston, shows that Preston plays a key role in the performance of the wider Lancashire economy. For example, it was Lancashire’s strongest performer in the ten years before the recession, increasing its number of private sector jobs by 16 percent. And it acts as a key source of jobs is the primary supplier of jobs to the wider area – there were around 5,000 more jobs than working residents between 2007 and 2010. 

The research also shows that although Preston is performing well, to build on its success it needs to improve its city centre to support business activity.  Of the 200 businesses that relocated to Preston between 1998 and 2008, just 30 chose to locate in the city centre.  If Preston is to remain competitive in the global market, it must improve its business environment in order to attract companies that employ high skilled workers to locate and remain in the city centre.

Centre for Cities recommends that Preston City Council, Lancashire County Council and Lancashire LEP should work together to implement policies which can improve the business environment in Preston city centre to encourage companies to locate there.  As part of this the Lancashire LEP could use money allocated from the Government’s Growing Places Fund to help kick-start city centre development and give businesses greater confidence to invest in the city centre. 

Paul Swinney, Economist at Centre for Cities said:

“Preston was the third strongest performer out of all England’s cities between 1998 and 2008 in terms of private sector jobs growth. This was good news for the wider Lancashire economy; this means that growth in the city should be supported rather than constrained to support wider county growth. This does not mean a ‘Preston only’ approach should be taken, but in this economic climate the LEP should leverage Preston’s strong potential to create jobs for the benefit of the wider area. 

“To support future growth, the City and County Councils and the LEP need to continue their efforts to improve the business environment in the city centre. Preston’s future performance could be undermined by the poor performance of its city centre. In light of the collapse of the Tithebarn development, the challenge now is going to be bringing new development forward. All local partners should work together in order to support and secure development in the city centre in a tougher economic climate.”

Councillor Peter Rankin, Leader of Preston City Council said:

“Preston has done well but it could do so much better.  Now more than ever Preston needs to be a key focus and priority for future growth and development in Lancashire.  Preston has the potential to be the real economic power house for Lancashire and we will continue to work with our partners such as Preston Vision, Lancashire County Council, and the Lancashire Economic Partnership to secure new investment and development in Preston.”

ENDS

For further information, interview requests, or for an advanced embargoed copy of the report please contact Rachel Tooby on 020 7803 4316 / 07748 183 026 / r.tooby@centreforcities.org or Amanda Ciske on 020 7803 4315 / a.ciske@centreforcities.org

Notes to editors

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

But not all cities are equally well-placed to grow.  Some are struggling with long-term economic restructuring and need to replace lost jobs before they can reach a position from which they can grow their economies.  Private Sector Cities looked at private sector jobs growth in cities between 1998 and 2008 and ranked cities as buoyant, stable or struggling based on their performance.  It concluded that, while private sector jobs grew in cities across the country, the largest grouping of buoyant cities over that period, with growing economies and new private sector employment, was in the Greater South East (GSE).  The Greater South East cities created approximately 338,000 private sector jobs in the 10 years prior to the recession, 27 percent of England’s total private sector jobs growth.

This report looks in more detail at how cities in the Greater South East have grown over the past 10 years, and what the key opportunities for future growth are.

Download the full report

This work is supported by Regional Cities East

"Today marks an important point in the process of empowering English cities.  The launch of “Unlocking Growth in Cities” by Nick Clegg and Greg Clark the Minister for Cities sets out the territory for a negotiation between the core cities and Whitehall about the devolution of powers and, inevitably, limited resources to city authorities and LEPs.  If followed through many of the commitments made by the Deputy Prime Minister have the potential to empower our core cities to drive local growth, and stimulate the private sector investment needed to create jobs and drive the national recovery. 

In his speech, Clegg touched on some initiatives and funding that has been previously trailed.  Importantly it confirms that we can expect the implementation of the business rates scheme and associated approach to TIF in the near future.  The Centre also welcomes the introduction of a "cities bonus" for those cities which decide to pool their business rates revenues. This is something Centre for Cities has been championing through our research on financial incentives this year.  Working across boundaries to make investments that benefit the city as a whole are now being incentivised, a clear measure of Government’s commitment to making the benefits of business rates retention spread across a city’s economy.

The core of what lies ahead is on “menu” of “bold options” which indicate what Whitehall powers and funding controls are up for discussion. This marks important progress and if followed up could start to put power back in the hands of cities.

Clegg’s announcement recognises that cities have very different needs and priorities – what is right for Liverpool will not be right for Bristol.  This announcement only marks the start of a vitally important process.  As the UK economy and cities face a very torrid couple of years in terms of economic growth and public sector budgets, empowering cities to act and spend wisely is the best way to create sustainable economic growth and meet the needs of the local population.  But the outcome for cities will be variable and its important that the conversation quickly moves on to engage all cities which can contribute to the economic wellbeing of the UK."

For further information please contact Rachel Tooby on 020 7803 4316 / 07748 183 026 / r.tooby@centreforcities.org

The report Investing in growth cities: Fulfilling the growth potential of the Greater South East cities shows that cities in the Greater South East of England, excluding London, contributed 338,000, or 27 percent, of the UK’s private sector jobs growth during the 10 years prior to the recession. These cities have the strongest group of economies in the UK and, with national growth forecasts poor, are a major growth asset. Yet despite their economic buoyancy, would-be investors have a surprisingly low awareness of their potential.

The report, sponsored by Regional Cities East, shows that strong population growth, higher than average employment rates and high demand for both commercial and residential property, are common strengths among the Greater South East cities. These are all factors which should attract the private sector to invest in development and create much-needed private sector jobs.  Centre for Cities analyses how the cities can take advantage of their strengths and work together to raise their profiles with potential investors and developers.

Based on extensive stakeholder interviews the report urges these cities to create strong, realistic visions for development and put resources in places to attract and work confidently with private sector partners.  The report also recommends the cities reduce risks and remove barriers to development, for example inefficient planning, which can be a decisive factor for investors.

Tom Bolton from Centre for Cities said:

“During this period of slow growth, these cities are fundamental to the UK’s economic future, but as the Government’s devolution agenda gains pace they need to understand and use their individual strengths.  The cities each need to set out, realistically, what it is they want to achieve and communicate it clearly to developers in order to compete in an ever more globalised economy.”

Neil Darwin from Regional Cities East said:

“With an extended period of economic difficulty our cities take on a greater role in delivering the recovery we are all seeking. Cities remain the engine for the country however, those in the Greater South East offer real potential and appetite to grow further. We are keen to explore new mechanisms and work closely with government and private partners to deliver a strong recovery”

ENDS

For further information please contact Rita Beden r.beden@centreforcities.org / 020 7803 4303 or Rachel Tooby r.tooby@centreforcities.org / 020 7803 4316.

Notes to Editors

The table below shows a selection of factors which should attract private sector investment. A more detailed version of this table, showing all the key factors, can be found on page five of the report.

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

The Centre for Cities is grateful for the support of Regional Cities East for this independent report.  Except where otherwise indicated, all views expressed are those of the Centre for Cities and do not necessarily reflect those of Regional Cities East.

About Regional Cities East

Regional Cities East works with its member cities to address common issues and challenges locally, nationally and globally. It provides a collective voice for the cities it serves by representing and promoting their common interests to Government, regional partners, private industry, and other key decision-makers. 

Cities Outlook 2012

Our annual health check on UK cities - Cities Outlook 2012 - shows that the gap between places has widened since the recession, with cities like Cambridge, London and Edinburgh continuing to do well, while cities with struggling economies are falling further behind.

See coverage in the FT, Independent and BBC News

Strength from within

Preston plays a key role in the wider Lancashire economy and in the decade before the recession led the way in private sector job creation. Our latest Partner City report demonstrates that in order for Preston to attract more private sector jobs growth, it needs to improve its city centre.

You can find more on the story in: Lancashire Evening Post and Blog Preston

Learning Curve

Our latest report - Learning Curve, supported by ICAEW -  focuses on skills, and finds that there is a strong relationship between Maths and English GCSE attainment and youth unemployment, and ultimately a city's economic performance.  

Read more on BBC News, the Telegraph, Egov monitor and the Huffington Post. 

A Taxing Journey

The Local Government Resource Review has proposed three possible options for introducing Tax Increment Financing (TIF) to England. A note published by Centre for Cities analyses these options and how best they might suit different cities and projects. It calls for a defined "ringfenced" TIF model to be introduced but emphasises that not all cities will benefit a TIF style solution.

See coverage in Planning and LocalGov.

LEPs one year on

To mark the first anniversary of the 24 original Local Enterprise Partnerships, Centre for Cities published a short study which finds progess is varied. We recommend that Government provides additional resources and powers to stronger LEPs, and support for those that are lagging behind.

See the response in The Telegraph, Financial Times, Planning, Estates Gazette, Manchester Evening News, Northern Echo , Birmingham Post, and Fresh Business Thinking. Join the debate on the blog.

Capital Gains

As the consultation period for the Local Government Resource Review comes to a close, Centre for Cities has released a research notedrawing on previous publication Room for Improvement, looking specifically at what the implications might be for London. With the changes set towards localised business rates, this note suggests that London's local authorities might benefit from pooling the rates gained across London and encourages bold measures to maximise growth across the capital.

The note has been picked up in Planning, London Loves Business, eGov Monitor and Public Finance.

Will London profit from the Olympics?

Joanna Averley contributes to the debate on CNN, with lessons from Barcelona, Montreal and Athens.

Centre for Cities welcomes Greg Clark, Minister for Cities

The Government announcement of a ministerial group dedicated to supporting UK cities is strongly welcomed by the Centre. Following the announcement of Greg Clark's additional role we hope that he will champion the economic importance of cities, ensure strategic bodies such as LEPs are given the powers to perform effectively and that he work with all UK cities, beyond the core eight in England.

See comments from the Centre in The Guardian.

Room for improvement

Our latest report Room for improvement provides an analysis of the relocalisation of business rates, ahead of the Local Government Resource Review (LGRR), and  the New Homes Bonus (NHB). We demonstrate that they have the potential to incentivise local authorities to be more pro-growth and pro-development, yet urge that policy be bold and simple in order to benefit cities and the wider economy.

Room for improvement was cited in the Government's local government resource review consultation document and our Financial Incentives strand of work has been covered by The Yorkshire Post, Local Government Chronicle, eGovmonitor, Planning, Public Finance, the Express and Star and  Property Week

Moving on up, moving on out?

Jobs for lower skilled workers are increasingly moving away from pricier city centres to edge-of-town locations, areas which are often less accessible by public transport. The first of our City Collaboration papers, published today, uncovers that individuals with lower level skills are likely to work in locations closer to their home and similarly are less likely to have access to private transport.

This is the first of two papers examining how links between cities might strengthen certain areas has attracted national media coverage in The Observer,  The Telegraph and the Guardian as well as in LocalGov.co.uk.

UK cities: the growth split

Cities Outlook 2011 is back in the news with the FT running an extensive piece on the most vulnerable cities and those with the highest potential to grow. See the FT's interactive map and indepth analysis from Leeds and Sunderland.

Big shot or long shot?

Directly elected mayors, have the potential to overcome some of the key local governance challenges as demonstrated in the report by Centre for Cities and Institute for Government. We suggest that the model could offer greater possibility of strategic planning thanks to fixed term leadership and the exercise of formal and informal powers; as well as more accountability and firmer links with local business. However, we think the model to be outlined in the Localism Bill could go further, and propose that some cities may benefit from 'metro mayors'.

See coverage in The Guardian, MSN, Planning, the Yorkshire Post and Public Finance.

Sink or Swim?

Almost a year on from the announcement of Local Enterprise Partnerships (LEPs) their influence and power on central growth policy has increased thanks to the Budget announcement on Enterprise Zones. But the question is, have they been given enough power? And how will they convince local business to get involved? We have published a report which considers how LEPs have progressed so far and poses questions for their future.

