“We welcome the introduction of 50 percent additional business rates retention for local authorities. This will provide a real incentive for local government and planning authorities to bring forward new development to allow growing businesses to expand and new businesses to come to England.

"Centre for Cities research published last year on the past effect of nationalisation of business rates found evidence to suggest that relocalising rates will provide an incentive of around 1% growth per year. However, this estimate was produced with a stronger and simpler incentive system in mind, meaning the new system may not create the same results. Specifically, resetting the system every 7 years could create a situation where local government benefits by delaying development to the start of the next reset period.  At the next reset in 2020 we encourage the Government to  deliver on their stated aspiration to introduce 10 year resets at the very least. 

"However even with these reforms more needs to be done to boost demand in the UK economy.”

For further information contact Rachel Tooby on 020 7803 4300 / r.tooby@centreforcities.org

Related reports:

• Urban Outliers: Will the Local Government Finance Bill incentivise growth in all England’s cities?
• Capital Gains: What does the Local Government Resource Review mean for London?
• Room for Improvement: Creating the financial incentives needed for economic growth

Unemployment fell for the second consecutive month in the three months to March. It now stands at 8.2 percent, 0.1 percentage points lower than last month and 0.2 percentage points lower than two months ago.

The outlook remains fragile – this improvement is driven by part time working and self employment, while full time employment continues to fall. But the mild improvement continues to suggest that the economy may be growing once more after dipping back into recession.

Despite the improvement, the rate of pay growth continued to fall, meaning that the growth in wages continues to be well below inflation (see Figure 3). This reflects weak productivity growth in the UK economy, which was just 0.2 percent higher in Q4 2011 than a year earlier.

Unemployment continues to fall

 Unemployment has fallen by 0.2 percentage points since the turn of the year, following an increase of 0.7 percentage points between June and December 2011.  This reversal is positive, although the decrease is relatively small given the previous rise.

Wage growth falls sharply

Despite inflation continuing to squeeze living standards, wage growth fell sharply in the 12 months to March 2012 relative to the 12 months to February.  Total pay fell by 0.5 percentage points to 0.6 percent.  This was even more pronounced in the private sector – total pay increased by just 0.3 percent.

Much of the slowdown in wage growth was driven by lower bonus payments.  This was most marked in the financial and business services and construction sectors, where bonuses fell by 16.2 percent and 18.2 percent respectively.

Interestingly the part of the banking sector that is under public ownership did not see similar falls in its bonus payments.  While public sector bonus pay excluding financial services fell by 2.4 percent, total public sector bonus pay increased by 15 percent.

There are increasing concentrations of worklessness in particular neighbourhoods. These neighbourhoods often face multiple barriers, from education to access to public transport and social housing.  Yet policies to address these barriers are often split between different departments and teams, both within central and local government, and are rarely connected with a growth agenda.  Connecting people to business and employment opportunities has the potential to tackle deprivation and unlock economic growth.

This event will bring together key Whitehall officials with leading voices from cities and business.  The discussion will aim to cover the following topics, with a view to sharing best practice and generating practical policy solutions:

• What are the key barriers to access to work in urban communities? 
• How can cities – supported by different government departments – best intervene to overcome these barriers effectively?  
• What role can Community Budgets and Local Enterprise Partnerships play in linking people and places with opportunities? Are there any good examples of practical interventions cities have made that others can learn from? 

This is a private event.  Please contact Niamh Sands if you are interested in attending or would like to find out more.

The need to increase house building is clear. But the question is, where should these new houses be built?

A key indicator of the demand for housing is its cost. 

Oxford ranks as the UK's most expensive city to live in: the average house cost 13.2 times the average annual income in 2010. The city is followed by London (12.2), Bournemouth (11.4) and Cambridge (10.8). In contrast, Rochdale, Hull and Burnley are among of the cheapest cities in which to buy a house in England.

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

"The overwhelming message on elected mayors from the big cities was ‘no’ today, with just one city out of 10, Bristol, opting to have a directly elected mayor – although Doncaster opted to keep its elected mayor, despite the holding of that referendum having been a rallying cry for ‘no’ campaigns.