See coverage in Planning, the Birmingham Post, Yorkshire Post and LGC.

Starter for Ten

As UK universities are faced with spending cuts, increased fees and caps on student numbers, we have released a short paperdiscussing how the surrounding area might be affected. With local employment and student spending displaying a greater impact on city economies than universities' interaction with business, questions are raised about how cities might work with universities for mutual economic benefit.

See national coverage on BBC News and the Guardian, as well as stories in the Yorkshire Post, Plymouth Herald, Birmingham Post,Worcester News, Public Finance, MSN, Planning and LGC.

What would Maggie do?

With Enterprise Zones likely to be reincarnated in the March Budget, we’ve launched a paper arguing that the 1980s model will neither achieve the desired outcomes nor be cost effective.  Instead, ‘Local Growth Zones’, with rapid planning processes and funding towards skill interventions, are a better way of taking an area-based approach to economic growth.   See coverage in the FT, Times, Belfast Telegraph, Birmingham Post and LGC.

This note forms part of our 2011 financial incentives research project, supported by CBRE and SNR Denton.  To find out more about our upcoming work please contact Kieran Larkin.

Following the Budget announcement on Enterprise Zones, our research has also been picked up in the Guardian, Daily Mail, FT, theEconomist and Radio 4's Today programme. The paper also regained momentum in the media after a further 11 zones were announced with an appearance on Newsnight, Radio 5 Breakfast and a mention in The Independent. 

For press enquiries, please contact:

Rachel Tooby, External Affairs Manager
020 7803 4316 r.tooby@centreforcities.org 

Mr Osborne resisted the temptation to loosen the purse strings – many of the announcements involving reallocating money given the Chancellor’s continued emphasis on deficit reduction. But many of the new announcements have implications for economic growth in cities, and we set on in our briefing.

Download the full briefing

Projected public sector job losses, 2014/15

(Source: Cities Outlook 2011, Public Sector Job Losses, based on OBR October 2010 estimate of 330,000 total public sector job losses)

Read the full article on the New Statesman

Following on from the launch of our Learning Curve report, this event will discuss how cities can tackle their skills shortages, especially at the intermediate level.

Speakers include:

Joanna Averley, Interim Chief Executive, Centre for Cities

Gordon Marsden MP, Shadow Bis Minister

The problem is that current skills attainment is serving to reinforce existing skills patterns across England’s cities rather than improving them.  This is particularly true for educational attainment.  Although GCSE attainment in general has showed strong improvement in recent years in cities with weak economies, this has not been reflected in GCSE Maths and English attainment.  This is a concern given that numeracy and literacy skills appear to be playing an ever larger role in the labour market. 

While we recognise that skills policies are first and foremost about people, they require a place-based approach to address the clear spatial pattern in skills attainment.  This will require interventions from Government, schools, Local Enterprise Partnerships and Work Programme providers to address the skills challenges that our cities face.  

Policy recommendations

• Greater emphasis should be placed on Maths and English attainment, particularly in struggling cities

• Publicly funded adult education and training should be targeted towards improving core skills amongst low skilled, disadvantaged groups

• As business-driven organisations, Local Enterprise Partnerships (LEPs) should work with skills providers and employers to improve access to adult education and training LEPs should work with employers and skills providers within the LEP area to increase employer demand for job-related training  

Download the full report

Annex: Full table of city GCSE attainment and youth unemployment

October 2011 Youth Unemployment data by city

Video: Paul Swinney presents Learning Curve

Selected coverage • BBC News • Telegraph • Huffington Post

Mapping youth unemployment and GCSE attainment:

This work is supported by ICAEW.

The report, Learning Curve: Schooling & skills for future jobs, sponsored by ICAEW, shows that between 2007 and 2010 an average of almost 50% of pupils in cities left the education system without A* to C grades in GCSE Maths and English.  This, the Centre argues, not only has implications for young people’s futures but also directly impacts on the economies of the cities they live in because businesses do not have access to the pool of skills they need. 

As policy makers seek to support growth and the UK’s global economic competitiveness, this report highlights the need to ensure we have the skills base necessary to meets these aspirations in the long-term.

Most notably, there is an obvious correlation at city level between GCSE Maths and English attainment and youth unemployment.   The research shows cities perform at a similar level when you measure performance of GCSE A* to C grades across all subjects, but strikingly there are huge disparities between cities when looking at pupils’ performance in Maths and English. 

The Centre argues that owing  to a misalignment of incentives in the education system schools are currently encouraged to strive for their pupils to attain 5 A* to C grades, even if these grades are achieved in less academic subjects. This means that schools are responding to the demands of an accountability system which overlooks the importance of Maths and English. 

Centre for Cities is urging the Government to go further in its current plans to reform school league tables to ensure that the education system is aligned with the needs of businesses. Much greater weight should be attached to Maths and English attainment when measuring school performance in order to incentivise schools to focus on these core subjects. The Centre is also calling for the Pupil Premium to be used by local education authorities in struggling cities to help teachers that have the difficult job of helping their pupils to attain qualifications in Maths and English, to do so.

Joanna Averley, Interim Chief Executive of Centre for Cities said:

"Schools have been judged on qualification-driven league tables that do not differentiate in terms of subjects taken.  This acts as a disincentive for schools get good grades in what might be perceived as the tougher subjects like Maths and English.  This is more evident in cities with high youth unemployment, where a cycle is being reinforced because young people are not leaving education with the skills businesses need. 

We know that schools in some areas have a really difficult task, but the system must incentivise schools to support pupils to get good qualifications in Maths and English.  The government has taken steps to address this issue, but they could go further. This rebalancing is needed urgently to ensure schools are equipping young people with the basic numeracy and literacy skills they will need to get a job.”

Mark Protherough, Executive Director, Learning & Professional Development for ICAEW, said:

"Now, perhaps more than ever before, high quality education serves as a vital pathway to economic competitiveness, both in the UK and around the world. If our country is not just to compete, but also to succeed in that global environment, we must reinvigorate our schools and students with the skills that drive the economy. Put simply, the nation’s future depends upon our willingness today to create a new educational partnership, one that raises academic expectations of all children and provides them with the skills, tools and resources needed to help them compete successfully.”

The following table shows how youth unemployment in cities correlates to GCSE attainment.  Those cities with high youth unemployment characteristically have significantly lower attainment in GCSE Maths and English:

For further information please contact Rachel Tooby on 020 7803 4316 / 07748 183 026 / r.tooby@centreforcities.org

The report, Learning Curve: Schooling & skills for future jobs can be downloaded at www.centreforcities.org/learningcurve

Watch Paul Swinney's overview of the report findings and recommendations

Notes to editors

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

The Centre for Cities is grateful for the support of ICAEW for this independent report.  Except where otherwise indicated, all views expressed are those of the Centre for Cities and do not necessarily reflect those of ICAEW.

About ICAEW

ICAEW is a professional membership organisation, supporting over 136,000 chartered accountants around the world. Through our technical knowledge, skills and expertise, we provide insight and leadership to the global accountancy and finance profession. Our members provide financial knowledge and guidance based on the highest professional, technical and ethical standards. We develop and support individuals, organisations and communities to help them achieve long-term, sustainable economic value. Because of us, people can do business with confidence.

The release of this month’s labour market statistics show that the labour market continues to deteriorate. Unemployment increased by 0.4 percentage points in the three months to September relative to the previous quarter, while the employment rate fell by 0.4 percentage points.

There now appears to be a second wave of unemployment that is hitting the UK economy.  The trend in unemployment in the current economic recovery has been very different to previous recoveries.  For example, unemployment continued to rise for around one year after the end of the early 1990s recession.  But unemployment stabilised very quickly after the most recent recession and remained broadly flat into 2011.

However, it now appears that this stabilisation may have only been temporary.  Recent rises in unemployment now mean that the unemployment rate has reached its highest level since 1996.  Weak economic growth and public sector job cuts could continue to push it higher in the coming months.

• 23 February: Andrew Carter is participating in the Westminster Forum event on Future Local Government Funding
• 14 March: Andrew Carter is speaking on schooling and skills at Digital London
• 21 May: Alexandra Jones is speaking at a CPPS seminar on How Best Can We Achieve Greatest Regional Economic Growth And Capitalise On The Value Of Cities During The Period Of Austerity
• 27 June: Alexandra Jones is speaking at the RTPI Planning Convention 2012

Contact Rita Beden if you are interested in having someone from Centre for Cities speak or present at your event. 

Cities Outlook is the Centre’s flagship annual report on the state of the largest towns and cities in the UK. Since 2008, it has evaluated the economic performance of UK cities and considered their future economic prospects.  It generates a wealth of local and national media coverage, and has become a “must-read” for cities, central government and urban policy experts.  

Guest speakers at the 2012 launch included:

• Greg Clark MP, Minister for Cities
• Cllr Nick Forbes, Leader, Newcastle City Council 
• Cllr Sian Reid, Leader, Cambridge City Council

See our Flickr profile for photographs of the Cities Outlook 2012 launch.

Cities Outlook 2012 is supported by IBM and the Local Government Association.

Read the full article on The Guardian's Local Government Network Blog

TIF is not the answer to local development challenges, but, if designed the right way, it can provide new opportunities for the UK’s cities to invest in their growth.

Download the full report

See coverage • Planning • LocalGov

Defined area TIF was proposed in the Local Government Resources Review (LGRR) consultation in July 2011.  Under these plans, a local authority defines a specific area for development, and the business rates (or property tax) growth resulting from that area for a set period of time would service the debt associated with the upfront infrastructure costs.  This means that authorities could get the much-needed access to funds to unlock growth.

This paper, A Taxing Journey, supported by CBRE and SNR Denton, argues that the ‘defined area’ model should be introduced as a priority to give local authorities the opportunity to invest in the infrastructure they need to bring forward economic growth.  Some of the options for the design of TIF listed by the Government are overcomplicated and could bring uncertainty to investors. In defined area TIF, business rates revenues should not be subject to a levy or included in the reassessment of top ups and tariffs.  This means a larger, more certain revenue stream would be available.

The Government will need to balance business rates retention and a redistributive system. This means that they must ration TIF to some extent. Centre for Cities argues that Government should not be over-involved in how TIF is rationed. Each LEP should be allowed to have TIF debt up to a certain percent of their business rates income that year. This allows places relative freedom to decide what their local priorities should be for investment.

The paper also shows, however, that TIF won’t be the right solution for every local authority.  Strong and relatively certain growth within a defined TIF area is a necessary condition to making TIF work; there must be demand.  A large number of struggling cities also face an infrastructure surplus, rather than a deficit.  Where this is the case, TIF is not the answer for boosting economic performance.

The following charts how office rents have grown in the past year. It shows that growth may not be strong enough in all places to support TIF.

Joanna Averley, Interim Chief Executive of Centre for Cities said,

“For years now, local government has faced a sometimes insurmountable challenge to growth. In order to bring more development forward, new infrastructure—roads, schools, or clinics, for example—must be built. But, authorities often don’t have the funds necessary to pay for this infrastructure up front. TIF could provide a new opportunity to get developments up-and-running by giving local government more access to finance.

There is much confusion about TIF, and the various models currently being considered.  The Centre for Cities argues that commitment is needed to ‘defined area’ TIF to enable areas where there is demand for it to start financing infrastructure projects to boost economic growth.”

Stephen Webb from SNR Denton said:

"Simplicity is essential for TIF to work properly.  The present proposals for TIF are too complicated and lead to too many uncertainties.  The proposals strike a sensible balance between the needs of local authorities and businesses, and the Treasury concerns about budget deficit consequences and abuse."

Neil Parlett, Senior Director, Government & Infrastructure, CBRE, said: 

“Tax Increment Financing is not a panacea but could, in the right economic circumstances, unlock beneficial development. As far as possible, TIF decision making power should be devolved to local authorities and Local Enterprise Partnerships with a light touch oversight from central government. Clear operational guidelines will ensure that TIF is properly applied and anxiety around what comprises eligible expenditure is fully considered.

Of the two TIF options presented, only the second provides a credible basis to contemplate a long-term financing structure that the public and private sectors could positively respond to. The risk of rebasing will remove any prospect of entering into what will need to be long-term commitments. Overall there should be a willingness to look at a variety of both public and private sector led funding models, including TIF, without being prescriptive.”

Notes to editors

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

The Centre for Cities is grateful for the support of CB Richard Ellis and SNR Denton for this independent report.  Except where otherwise indicated, all views expressed are those of the Centre for Cities and do not necessarily reflect those of CB Richard Ellis or SNR Denton.

For further information please contact Rachel Tooby on 020 7803 4316 / r.tooby@centreforcities.org

The first birthday of this initial wave of LEPs provides a good opportunity to reflect on progress towards these goals.  How fast are they growing up?  Does the evidence suggest they are becoming an effective mechanism for promoting local economic growth?

Cause célèbre or cause for concern? collates details on the activities of the 24 LEPs that have now been established for a year and finds progress is very varied, suggesting that the impact of the LEPs will be equally inconsistent.

If LEPs are expected to drive the Government’s growth agenda, they need the tools to do so.  The Government should consider devolving further resources, powers and freedoms to capable LEPs operating at the right scale, for example on transport and skills, and get to grips with underperforming LEPs before it is too late.

Download the full report

Selected coverage • The Telegraph • Financial Times • Planning • Estates Gazette • Manchester Evening News • Northern Echo • Birmingham Post

LEPs at one year

On the anniversary of the announcement of the first 24 Local Enterprise Partnerships (LEPs), the government’s flagship policy for delivering economic growth and decentralisation, a report published today (28 October) by Centre for Cities shows that many of the original LEPs have made limited progress.

Eight have yet to have their boards recognised by government, only two have produced a long-term strategic plan and five do not have a dedicated website.  In some cases, LEPs have appointed huge boards and advisory teams; the South East LEP has 43 board members and the Coventry and Warwickshire LEP has 14 associated focus groups, with at least 160 people involved.  This, the Centre argues, could add a level of bureaucracy and process that might slow decision-making. 

In addition to these issues, some LEPs also face mismatches between spatial geography and the political and economic reality and pressures of partnership working across new boundaries.

Centre for Cities argues that LEPs still have potential if the government acts now to empower them to meet the rising expectation that they will be primary drivers of the government’s growth agenda.  The government needs to give capable LEPs the resources, powers and freedoms to take forward policies for local growth by devolving responsibility for transport and skills, as well as providing some financial support for the administration of the LEP. 

The study also advises that local authorities have a key role to play in this process by overcoming local politics and sensitivities and working in partnership for the benefit of the wider area.  They should match the money provided by national government to support the administration of the LEP and offer up some input into strategic planning.

Andrew Carter, Director of Policy and Research at Centre for Cities said:

"While a handful of LEPs are doing really well, many are struggling to come close to meeting the objectives that were set to them by government this time last year.  One of our biggest concerns is the spatial geography of some LEPs does not match the economic and political geography, creating real barriers to effective influence over local economies.  This means that many of the LEPs seem to be falling at the first hurdle, before boards are recognised or strategies considered.

Some are too small, some are too big and several have boundaries which do not recognise important economic patterns such as travel to work areas. Some are developing large shadow boards and focus groups, likely to make it difficult to make strategic decisions for economic growth quickly and efficiently. 

Devolution to local level means varied progress is inevitable, but government set the LEPs up as a national policy.  The LEPs that are progressing quickest, such as Leeds, should be supported to get on with the job.  The government has some difficult decisions to make about some other LEPs, hamstrung by lack of funding or leverage and influence.  If they want them to deliver national priorities, they should ensure they receive the help they need to get their houses in order.”

For more information or to request an interview please contact Rachel Tooby on r.tooby@centreforcities.org / 07748 183 026 or Rita Beden on r.beden@centreforcities.org / 07515 326 289

Cause célèbre or cause for concern? Local enterprise partnerships one year on is available from www.centreforcities.org/lepsatone

The Local Government Resource Review consultation closes today – four months on since Eric Pickles announced plans for a major overhaul of the UK’s local government financing system.

The LGRR may not sound like the most exciting of reforms, but it does have significant potential to change the way councils are funded and how they think about investment in their local economies. Now the onus is on the government to take the next steps to get this right.

Read the full article on Public Finance

Our report, Room for Improvement, set out a wider context for understanding how the design of the LGRR can affect economic growth. Capital Gains evaluates whether London will see growth from business rates retention and highlights the importance of pooling revenues for larger projects.  Lastly, a report we will release at the end of October on Tax Increment Financing calls for the use of Option 2 TIF and outlines specific options for light-touch rationing, a key concern for DCLG in the design of the system.  We would encourage DCLG to utilise these resources in their decision-making processes. 

Cities are an important part of how local government finance reform will affect economic growth and local governance in England; thus their position should be highlighted in DCLG’s considerations.  Within England, cities contain 62 percent of jobs over a mere 14 percent of the land.  Cities are also a major generator of business rates revenues; approximately £13 billion of the £19 billion in rates revenues collected in 2010/11 were collected in England’s 56 cities.  As advocates for and partners with English cities, the Centre would like to emphasise their important position in these reforms.

Designing a good incentive

First, we would like to highlight design elements within a business rate retention system which should be implemented.  Below, we have designated seven factors which create a good incentive: 

• Sufficiently large

• Affect decisions at the margin

• No thresholds

• Incentivise the intended behaviour

• Target appropriate decision maker

• Easy to understand and transparent

• Predictable and long-term 

With these objectives in mind, Government can develop the right kind of incentives to drive economic growth across the UK.  We would especially like to highlight the importance of clarity; incentives should be easy to understand and predictable.  We believe there is room for more clarity in the proposed methods for business rates retention and TIF.  We are very cautious that Government should not design another LABGI system which is too complicated and unpredictable, to the point of losing utility.  The intricate systems of top-ups and tariffs, baselines and resets add complexity to the system and make funding streams unpredictable, thus reducing the functionality of business rates retention and TIF for authorities and investors.  Also, incentives should target decision-makers; this is especially relevant in two-tier authorities.  Regardless of the policy, using these policy design elements will create incentives to change behaviours and support growth.

Recommendations for Business Rates Retention

The design of business rates retention is integral to its success in providing authorities with an incentive to develop and the funds necessary to support growth.  Setting a baseline such that no authority is worse off in the beginning is fair, but Government must recognise that, in any incentive system, there will be those who benefit more than others.  First, determining the rate of local retention will be integral to creating a large enough incentive and balancing it with maintaining a national pot.  We believe a sufficient and balanced rate would be between 40 and 60 percent to be retained locally.  Second, local authorities should be rewarded at the level at which they take decisions.  Finally, incentivising authorities to pool business rates funds to support wider growth at the LEP level will enhance the ability of authorities to tackle challenges they face across their functional economic area and provide stability to the system.  

Recommendations for Tax Increment Financing

Government must first and foremost recognise that TIF will not be right for every city.  TIF is best used where there is insufficient infrastructure to unlock economic potential, and it should be used where there is sufficient growth potential.  An Option 2 TIF is the only viable TIF option under the proposed design of the reforms.  The ringfencing of funds is necessary to provide the certainty and stability of income required for borrowing against revenues.  Ringfenced TIF will, however, require some sort of rationing to prevent national debt from being too high and the pot of national business rates from falling too low.

We propose a light touch approach to TIF rationing in which the amount of TIF borrowing is capped as a proportion of business rates revenues within a LEP.  Authorities, then, must present their business case to the LEP and be approved.  This structure will ensure a sufficient national pot of business rates, maintain an acceptable level of national debt, vet local projects to ensure economic viability, and provide enough local freedom for places to support growth as they see fit.  

In conclusion, our positions touch on those elements of the LGRR which we find most important to not only the success of reform but the success of England’s cities and national economy.  Based on the principles of designing good incentives, we are confident that the structure of the new local government financing mechanisms can be designed for growth.

Contact Andrew Carter for further details.

The short paper, Capital Gains: What does the Local Government Resource Review mean for London?, published on the day of the consultation deadline for the Local Government Resource Review, builds on national research published by the Centre for Cities earlier this year. The paper explains that London as a whole is set to fare well if the changes to local government financing go far enough to give local authorities a real incentive to grow. The table below shows that places such as Tower Hamlets, Southwark and Camden, which have grown their business base significantly in the period up to 2010, would benefit from the reforms should such trends/performance continue.

The report also argues that boroughs should pool a portion of future business rates, which would then be allocated between local authorities for major infrastructure projects, such as transport upgrades like Crossrail, that would have city-wide benefits for London’s economy.  

Joanna Averley, Interim Chief Executive of Centre for Cities says:

“The Local Government Resource Review is an incredibly important piece of legislation. It will have significant implications for how our local councils are funded because one of the proposals in the review is to allow councils to retain a portion of the growth of future business rates.  Currently, taxes on businesses are collected and sent to central government for redistribution. This new system creates an incentive for councils to support commercial development.”

“Inevitably, some councils will fare better than others, but the research found that in London, almost all authorities would see growth in business rates revenues. Pooling is one way to ensure that all councils gain from business rates retention by investing in projects that cross council boundaries and support the needs of London’s businesses and communities. This is an opportunity to radically alter the finance system to drive growth, but the Government needs to ensure that these incentives are strong, simple and long term to make a difference to London’s economic future.”

Ben Harrison, Chief Executive of Future of London says:

“The Local Government Resource Review will have big implications for Boroughs across London. By allowing London Boroughs to retain a portion of the growth of future business rates, authorities will have an added incentive to encourage growth in their area, and greater freedom to invest in the local and London-wide funding priorities required to deliver it.”

“To make the most of these measures, policymakers should now focus on developing arrangements to pool a portion of the Capital’s future business rates. Such arrangements must balance the need for Boroughs to fund local priorities, while ensuring that additional funds can be directed towards the major strategic investments needed to drive the London economy forward.”

The table below shows the growth in business rates of each borough between 2000/01 to 2010/11:

ENDS

For further information or to request an interview please contact Amanda Ciske, External Affairs Assistant at Centre for Cities on 020 7803 4315 / a.ciske@centreforcities.org or Ben Harrison, Chief Executive at Future of London on 020 7380 4544 / ben@futureoflondon.org.uk

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

Future of London is a policy unit and forum focused on the big regeneration, housing and economic development challenges facing the Capital. Future of London brings together a community of regeneration and development practitioners focused on the implementation of new policy, and the sharing of knowledge and best practice across the London local government network. www.futureoflondon.org.uk

Room for Improvement: Creating the financial incentives needed for economic growth can be downloaded at www.centreforcities.org/roomforimprovement

In July, the Government launched a consultation on the LGRR.  As it stands, London local authorities could see the way that they are funded change considerably.  Many local authorities will be able to take advantage of the opportunities created and will be financially rewarded for supporting new development and business expansion.  New revenues may be generated and used to fund infrastructure that enables the capital to continue to grow.  Inevitably, just as some local authorities may benefit from the system, some that do well financially under the current arrangements may not see the growth they’ve seen in the past.  The LGRR also opens up the opportunity for London local authorities to work together in a pan-London business rates pool.  

This research note sets out how the LGRR will impact on London local authorities, drawing on Centre for Cities’ recent report Room for Improvement.  It considers how London local authority’s business rates revenues have grown over the past decade, the role of pooling in the London context, how the reforms could be introduced and the implications of the LGRR consultation.  

Download the full report

Selected coverage • Planning • London Loves Business • eGov Monitor • Public Finance.

We would like to thank Future of London for their involvement in this research.

Key Recommendations

Main priorities for Sheffield City Council include:

• Work to make Sheffield more attractive to business, including taking a creative approach to disused industrial land, using the Enterprise Zone as a lever to improve environmental quality and using new financial mechanisms such as Tax Increment Financing to lever private sector contributions. 

• Work with Sheffield’s two Advanced Manufacturing Research Centres (AMRCs) to advise businesses on marketing Intellectual Property and building international links to sell knowledge as well as products.

• Prioritise skills investment and university links, using Technology Innovation Centre programme funding to bridge the gap between universities and business and continuing to reduce the proportion of the workforce with no qualifications through creative partnerships with Work Programme providers. 

Download the full report

Download the annex

Private sector-driven growth is crucial for a sustainable economic recovery.  Yet, coming up on a year since the first LEPs were formed, many questions still remain as to what their strategic priorities will be, how they will be funded and the extent to which private sector involvement will be genuine.

These events will provide a valuable opportunity to discuss views on the progress of local enterprise partnerships to date and their impact across cities.  We hope to bring together stakeholders from across different regions to share their experiences of partnership working and debate what more needs to be done to ensure that local enterprise partnerships are the transformative body they have the potential to be. 

The next event is scheduled to take place in Birmingham on 17 November and our guest speaker will be Adrian Bailey MP, Chair of the BIS Select Committee and MP for West Bromwich West. Please contact Niamh Sands for further details or if you would like to attend.

Supported by Bircham Dyson Bell:

This interim report identifies some common issues that affect such cities.  It looks specifically at Sunderland and relates these issues to other cities that face similar problems.  It finds that despite strong city wide growth, some mid-sized cities suffer from weak urban cores.  And this weakness of the urban core appears to be having a subsequent impact on the industrial and occupational composition of the economies of these cities.

This paper provides an analysis of these problems and draws out some preliminary findings.  The full report, due to be published in early 2012, will make policy recommendations to fill the policy gap that currently exists for such cities.

Download the full report

Download a map of Sunderland city centre as defined in this report

This work is supported by Sunderland City Council and PwC.

Unemployment jumped to 8.1 percent in the three months to August, the highest rate since July 1996.  Such a rise casts further doubt on the recovery of the private sector in the UK.  Labour has unsurprisingly blamed the Government’spublic sector spending cuts for the weakness of this month’s figures.  The Government has pointed to theincreasing turmoil in the eurozone for the current weakness in economic performance.

It is certainly true that the Government’s spending cuts are having a negative impact on the labour market, but such a policy should be viewed in the wider context of the UK’s budget deficit.  Indeed,the current turbulence in the eurozone shows theimpact that poor public finances can have on national economies.  But such turbulence may well require a policyresponse from the Government to counter the impact it may have on the UK economy.  George Osborne will be hoping that the increase in quantitive easing last week will provide an adequate response. But he is likely to come under increasing pressure to loosen fiscal policy before his Autumn statement next month.

Centre for Cities held our first parliamentary reception in December, hosted by Clive Betts MP.

Guest speaker: Greg Clark MP, Minister for Cities

The reception provided an opportunity to reflect on the Chancellor’s Autumn Statement and look forward to the growth prospects for UK cities in 2012.  

See Flickr for a selection of photographs from the event.

City Leadership: what forms of governance do cities need to grow?

Successful cities need strong leaders and institutions that can enable them to deliver policies that support economic growth.  While there is no one perfect structure that all cities can replicate, there are lessons that cities can learn about how to organise local decision making.  The Government has introduced a number of changes that will impact on the way that cities are led in the future - for example, referendums on the introduction of directly elected mayors in England’s largest cities will be held in May 2012.  

This Cities Network event will look at the different approaches to city leadership being taken in cities across the country and how the introduction of city mayors could strengthen these arrangements. It will draw on the experience of the London mayoralty – posing the question: what next for London’s mayor? – and will review the experience of other city governance structures, such as Manchester’s Combined Authority.  It will also consider the role of new structures such as Local Enterprise Partnerships in increasing the visibility and accountability of local leadership, and ask how these need to develop to transform the economic potential of cities.

Confirmed speakers include Lord Adonis (Director, Institute for Government), Sir Peter Soulsby (Mayor of Leicester), Andy Street (Chair, Greater Birmingham and Solihull LEP), Cllr Barbara Janke (Leader, Bristol City Council), Eamonn Boylan (Chief Executive, Stockport) and Mike Emmerich (Chief Executive, New Economy). 

Download a draft programme.

This event is by invitation only.  Please contact Niamh Sands (n.sands@centreforcities.org / 020 7803 4309) for further details.

About Cities Network

This year, the Centre for Cities will be marshalling our network of partner cities into a formal programme of events and workshops. We will be bringing together city leaders, business organisations, employers and Whitehall throughout the year, to generate practical ideas about how cities can rise to the challenges of cutting budgets while growing private sector jobs.  IBM, who has been a valued partner of the Centre throughout 2010, is a key sponsor for this work.

Our work with cities such as Birmingham, Liverpool, Derby and Sheffield via our Partner City programme has exposed the huge appetite for dialogue and generation of policy ideas between cities, Whitehall and business.

The network will convene four times during 2011, in different cities around the UK. 

For further information on the Cities Network, please contact Niamh Sands.

Supported by:

Data on carbon dioxide emissions for 2008 can give us some insight into how green the UK's cities really are. Middlesbrough has by far the highest carbon dioxide emissions at 27.4 tonnes per capita, more than double the emissions of second placed Grimsby. The industrial makeup of Middlesbrough is clearly a big driver of this given its focus on the chemical and steel industries. Other cities that have similar economic activity also feature within the top 10 emitters – Newport had emissions of 11.8 tonnes of CO2 per capita and Warrington 9.9 tonnes.

Read the full article on The Guardian's Local Government Network Blog

Cities like Crawley, Hastings and Worthing experienced a net increase in jobs of over three percent between 2009 and 2010.  However, places like Swindon, Rochdale and Glasgow continued to lose private sector jobs.  From our past research in publications like Private Sector Cities, it is interesting to see that Hastings has experienced strong jobs growth and this is something we will look into in more detail in future research.  

Jobs growth in the public sector shows a slightly different story however.  Two thirds of cities experienced a net gain in public sector jobs.  Burnley, for instance, saw a net increase in its public sector jobs base of 12 percent.  That said, some cities lost public sector jobs. Swindon for example experienced a contraction in its public sector jobs base of 11 percent from 2009 to 2010.  

This private and public sector jobs data highlights the continuing challenge Government and cities face.  Creating conditions which support private sector job creation in cities will be key as job losses in the public sector really begin to bite.

The latest data from the Business Register and Employment Survey (BRES), shows net job creation across Great Britain between 2009 to 2010.  The data hints at the challenges cities will face as the public sector shrinks over the coming years.

Growth in the manufacturing industry has also stalled, according to the figures, which show that the sector contracted by 2% in Great Britain over that period. Only three in ten cities saw a net increase in the number of manufacturing jobs in their economies. 

Andrew Carter, Director of Policy and Research at Centre for Cities says:

"The data provides a snapshot overview of the state of our economy.  It suggests that cities across the country will continue to face challenges as the effects of public sector jobs cuts really start to be felt.  The figures show that just a quarter of cities grew their private sector base from 2009 to 2010.  This means the government and local authorities need to think carefully about how they can create the right conditions for private sector investment to offset the jobs losses in the public sector.”

Our analysis covers a two year cycle, so we will delve into the detail of these figures as well as other data sources as part of Cities Outlook, Centre for Cities’ annual health check of UK cities, published in January.”

A short analysis of the BRES data including statistics is also available

For further information, or to request an interview please call Rachel Tooby on 020 7803 4316 or 07748 183 026 or r.tooby@centreforcities.org / Amanda Ciske on 07972 836 457 or a.ciske@centreforcities.org

Speakers include:

• Chloe Smith MP, Economic Secretary to the Treasury
• Cllr Gerald Vernon-Jackson, Leader, Portsmouth City Council 

On 12 December we will be launching ‘Investing in Growth Cities’, a research report produced by the Centre for Regional Cities East. 

The report looks at the investment potential for the private sector in the growth cities of the Greater South East of England.  For smaller cities, private sector investment is more significant than ever for enabling development and boosting growth prospects.  The economically buoyant Greater South East includes towns and cities which often fall below the radar of investors.  ‘Investing in Growth Cities’ will help these places think about how to engage with the private sector.

Places are limited at this event.  Please get in touch if you are interested in attending: rsvp@centreforcities.org / 020 7803 4300.

Supported by Regional Cities East

The long-awaited public sector job cuts now seem to be having an impact on the UK labour market.  Excluding employment as a result of this year’s census, employment in the public sector fell by 97,000 between March and June.  Including census jobs, public sector employment fell by 111,000 over the three months.

The deteriorating outlook for public sector workers is reflected in other labour market indicators, such as public sector pay growth and redundancies.  But it is also impacting upon headline labour market indicators – unemployment is 0.3 percentage points higher in July than it was three months ago.

This re-emphasises the requirement for the private sector not only to replace the jobs lost during the recession but to offset those currently being cut in the private sector too.  And as Cities Outlook 2011 showed, the private sectors of some cities, such as Newport, are likely to find it much harder to do this than others, such as Milton Keynes.

Over the last year, the regional workforce job statistics show that Yorkshire and the Humber, North West, North East and the West and East Midlands regions have lost a total of over 175,000 public sector jobs, with an additional 40,000 job losses in the East of England. Meanwhile London, the South East and the devolved administrations of Scotland and Wales have seen the number of public sector jobs rise.

Source: NOMIS, Workforce Job Statistics, 2011

ONS data shows that the private sector has created 41,000 jobs over this quarter – this is an economy-wide reduction of 70,000 jobs in three months.  Centre for Cities argues that this shows that currently, the private sector is struggling to create jobs at the rate required to offset the private sector jobs lost during the recession and to cover shrinkage in the public sector.  The table above shows that some regions – the West Midlands, Wales and the South West and Scotland in particular – are continuing to see falls in private sector jobs.  

But as research shows, the impact of public sector job cuts is not being felt evenly across UK cities.  In January this year, Centre for Cities warned of the impact of public sector job cuts on those cities heavily reliant on the public sector, such as Plymouth and Liverpool.  In its annual report on the performance of UK cities, Cities Outlook 2011, the Centre warned that places with weaker private sector economies, where public sector jobs make up more than 30% of local jobs provision, will be particularly vulnerable as the cuts start to fall.* 

Chief Executive of Centre for Cities, Joanna Averley said:

“In those places that are highly reliant on the public sector, the impact of the cuts will be felt hardest.  This is now playing out in North and East of the country, where the economies of their cities are more public sector dependent. 

“Cities that are more affected should focus on re-training and re-employment initiatives which support people back to work in the private sector.  In the long term, these cities will need a realistic action plan which builds the conditions needed for private sector investment.”

ENDS.

For more information, please contact:

Rachel Tooby, External Affairs Manager, Centre for Cities
020 7803 4316 / 07748 183 026 r.tooby@centreforcities.org

Notes to Editors

*Cities with projected highest public sector job losses (data taken from Cities Outlook 2011)

This report examines how transport can improve access to work in four case study areas: the wider Milton Keynes area; South Hampshire; Greater Manchester and the Sheffield City Region.  The report recommends that as the role transport plays and the appropriateness of specific interventions varies in different places, making devolution of transport powers and budgets is ever more important.    

Download the full report

Download the annex

This report is part of our research strand on city collaboration, and is supported by Network Rail.

A welcome address from:

Cllr Paul Tilsley, Deputy Leader, Birmingham City Council

Guest speaker:

Rt Hon Vince Cable MP, Secretary of State for Business, Innovation & Skills

19:30-21:00, Saturday 17 September

Birmingham Museum & Art Gallery

RSVP only: Rita Beden rsvp@centreforcities.org / 020 7803 4300

Supported by KPMG.

The planning system has a pretty poor reputation with regards to supporting economic growth; communities secretary Eric Pickles recently described it as a "drag anchor on growth". The figures on the number of major planning decisions that councils manage to come to within the government's recommended 13 week deadline does make welcome reading. In 2008, almost half of urban local authorities failed to decide at least 30% of their major planning applications within the suggested timeframe.

Read the full article on The Guardian's Local Government Network Blog

There was a surprise increase in the unemployment rate in the three months to June.  Compared to the three months to March, the unemployment rate increased by 0.2 percentage points. Other labour market indicators have also seen a deterioration.  Redundancies increased by 32,000 over the quarter.  And the claimant count continued its recent upward trend in July, rising by 0.1 percentage points to 4.9 percent.

A further 37,100 people claimed Jobseeker’s Allowance over the month, and the claimant count is now 0.3 percentage points higher than a year earlier.  But using this data as further evidence of a slowdown in the UK’s economic recovery must be done with caution.  Despite increases in unemployment, the number of people in employment increased in the three months to June too.  And as page 2 shows, employer demand for workers may actually be increasing despite the headline increase in unemployment.

"The announcement today of the eleven new Enterprise Zones shows that the Government has taken on board some of the lessons of the 1980s Enterprise Zone experiment. Many of the new zones are located in areas with real economic potential, increasing their chance of success. Prior to the Coalition’s announcement to reintroduce Enterprise Zones, Centre for Cities released research showing previous zones were expensive and delivered only a small number of additional jobs.

Linking Enterprise Zones with Local Enterprise Partnerships has also been a positive step. It has provided these groups of local authorities and businesses with a reason to work together and develop a shared understanding. However, Enterprise Zones are only one part of the solution needed for boosting local job creation. To support private sector jobs growth, Government needs to work with local authorities to enable them to improve their wider business environment. This means getting the basics right, such as improving skills levels, tackling congestion and ensuring that the planning system supports growth."

For further information or interview requests please contact Rachel Tooby, External Affairs Manager 020 7803 4316 / 07748 183 026 / r.tooby@centreforcities.org or Amanda Ciske, External Affairs Assistant on 020 7803 4315 / a.ciske@centreforcities.org.

Guest speakers:

Bob Neill MP, Communities and Local Government Minister

Mike Blackburn, Chair of the Greater Manchester LEP

Sir Richard Leese (Leader, Manchester City Council)

and Martyn Hulme (Managing Director, Co-operative Estates)

19:30-21:00, Sunday 2 October

Manchester Art Gallery

Supported by The Co-operative Group.

The technical content will no doubt turn many off, but the reforms are tremendously important. They offer the opportunity to introduce real financial incentives for growth into the system of local government finance. In the week prior to the announcement, the Centre for Cities launched its own review of the options in a report entitled, Room for Improvement. 

Read the full article on eGov monitor.

The technical content will no doubt turn many off, but the reforms are tremendously important. They offer the opportunity to introduce real financial incentives for growth into the system of local governmentfinance.  In the week prior to the announcement, the Centre for Cities launched its own review of theoptions in a report entitled Room for Improvement.

In this briefing we outline the main points of the consultation document, and the implications for cities.

DCLG has published the draft National Planning Policy Framework for consultation, after much anticipation and some delay. The consultation closes on 17 October, and includes four “planning reform workshops” in early September in London, Leeds, Birmingham and Bristol. As this is the third draft (following the practitioners’ draft published in the Spring, and the draft framework leaked in June) there is a feeling this is more of a policy statement than a consultation, and that major changes are unlikely before the final version comes into force in 2012.

The NPPF is the centrepiece of reforms that aim to streamline the planning system, and introduce a “presumption in favour of sustainable development” for applications as long as they have "no over-riding conflict with the NPPF as a whole". These will be much-reduced, with a single 50-page document replacing 25 Planning Policy Statements and Guidance notes, and 15 Minerals Planning Statements.

While the review is short on detail it confirms that the system will shift from one solely based on complicated needs assessment to one where areas also have a real incentive to say ‘yes’ to development. This move could have important implications for the national economy. That’s why the Centre for Cities report Room for Improvement urged the Government to be bold with the LGRR and deliver a shake up of the existing system of local government finance.

Read the full article in LocalGov.co.uk

City Money: financing growth and delivering new infrastructure

The Local Government Resource Review is introducing significant changes to the system of local government finance, with areas facing new financial incentives to encourage and go for growth.  Equally, many of the country’s cities are in desperate need of additional investment, but the public money available for new roads, regeneration projects and other types of investment is limited.  It’s clear that we have moved from a model of regeneration based on grants and subsidies to one where new ways to finance infrastructure are required, with innovative models such as tax increment financing being implemented.

This Cities Network event will discuss how the new financial incentives for growth will impact on cities in England, what is being done to meet the infrastructure challenges that cities face and whether the current policy stance is meeting the needs of different places effectively.  It will discuss how the findings of the Local Government Resource Review will impact on cities, the options that exist for implementing tax increment financing and the role of the private sector in financing infrastructure improvements.

Speakers include Tom Riordan (Chief Executive, Leeds City Council), Simon Ridley (Director of Local Government Finance, Department for Communities and Local Government), Chris Murray (Director, Core Cities Group) and Graham Botham (Programme Director, Network Rail).

This event is now full.  Please contact Niamh Sands (n.sands@centreforcities.org / 020 7803 4309) if you would like to be added to the reserve list.

About Cities Network

This year, the Centre for Cities will be marshalling our network of partner cities into a formal programme of events and workshops. We will be bringing together city leaders, business organisations, employers and Whitehall throughout the year, to generate practical ideas about how cities can rise to the challenges of cutting budgets while growing private sector jobs.  IBM, who has been a valued partner of the Centre throughout 2010, is a key sponsor for this work.

Our work with cities such as Birmingham, Liverpool, Derby and Sheffield via our Partner City programme has exposed the huge appetite for dialogue and generation of policy ideas between cities, Whitehall and business.

The network will convene four times during 2011, in different cities around the UK. 

For further information on the Cities Network, please contact Kieran Larkin.

Supported by:

Our report, Moving up, moving out?: Overcoming the jobs – skills mismatch, (the first of two papers), found that over the last decade the geography and nature of jobs has been changing. Lower skilled jobs are slowly moving out of city centres. The report shows that over 60 percent of all English city centres saw a fall in regional share of lower skilled jobs. There are several factors that have influenced this geographical shift including the rising costs of city locations and the increasing benefits for knowledge-based professional services of being based in central locations. 

In addition this trend has been complimented by the increasing attractiveness for some businesses such warehousing and distribution, retail, and call centres of the lower costs of land and links to transport networks outside city centres.

Read the full article in eGov monitor

“We welcome the Minister’s commitment to enabling cities to retain a portion of the growth in future business rates.  The government needs to be bold with the next steps of this policy shake up.  Centre for Cities’ recent research shows that in order for this incentive to be effective, cities should be allowed to retain between 40% and 60% of future business rates growth.  This would present the strongest opportunity in many years to incentivise cities to grow their business base by giving them a real reason to say ‘yes’ to the development needed for economic growth.”

For further information or interview requests, please contact Rachel Tooby, External Affairs Manager at Centre for Cities on 0207 803 4316 / 07748 183 026 / r.tooby@centreforcities.org

Cities are the powerhouses of the UK economy.  52 percent of UK businesses are located in cities and 60 percent of the UK’s GVA is generated in them.  The introduction of this appointment presents a real opportunity for government to step up engagement with the cities, businesses and Local Enterprise Partnerships to drive economic growth. 

Centre for Cities research shows that there are some clear immediate priorities which the Minister for Cities could consider:   

He should:

• Work to secure a good deal for cities in this spending review. Cities need a Minister to champion their needs in Whitehall.  The Minister should aim to secure a better deal for cities reflecting the vital link between their prosperity and the strength of the national economy.  He should be proactive in advocating the needs of cities and how their performance is important to all parts of England.

  
  

• Listen to voice of business, with cities and local enterprise partnerships working together.  The Minister should work to make Local Enterprise Partnerships (LEPs) effective strategic bodies and address the powers and funding that can be devolved to them. 

  
  

• Help struggling cities to deal with decline. Many cities struggled to achieve economic prosperity and development through the best times and will find it difficult to create jobs and economic growth now.  The Minister needs to understand the economic and political issues for struggling cities and review what is the best approach to deal with urban decline.

  
  

• Ultimately include all cities in discussions.  Although the conversation may start with the eight core cities, it is important that discussions with all cities, with their unique histories, geography and opportunities, take place to inform policy making.

For further information or interview requests, please contact Rachel Tooby, External Affairs Manager at Centre for Cities on 0207 803 4316 / 07748 183 026 / r.tooby@centreforcities.org

We hope the event will bring together a group of key stakeholders including policy makers, local authorities, developers and urban and planning experts to discuss how a land auctions model would work on the ground, the key differences between using auctions on private and public sector land, and what refinements the policy may need before it enters a piloting phase. 

Beyond land auctions, we also hope to use the event to reflect upon other innovative approaches the Government could consider to bring forward more land for development and stimulate local economies. The session will open with comments from senior Government officials and industry representatives.

Download an overview of the discussion.

The number of people working part time because they could not get a full time job has increased considerably since the onset of the recession, and now stands at a record high of 1.25 million people.  This, coupled with an increase in the number of temporary workers, is likely to soak up any future jobs growth without a corresponding fall in unemployment.  

As the country emerges from recession, making the most of the potential of our cities is essential. They will be key to replacing the 880,000 jobs lost during the downturn and minimising the impact of forthcoming public sector job losses.

This is why the Centre for Cities thinks the current debate around the introduction of directly- elected mayors in 11 English local authorities, including Leeds, Bradford, Sheffield and Wakefield, is so important.

Our latest research shows that directly-elected mayors have the potential to strengthen local governance. And this puts them in a good position to support local economic growth – but they can only realise this potential if they have the right powers.

Read the full article in the Yorkshire Post

Research by the Centre for Cities has highlighted the folly this has created: out of the 56 cities in England that we research, 39 have stated that they have a creative industries sector worth supporting or developing; 33 identify advanced manufacturing as a key or future strength; and 26 cities claim to be leaders in the green industries sector. Yet by their very definition, these cluster industries cannot occur everywhere. And even in places that do have some degree of strength in these sectors, they make up only a small part of overall private sector employment. In Cambridge, for example, the life sciences make up around 6 percent.

Read the full article on The Guardian's local government network blog

The report, Room for Improvement: Creating the financial incentives needed for economic growth, argues that a bold change to current policy is needed and recommends that cities should be allowed to retain between 40% and 60% of future business rates, indefinitely.  This would create a strong, simple, long-term incentive for cities to support development and economic growth.

The report, which is supported by SNR Denton and CB Richard Ellis, urges the government to use the Local Government Resources Review to radically change how business rates are currently allocated.   

The Government has introduced two new policies to rebalance local decision making in favour of development. The New Homes Bonus offers local authorities a payment for each additional house built, and the Local Government Resources will allow for the retention of business rates. The report shows that the reforms could fundamentally alter the way that local government in England is financed, incentivising local authorities to be far more pro-growth and pro-development.

55 English cities increased their business rate during the period 1999 to 2010, suggesting that a financial incentive for growth could work positively for almost all cities.  The table below shows which cities have seen the highest proportion of growth in their business rates since 1999. 



(Using the GDP deflator (2009-10 prices))

Joanna Averley, Chief Executive of Centre for Cities said:

"The government must not miss this opportunity to be radical in revising the business rates system, and we welcome the political backing given to this process by Nick Clegg last month. Reviewing this system will not only reward councils for being pro-growth, but it will also make a real difference to the people they represent; because the money raised from the business rate could be ploughed straight back in to the community, into things like roads and schools."

"In this challenging economic climate, it is more important than ever to encourage buoyant cities to grow.  Because the current tax system offers no direct financial incentive for cities to develop their business base, it does not encourage them to achieve their full potential."

Sarah Whitney, Managing Director, Government & Infrastructure, CB Richard Ellis, said:

"Allowing local authorities to retain a sizeable proportion of their future incremental business rates, could be a very real incentive to developers and local businesses.  Whilst unlikely to be popular with all local authorities, we are in tough times, and tough times require Government to make tough decisions."

"In our view, the local retention of rates could foster a dynamic partnership between developers and local authorities, which could facilitate the smooth delivery of projects that will bolster economic growth. There is no doubt that a number of stalled projects, that could have created additional jobs and economic growth, would have been brought forward if a greater proportion of business rates had been retained locally to fund the necessary infrastructure. We await the outcome of the Local Government Resource Review for clarity, but the implementation of local business rates retention is critical."

Stephen Webb, a Partner at SNR Denton said:

"As the Coalition Government begins to acknowledge that the Localism agenda must be balanced by a credible agenda for growth, the financial incentives to stimulate development have come under closer scrutiny.  This report concludes that while the Government's proposed incentives are a step in the right direction, more needs to be done to stimulate development to ensure that our towns and cities are able to compete nationally and internationally.  Financial incentives such as business rate retention and the New Homes Bonus therefore need to be enhanced and the benefits distributed to the relevant authorities to properly encourage much needed development".

For further information or to request an interview please contact Rachel Tooby, External Affairs Manager at Centre for Cities on 020 7803 4316 / r.tooby@centreforcities.org

Notes to editors

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

The Centre for Cities is grateful for the support of CB Richard Ellis and SNR Denton for this independent report.  Except where otherwise indicated, all views expressed are those of the Centre for Cities and do not necessarily reflect those of CB Richard Ellis or SNR Denton.

* The table shows growth in business rates which derive from increases in the ratable value of existing property and any additional development

In a complex world, no policy will be a catch-all for the challenge of increasing the supply of residential and commercial property. Yet, with the right design, the NHB and LGRR can create financial incentives for growth that benefit both the residential and business communities of Britain’s cities, and the UK economy as a whole.

Key policy conclusions and recommendations

Local Government Resource Review – retaining business rates

• Our analysis suggests that local retention of business rates could create a strong incentive for growth. This can be illustrated by the decline in the growth rate of commercial space, and increase in business occupancy costs, following the nationalisation of business rates in 1990.

• The Government must be bold with its proposals. In the longer term, the shift to an incentive-based system will create both relative winners and losers. Yet the majority of cities should still see growth in their local business tax base - 55 out of the 56 English cities saw their business rate tax bases grow between 1999 and 2010. We think the potential economic benefits for the country justify this trade-off between redistribution and national economic growth.

• To be effective the incentive for growth needs to be well designed. It needs to be large; strong at the margin; contain no thresholds; incentivise the right behaviour; target the decision maker; be simple and transparent; and long term.

• All local authorities should be allowed to retain a fixed proportion of the growth (40-60 percent) in their business rates, indefinitely. This would create a strong, simple, long-term incentive to support development and economic growth.

• To ensure growth enabling infrastructure can be financed, a mechanism needs to be created to enable long-term pooling of some of the business rate revenues at the Local Enterprise Partnership (LEP) or city regional level. Government should create an additional bonus for business rate growth committed to the LEP level for infrastructure investment.

New Homes Bonus

• The Government’s approach to incentivising additional housing delivery with the NHB is welcomed. However, as it is currently configured, the NHB looks to be too small to sufficiently increase the housing supply. The Government’s own calculations estimate that the NHB will increase supply by just 8 to 13 percent. Our analysis suggest that it will be too weak an incentive to increase house building in the areas and cities of the country where there is the highest demand.

• To improve its effectiveness, the NHB needs to be increased in size – preferably tripled. It should also be targeted at those residents most affected by new housing development.

• The New Homes Bonus needs to be placed on a permanent legal footing. To make the New Homes Bonus work properly, the amendment to the Localism Bill that allows financial considerations to be material in planning decisions should be preserved.

Download the full report

Download the appendix

Download a city-by-city breakdown of NNDR growth

Selected coverage • The Yorkshire Post • eGovmonitor • Planning • Property Week • Express and Star • Public Finance • LGC

This report is part of our research strand on financial incentives, supported by CB Richard Ellis and SNR Denton.

The geography of jobs is changing. While higher skilled jobs are increasingly concentrating in cities along the main transport corridors and in city centres, low-skilled jobs are dispersing out of city centres.  The nature of jobs is also changing.  The shift towards a knowledge-intensive service based economy has increased employer demand for qualifications and skills, reducing both the number and share of lower skilled, entry-level jobs.  Both of these trends make spatial mobility and qualifications and skills increasingly important at the lower-end of the labour market.

Lower skilled workers’ spatial mobility is more constrained than higher skilled workers’.  Spatial mobility is influenced by a number of factors.  These may be related to individual characteristics, such as work experience or caring responsibilities, and to socio-economic factors, such as the type and number of jobs available and employer recruitment areas.  Tackling any of these barriers in isolation is likely to be insufficient.

These findings have a number of implications for the Work Programme and wider Government policy:

• Welfare to work policy needs to look beyond its core remit and work with partners from across other policy areas, such as transport and planning;
• Welfare to work policy needs to continue to focus on improving the skills and qualifications of the unemployed and it needs to help people access employment opportunities outside their immediate area;
• The success of welfare to work initiatives will depend on the effectiveness of local policy makers in supporting employment growth through the wider drives of economic growth, such as planning and transport.

Download the full report

Download the annex

Selected coverage • Telegraph • LocalGov.co.uk • Guardian • Observer

Research published today by the Centre for Cities shows that jobs for unskilled workers are gradually moving out of our city centres.  The first in a series of three reports, Moving on up, moving on out? Overcoming the jobs-skills mismatch, (produced with the support of Network Rail) shows that city centre jobs are increasingly made up of those for highly qualified workers, such as accountancy, law and finance; while jobs for low skilled workers, such as those in telecommunications and transport are locating out of inner city locations.  

In parallel to this, the latest data shows that there are about 2.6million more people without qualifications than there are total jobs at this level.  This scenario presents real challenges to Work Programme providers as they start to match people to jobs.

According to the research institute, over the past 20 years, over 60% of all English city centres saw a fall in their regional share of low skilled jobs.  As city centre locations become more costly, some employers are increasingly seeing the benefits of locating out of town to take advantage of the space available at a lower cost, with access to major road networks. 

The report also shows that worklessness continues to be highly concentrated in inner cities, so unemployed people living in urban areas may find it more challenging to access opportunities at the edge of cities as low skilled jobs disperse, particularly as only 52% of the lowest income households own a car.  The Centre for Cities is urging the Government and Work Programme providers to take note of these changes to ensure that strategies are developed that will support people to become more mobile so that they are more able to access work.  

 Joanna Averley, Interim Chief Executive of Centre for Cities explains:

 “Centre for Cities’ research shows that the make up of the jobs market in our cities is evolving, and this has significant implications for the Work Programme.  There are about 2.6million more people without qualifications than there are jobs available at that level.  And as more businesses which employ low skilled workers gradually move out of city centres, it may be more challenging for less qualified people looking for work and living in city centre locations to commute or relocate for jobs. 

“This long-term trend could have a real impact on people’s ability to access job opportunities at this level.  The Government needs to ensure that the Work Programme, launched a month ago, is supported by wider strategies across, transport, planning and housing, as well as skills, to anticipate further changes in the geography of low skilled jobs.”

For further information, interview requests, or for an advanced embargoed copy of the report, please contact Rachel Tooby, External Affairs Manager at Centre for Cities on 0207 803 4216 / 07748 183 026 / r.tooby@centreforcities.org

Notes to editors

* Regional share is the number of low skilled jobs by local authority district divided by total regional low-skill jobs

To respond to some of these questions, Centre for Cities and the Institute for Government have published a joint study reviewing the potential for mayors to support growth in our cities.

Our report, ‘Big Shot or Long Shot? How elected mayors can help drive economic growth in England's cities’ concludes that mayors have potential to bring about positive outcomes for city economies – but to realize this potential the Government needs to go further to devolve greater powers to mayors on transport, planning and skills, giving mayors not just space to lead their city but also the formal tools to address local economic needs.

Mayors offer an opportunity because, while the existing system clearly works well in some cities – Manchester being a notable example - from an economic perspective the current system of local government contains governance challenges that make it more difficult for cities to support economic growth. Mayors offer a way of overcoming these challenges and supporting cities to realize their economic potential.

For example, a mayor’s direct election, strong executive position and greater security of tenure mean that he or she can be elected on a mandate to take challenging decisions of strategic importance which are of wider benefit to a city economy.

In London this has enabled, for example, the mayor to introduce the city congestion charge and to introduce a Supplementary Business Rate that helped to pay for much needed infrastructure in the form of Crossrail.

Read the full article in LocalGov.co.uk

The review – which may or may not be published – should make interesting reading. This is not least because it is likely to highlight Whitehall’s brilliance in hanging on to power, even when – at least some – ministers are pushing strongly towards decentralisation.

Place-based budgets are an example of the challenges of delivering decentralisation. The principle is that pots of money for a range of services – from early years to welfare – are pooled at local level, rather than being doled out by siloed government departments, each with their own separate agenda.

Various studies over the last few years have shown that this approach has the potential to generate more effective and efficient services which join up around individual needs, rather than departmental priorities.

Read the full article in LocalGov.co.uk

Private sector-driven growth is crucial for a sustainable economic recovery.  Yet, a year on from Vince Cable and Eric Pickles’ letter inviting the formation of local enterprise partnerships, many questions still remain as to what their strategic priorities will be, how they will be funded and the extent to which private sector involvement will be genuine.

These events will provide a valuable opportunity to discuss views on the progress of local enterprise partnerships to date and their impact across cities.  We hope to bring together stakeholders from across different regions to share their experiences of partnership working and debate what more needs to be done to ensure that local enterprise partnerships are the transformative body they have the potential to be. 

The first event will be in Leeds on 7 July, 10-12noon at the Rose Bowl, and Clive Betts MP, Chair of the CLG Select Committe, will be our guest speaker.

Contact Niamh Sands if you would like to attend.

Supported by Bircham Dyson Bell:

There is a great deal of excitement about the fall in unemployment - 88,000 people in the three months to April – in the press on the back of June’s labour market statistics. This fall was mainly accounted for by a fall in the unemployment of those aged 16-24, a welcome relief to recent rises in youth unemployment.

It’s not all good news however; out of a fall of 79,000 for this age group, 61,000 moved not into employment but into study.  An increase in the number of unemployed people becoming students flatters the unemployment figures in the short term.

But these people will look to re-enter the labour market at some point.  And coupled with the1.21 million people currently working part time because they could not get a full time job, unemployment is likely to remain fairly anchored as future job creation is soaked up either by students on the look out for jobs once more or by part time workers.

Previous Centre for Cities research has found that growth across these cities is highly uneven – places such as Leeds and Manchester have performed much more strongly since 1998 than places such as Bradford and Birmingham. Policy needs to respond flexibly to this uneven growth to enable cities to address the specific and varied challenges that they face.

Local economic policy making has the potential to work better with a mayoral model of governance. A mayor could use both the formal and informal powers attached to the mayoral model to overcome four key governance challenges to economic policymaking; a mayor has the potential to help city governments be decisive on issues of strategic economic importance, to act as a representative to local business and central government, bring coherence to the actions of the public sector and collaborate with local authorities, business and other players in the wider local economy.

However, the model as currently proposed could go further. The economies of England’s largest cities would benefit from a governance structure that takes the best from the Mayor of London model. They need greater powers over issues such as transport and strategic planning. And they need a remit that effectively covers the whole economy of a city. Economic policy should be matched to the geography of the economy if it is to be most effective.

Download the full report.

Selected coverage • Guardian • MSN • Public Finance • Planning • LGC • Bradford Telegraph & Argus

The report Big Shot or Long Shot? How elected mayors can help drive economic growth in England's cities shows that mayors have potential to make a strong impact on the challenges that affect the growth of our cities.  But the report argues that Mayors need greater powers to make the more controversial yet important decisions about planning and transport to give them best chance of delivering the strategies that can support growth. These include:

• Strategic oversight of the council’s core strategy (the Local Development Framework) to ensure that it looks beyond administrative boundaries – this could be similar to the London Plan.
• Taking decisions about strategic planning applications which support economic growth, such as major infrastructure projects or major housing sites.
• Chairing the Integrated Transport Authority – we know that successful transport policy can enable economic growth.  The Mayor should play a key role in developing this.
• Co-chairing the Local Enterprise Partnership. This would help give Mayors a strong presence amongst the local business community.  It would enable the Mayor to communicate to central government the needs of the area.

The report also calls on government to give cities the option to decide which mayoral model is right for their local economy.  The report states that some cities would benefit from a ‘metro mayor’, who would govern a wider geographic area to cover the level of the natural economic boundary.  These metro mayors would be most affective with additional powers that take from the most successful aspects of the London Mayoral model - strategic powers over transport, planning and skills, to drive a strategy for growth.   

Alexandra Jones, Chief Executive of Centre for Cities said,

"Mayors have the potential to improve how cities are governed but to realize their full promise they need additional powers and influence to those currently proposed. Centre for Cities research shows that skills, transport and planning remain the most significant and urgent barriers to growth; mayors will need to be able to tackle these through formal and informal powers. 

Citizens in every city and city region should be able to make their own decisions about the right governance for their place and their economy. So we are also urging the government to amend legislation to give cities the option to have either a local authority or metro mayor. Where there is political appetite for metro mayors, they would operate across functioning economic areas and so have the most potential to support business growth and job creation. All these models can and should evolve over time."

Andrew Adonis, Director of the Institute for Government said,

“Central government has a real opportunity in the localism bill to demonstrate its commitment to strong city leadership and to encourage growth by divesting the powers to drive it. Evidence from the UK and abroad shows that elected mayors can have a transformative effect on city economies. But if they are going to succeed, government first has to give them the powers to make a difference. The London experience has shown that mayors can deliver change for-the-good but only where they can make city-wide strategic decisions that transcend local in-fighting and nimbyism”.

The report Big Shot or Long Shot: How elected mayors can help drive economic growth in England's cities will be launched in Birmingham at KPMG’s offices in Birmingham at 10am on Tuesday 14 June.  Spaces at the event are limited.

For interview requests, please contact:

Rachel Tooby at Centre for Cities: 0207 803 4316 / 07748 183 026 / r.tooby@centreforcities.org

Emma Thwaites at Institute for Government: 0207 747 0433 / 07990 804805 / emma.thwaites@instituteforgovernment.org.uk

About Centre for Cities

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

About Institute for Government

The Institute for Government is an independent charity with cross-party and Whitehall governance working to increase government effectiveness. Our funding comes from the Gatsby Charitable Foundation, one of the Sainsbury Family Charitable Trusts.

We work with all the main political parties at Westminster and with senior civil servants in Whitehall, providing evidence based advice that draws on best practice from around the world.

We undertake research, provide the highest quality development opportunities for senior decision makers and organise events to invigorate and provide fresh thinking on the issues that really matter to government

For the latest news, research and information about events at the Institute for Government, www.instituteforgovernment.org.uk

See photos from the event at http://www.flickr.com/photos/52038120@N03/

Speakers:

Lord Adonis (Director, Institute for Government)

Jerry Blackett (Chief Executive, Birmingham Chamber of Commerce)

Jim Hancock (Former BBC NW Political Editor)

John Atkinson (Director - Infrastructure, Government & Healthcare, KPMG LLP)

& Alexandra Jones (Chief Executive, Centre for Cities)

With 11 of England's great cities - including Birmingham - due to hold mayoral referendums in May 2012, the Centre for Cities and the Institute for Government have been looking into the potential of elected mayors to drive economic growth in their cities.

• Why are mayors well placed to address the challenges of urban economic growth?  
• What other powers and freedoms are needed to help elected mayors in England overcome barriers to growth?
• What would the impact of a mayoral model of city leadership in a city like Birmingham be?

On 14 June, the Centre for Cities and the Institute for Government will be in Birmingham to launch a joint report on the relationship between elected mayors and their city economies.

This event is invitation-only.  If you are interested in finding out more, please contact Rita Beden 020 7803 4303.

There has been a great deal of coverage in the press in the last couple of weeks about the impact of the Coalition on its first year anniversary. Today’s data release doesn’t quite give us data for the entire twelve months. But there are three interesting things to note for Government policy – issues which mark a departure from the behaviour of the labour market during the recovery from the last recession in the 1990s:

1. There has been a large change to the composition of full time and part time working since the recession, with a large jump in part-time working. This means that policy should both be mindful that there will be some correction to this (as people move from part-time back to full-time work) but also tailor policy to be more aware of the rise in part time working.

2. Partly as a result of this the labour market has not responded in the way that many people expected. Whereas it could have been feasible that the Government would have had to battle against rising unemployment, the unemployment rate has been very stable over the last 12 months. This means it will be even more difficult to predict both the labour market and the impact of policy over the coming years.

3.The size of the youth unemployment problem is difficult to measure. 935,000 young people are unemployed, but around one third of these are full time students. This means that policies to reduce youth unemployment need to account for both low skilled young people and those that have recently qualified but are struggling to find employment. Each scenario is likely to require a different policy approach.

For further data see our City data section. 

The headline statistics bring positive news for the labour market this month, reversing some of the slight deterioration that has occurred since the turn of the year.  Encouragingly, the employment rate increased by 0.2 percentage points over the three months to February.

The majority of this increase was driven by full time jobs. This is good news given that the early recovery of improvements in employment rates was being driven by increases in part time jobs (because of weak labour demand).

The increasing role that full time job creation is playing suggests that demand of labour is becoming ever stronger. Page 2 looks in more detail at patterns of labour demand. This rise in employment has had a positive impact on unemployment, which fell by 0.2 percentage points compared to last month. But the woes for women in the labour market continue. While male unemployment fell, female unemployment increased in the three months to February.

For further data see our City data section. 

Phase two on the other hand (from February 2010 to February 2011) witnessed a fall in the claimant counts of almost every UK city as the national economy began to recover from the recession. It is interesting to note the impact that these two phases have had on the ranking of cities in terms of their claimant counts.



Key points to note are:

• Hull has been unmoved at the top of this ranking over the three years. Not only did it enter the recession with the highest claimant count rate of all UK cities, it has also been hit hardest by the downturn in terms of the number of people claiming Jobseekers’ Allowance.

• This has not been reflected by Liverpool, the city that had the highest claimant count rate in February 2008. It had a much smaller increase in the number of its claimants over the period, and now has the fifth highest claimant count rate overall.

• Glasgow and Rochdale are the only two cities that were not in the top ten at the start of the downturn but now find themselves there.

• Sunderland, Coventry and Newcastle have had the opposite experience. All three cities had some of the highest claimant count rates out of all UK cities at the beginning of 2008 but have since exited the top ten.

For further data see our City data section. 

Despite the relatively benign nature of the labour market recently, youth unemployment now stands at a record high. The number of 16-24 year olds seeking work has reached 965,000 after increasing by 66,000 in the three months to December. And the youth unemployment rate increased by 1.5 percentage points to 20.5 percent in the three months to December.

Both figures are the highest since comparable records began in 1992.  Research has found that youth unemployment has long lasting impacts on the employment chances of those affected. The Work Programme, the Government’s new approach to welfare to work which is due to be launched in the Summer, will need to pay particular attention to helping young people back into the labour market to prevent the scarring impacts of long term youth unemployment.

For further data see our City data section. 

Today the total stands at 33 approved LEPs, with white spaces still to be filled in East Yorkshire, part of Surrey and Buckinghamshire, Corby and Wellingborough, and a swathe of the West Country covering Gloucestershire, Wiltshire and Dorset.

The Centre for Cities published a 6-Step Plan for Local Enterprise Partnerships in June 2010, setting out the key principles we believed would determine their success.  Our plan focused on helping LEPs get off to the right start, with appropriate powers, governance arrangements and a clearly defined role.

Progress has been mixed, but many LEPs are working hard to put their plans in place.  A year later many of these issues are still unresolved, but time is now far more pressing.  That’s why we’ve published Sink or Swim:  What Next for Local Enterprise Partnerships.  We believe the LEPs have six months to answer some crucial questions and to convince business and the third sector that they will be effective, focused bodies that can get things done.  LEPs rely almost entirely on goodwill, and the longer they delay the lower supplies will fall.

Read the full article in Public Finance

With LEPs becoming increasingly important to the overall success of the Government’s growth policy, now is the right time to assess their progress. We need to know what role they will really play. Can they deal with rising expectations without being overwhelmed? Do they have the powers they need to make a real difference to local economic growth? Will business be convinced enough to get involved? Will LEPs be more than just talking shops and issuers of rubber stamps? Time is short, and if LEPs aren’t demonstrating that they’re making a difference in the next 6 months, they’ll struggle to regain the business confidence that is crucial to making LEPs work.

Download the full report

Selected coverage • Planning • LGC • Estates Gazette • Yorkshire Post

*An additional LEP was announced following the release of this report. See the updated local enterprise partnership map on the Centre for Cities blog.

Private sector investment, skills and jobs growth varies extensively across LEPs, meaning that some will have more hurdles to overcome.  Between 1998 and 2008, the variation in new jobs created in the areas where the LEP boundaries now exist was up to 330,000 jobs.  Empowering LEPs by giving them the right tools to make strategic decisions to drive local economic growth will help LEPs meet the different local challenges they are facing.  Getting this right is vital for the national economy.

Six months on from the formal establishment of LEPs, the report Sink or Swim? What next for Local Enterprise Partnerships? flags what other powers LEPs will need to be successful. The think tank is calling for each LEP to make the promotion of jobs growth its primary objective.  It is calling on the government to give LEPs the informal and formal powers they need to ensure that LEPS are at the heart of local economic decision making, and not just talking shops.

Alexandra Jones, Chief Executive of Centre for Cities says, “LEPs are absolutely central to the government’s growth agenda, and it is critical that they work.  This means LEPs need to be strategic bodies focusing on prioritising and coordinating a plan for economic growth and jobs growth. Our research shows that all LEPs have real potential, but that some face greater challenges than others when it comes to supporting private sector jobs growth.”

Centre for Cities has suggested six levers for LEPs that could be delivered quickly over the next six to twelve months and would give LEPs the ability to build credibility and legitimacy with business and government as bodies that can get things done. These levers are:

The Six Levers for LEPs are:

1) LEPs should ensure businesses are actively involved in the preparation and planning of Enterprise Zone strategies.  Proposals should originate with the business community, rather than businesses being expected to wave through existing local authority proposals.  Business should also take a lead role now in planning for the future use of the proceeds from Enterprise Zones to commission and invest in projects of benefit to the whole local economy.

2) LEPs should prepare joint, strategic spatial plans for their area to identify and prioritise the need across local authority boundaries for employment land, housing and major investments.

3) LEPs should become designated consultees for Local Plans, allowing them to oversee and co-ordinate the development of the planning policies which will be needed to promote growth.

4) LEPs should take a co-ordinating role in developing a LEP-wide transport strategy across local authorities, identifying local investment priorities and managing negotiations to prioritise projects for the benefit of the LEP area. 

5) LEPs should mediate between Work Programme prime contractors and second and third tier sub-contractors to ensure the delivery arrangements put in place across the LEP area support their identified priorities.

6) LEPs should be required to sign off second-round Regional Growth Fund bids, meaning they have the chance to review bids (including those they do not submit) and ensure projects support LEP priorities over and above those of individual councils.

Longer term, LEPs should gain the power to raise funds for infrastructure and, ideally, to pool funding for skills, transport and local employment issues.

Alexandra Jones explains: “We believe that LEPs need a mix of formal and informal powers to give them enough muscle to drive growth.  It is good that LEPs will have responsibility for Enterprise Zones, but they will need more clout if they are to deliver real change.  In the short term we urge the government to consider our package of options as a priority; LEPs must demonstrate success over the next six months to remain a credible vehicle for local growth. In the longer term LEPs will need more powers to pool funding and invest in the local economy to deliver growth for the UK as a whole.”

For further information or to arrange an interview please contact Rachel Tooby on 020 7803 4316 / 07748 183 026 / r.tooby@centreforcities.org or Amanda Ciske on 020 7803 4316 / a.ciske@centreforcities.org

On the day that young people across the country will decide which university to attend, Centre for Cities has published research which shows the importance of student spend for city economies.  As students become more selective about where they study, or decide not to go into higher education at all because of the cost, the report, ‘Starter for Ten’ looks at the impact that university students have on urban economies.  The research shows that undergraduate spend accounts for far more in some cities than in others.

Centre for Cities says it hopes the report will help university towns and cities plan for how they will manage the likely impact on business of fewer students spending money in the local economy. 

The ten cities which have the highest proportion of undergraduate spend compared to total output are:

“Universities, and the cities they are based in, face some challenging times ahead” says Paul Swinney, Analyst at the Centre for Cities; “We understand that in this age of austerity, universities have had to revise their fee structures, but it is important that cities understand what implications the new university fees have for their economies.”

“It is likely that places like Oxford and Cambridge will fare better than others – demand for places is unlikely to slip, so the large contribution that students make to the economies of these cities through their spending habits is unlikely to change significantly.  But other universities are likely to find it more difficult to attract students.  And this is likely to have a negative impact not just on the university itself but on the wider city economy.”

Ends.

For further information or to request an interview, please contact Rachel Tooby, External Relations Manager, on 020 7803 4316 / r.tooby@centreforcities.org

Notes to editors:

The Centre for Cities is an independent, non-partisan research and policy institute. Committed to helping Britain's cities improve their economic performance, the Centre produces practical research and policy advice for city leaders, Whitehall and employers.

Much is made about the role of universities in city economies. But little is actually known about their impact. Using data from the Higher Education Statistics Authority (HESA) and the Higher Education Funding Council for England (HEFCE), this short note looks at five facts about universities and economic development and raises five questions for potential further research.  It shows that by far the biggest economic impact that a university has on its city economy is through its local employment and the spending of its students rather than the interaction that it has with the local business base.

This raises questions about the impact that the fee increases might have if it reduces the number of students at universities.  And it raises questions about how universities and cities might work together for mutual economic benefit in the future.  These are questions that we will seek to answer through further work over the course of 2011 and 2012.

Download the full report

Selected coverage • BBC News • Guardian • Yorkshire Post • Plymouth Herald • Birmingham Post • Planning

Will LEPs have the powers and resources to deliver on these priorities?
Capacity and skills will be different in each area of the country. In some areas such as Greater Manchester and the Tees Valley, they have worked in partnership for 10 or 15 years. That won't make decisions any less difficult, but it does mean they are used to working together to achieve an outcome. They have an existing evidence base that can help to inform their decisions.

In other places, where these partnerships are new, it might take longer. It will take time for the LEPs to work out their priorities and agree on a strategy. This will be one of the big challenges for LEPs.

One of the key issues for LEPs is that there won't be money for day-to-day running costs, and they are responding to this in different ways. Some partnerships will get money from local authorities or financial help from businesses. However, the uncertainty means that some people with considerable knowledge are moving on to different jobs, and that may create challenges further down the line.

Read the full interview on The PPP Journal

Now spring has finally sprung, it's not just daffodils that are flowering. New life has also been breathed into local enterprise partnerships (LEPs), with the Budget signifying that the partnerships are going to be important for future economic development in cities.

This is not to suggest that there were no effective LEPs already. Across England, partnerships have been working hard to set up private sector-led boards at the level of the real economy: the area within which people travel to work or for leisure. But progress has been mixed. Areas with long established partnerships, such as Tees Valley, Manchester and Leeds, have advantages over areas where cross-boundary working is new.

There are also places where the opportunity to have a dialogue with the Government - originally the only formal benefit for LEPs - has not been sufficient to overcome local differences and agree a partnership.

But now the Government has signalled that LEPs are a flagship part of its enterprise zones policy. The Budget revealed that only these bodies can bid to have an enterprise zone, meaning that only they can access the offer of up to £275,000 in business rate rebates over five years and only they can retain business rates from the zones over the next 25 years, with rates pooled across the LEP area.

Read the full article in Planning

This year, the Centre for Cities will be marshalling our network of partner cities into a formal programme of events and workshops. We will be bringing together city leaders, business organisations, employers and Whitehall throughout the year, to generate practical ideas about how cities can rise to the challenges of cutting budgets while growing private sector jobs.  IBM, who has been a valued partner of the Centre throughout 2010, is a key sponsor for this work.

Our work with cities such as Birmingham, Liverpool, Derby and Sheffield via our Partner City programme has exposed the huge appetite for dialogue and generation of policy ideas between cities, Whitehall and business.

The network will convene four times during 2011, in different cities around the UK.  The first Cities Network session was held in Manchester at the end of March and the focus was on employment and the Work Programme.

A second session is scheduled for 7 June in Warwick and the focus of the session will be business growth, enterprise and localism.  Key speakers will include Philippa Lloyd, Director of Economic Development, BIS, Adam Marshall, Director of Policy and External Affairs, British Chambers of Commerce, and Mark Barrow, Strategic Director of Development, Birmingham City Council.  

***Change of venue: This event will now take place at the Holiday Inn, Leamington Spa-Warwick, Olympus Ave, Tachbrook Park, Leamington Spa, CV34 6RJ***

For further information on the Cities Network, please contact Niamh Sands.

Supported by:

But if the fund is to deliver value for money, the key challenge for Government will be ensuring that these jobs really are additional and sustainable, especially as the money is going directly to firms. Due diligence will be important and contracts will need to be rigorously drawn up and enforced, particularly the planned penalties for winners if jobs do not last for 5-10 years.

Some projects may also have relatively limited impact locally if cities do not seek to make the most of the money by working with winning bidders to maximize potential spillovers, for example through firms mentoring other SMEs. 

In Round 2, we would want to see a stronger focus on tackling medium to long term barriers to growth, moving beyond investment in firms and immediate jobs to funding the infrastructure that we know will unlock wider business growth and investment.

It will also be important to consider how else Government can support the cities most vulnerable to the forthcoming public sector recession. However successful the RGF projects, the fund is relatively small and more will need to be done to help the places experiencing industrial change as well as being public sector dependent.

Notes to editors

For more information, please contact:

Rachel Tooby, External Affairs Manager

r.tooby@centreforcities.org / 020 7803 4316

Yet in a climate of fiscal austerity, it is a challenge for the government to target its policies and resources in a way that maximizes the UK’s potential for growth. This note sets out the evidence demonstrating why cities are a critical part of the answer to this conundrum. Certain cities are already the driving forces behind regional and national growth. Policies that release the potential of these cities can drive UK prosperity and create more opportunities for UK residents across the country, including for areas with lower economic potential.

But what did the Budget for Growth have to say about cities, the drivers of the UK economy? Many of the national measures will have an impact on city economies and we consider these below. We have then identified three policy areas where announcements were made that have particular relevance to city economies – Enterprise Zones, planning and housing, and skills.

Earlier this month, Centre for Cities published a report on enterprise zones, What would Maggie do? Our research concluded that the zones of the 80s are not the right policy for today because they were too expensive – every job created cost the public purse the equivalent of £26,000 in today’s money over a 10-year period. They delivered relatively few new jobs. Part of the reason was that the past policy relocated many employees working in nearby areas because companies were attracted by the low business rates, but they did not create new jobs at the levels anticipated. Once the incentives were removed, companies left.

The Wakefield experience (for example the Langthwaite Business Park) shows that capital-based incentives triggered short-term private sector investment, but in the longer term, when the incentives stopped, the area suffered decline. In the 12 months to 2005, eight companies left Langthwaite and 400 jobs were lost.

The design of the zones also favoured development over jobs growth. We face a different challenge today as dereliction is less of an issue. We need more jobs and a targeted approach to up-skilling our workforce.

Read the full article in the Yorkshire Post.

Where Enterprise Zones will make a positive difference is in allowing local authorities to borrow to finance important investments for their economy, like new transport infrastructure. This is a useful way of fast-tracking Tax Increment Financing, a policy borrowed from the United States that the government has previously announced and is looking at introducing nationally as part of an ongoing local government finance review.

The Zones will be administered by the new Local Enterprise Partnerships which will finally give these partnerships some teeth. It will also be a real test of the local authorities within LEPs’ ability to work together effectively.  The fly in the ointment here could be competition between LEPs, with businesses simply jumping from one city region to another to benefit from the incentives on offer.

The Zones policy has evolved and developed: it is cheaper, focuses on areas with higher potential for growth and tries to incentivise additional jobs rather than new property development. But only time will tell whether the changes introduced will alter the design of the Zones sufficiently to deliver a more successful policy than that launched in the 1980s.

Notes to editors

For more information, please contact:

Rachel Tooby, External Affairs Manager

r.tooby@centreforcities.org / 020 7803 4316

We highlight three policy areas that should be prioritised:

Transport: Improved transport infrastructure can release economic benefits by helping cities to co-operate and link up. Integrated transport services improve the ability of people to access jobs, supporting growth. 

• To supplement already announced larger transport schemes the Growth Review should focus on smaller-scale investments, which are likely to deliver the best value for money.
• The Government should take a lead in encouraging cities to look at congestion charging.

Skills: Investment in skills is the most significant factor for the long-term success of city economies and the UK economy as a whole, but the UK’s skills base is failing to keep pace and the gap between successful and struggling cities has failed to narrow.

• The Growth Review should tackle levels of achievement in schools in struggling cities to give the children living in these places a better chance of competing in the future.
• The Review should provide incentives to reward universities for linking with business and ensuring graduates have the skills employers need.
• The Government should introduce incentives in Enterprise Zones to encourage firms to provide skills training, for example a 75% tax rebate for training new staff and 50% for existing staff.

Support declining areas: Not all places have the same growth potential; a number have serious, inherited weaknesses. Some cities continue to experience difficulties dealing with deindustrialisation, which has serious long-term implications for their residents. 

• The particular challenges these cities face mean that we encourage the Government to introduce a Transformation Fund, to support cities which need help to adapt their built environment to lower levels of economic activity.

Download the Budget submission letter from the Centre for Cities.

Download the supporting briefing - The growth conundrum: The importance of cities to economic growth in the UK