"So, apart from it being a very bad day for the Coalition, what can we take from today’s results?

"First, the disillusionment with politics flagged in Policy Exchange’s recent Northern Lights report is clear. While local election turnout is rarely high, it was less than a quarter of the voters in Manchester, Bristol and Nottingham. Nottingham had one ward where only 8% voted. This should send a strong message to national and local politicians of all parties that they need to do far more to generate debate, engage with local voters and show how local politicians affect daily lives.

"Second, the Government messed up a critical opportunity to promote directly elected mayors. There have been some speeches but too few people even knew that there were mayoral referenda in their cities, let alone what the pros and cons might be. And although campaigns such as Yes2Mayors worked hard to get the message out, by not nailing its colours to the mast and spelling out the powers that will be afforded to mayors, the government has missed a major chance to convince voters that elected mayors could make a difference in their cities.

"Third, the geography of our politics has become even clearer, with the North and Midlands – which continue to suffer most in this slow recovery - even more dominated by Labour. It’s notable that two of the mayors who were elected were both Labour, in Salford and in Liverpool. We’re still waiting for the London result as I type, but it’s looking closer than originally predicted – and if it’s Ken who’s elected then the Coalition will have had an appalling urban result.

"The attention now has to turn to what happens next. For Bristol who voted yes, the focus over the next six months will be the mayoral election in November. Candidates need to set out what they would do, how they would support local economic growth and what extra powers they’ll need, as well as working to engage a generally uninterested electorate.

"For other cities, the focus will be on City Deals and taking actions to support the local economy. And it’s vital that the government stay committed to supporting the prosperity of cities regardless of which way they voted.  While David Cameron warned that the mayoral referenda were a choice betweenjoining the race or falling behind, Nick Clegg’s reassurance that the further devolution of powers would not be contingent upon cities voting yes was welcome. 

"Ultimately, it’s strong and accountable leadership across the right economic geography that matters most for a city’s prosperity and in the new era of localism it must be recognised that this will come in different forms across different places.  Greg Clark needs to be a Minister for Cities and not a Minister for Mayors.

"In the longer run, we would like to see leadership at a city region level – ideally ‘Metro Mayors’, especially for England’s largest cities.  And they should have real powers and funding, tailored to the particular needs of each city.

"Cross-boundary working, as demonstrated by the combined authority in Manchester, is a good step in that direction.  All mayors – and city leaders – need to work with their neighbours to make sure decision-making is coordinated and that the economy remains the priority. But if the UK is to have more mayors, it’s down to the government to set out why mayors would make a difference and what powers they would come with – otherwise it will be the same old story in any future referenda."

ENDS

For further information or to request an interview please contact Niamh Sands on 020 7803 4309 / 07763 734 845 / n.sands@centreforcities.org

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 referenda results today were overwhelmingly against elected mayors with, currently, eight out of ten cities saying ‘no’.  Manchester, Coventry, Nottingham and Bradford rejected this model of city leadership this morning, followed by Newcastle, Sheffield, Wakefield and Birmingham this afternoon.

Read the full article in Public Finance

Manchester was always more likely to vote ‘no’ than yes’ (although the final result was closer than had been expected, 53.24% against, to 46.76% in favour). This is because the city already has many aspects of the strong leadership that a mayor could offer – and that’s true whether you talk to the business community or central government. Sir Richard Leese and Sir Howard Bernstein are already widely regarded as high profile and effective ambassadors for their city, even if their names are not widely recognised by the UK public.

But the big question facing Manchester now is whether the city will lose out by not having a mayor and being excluded from David Cameron’s inner “cabinet of mayors”. I was never convinced that tea with Cameron would be enough to convince Mancunians to vote for a mayor – after all, tea with ministers is on offer to the leadership team there now.  But losing out to Birmingham or Liverpool – or Salford – on additional powers or perks would be a different matter. 

Read the full article in LGC

Highlights from my search include flatshares with 5 other well-educated young professionals all scraping to get by and an £800 per month room in an ex-council flat with the washing machine on the tiny balcony. I don't consider myself a fussy person or an elitist by any means, but, I do have a threshold of what I will pay for low-quality housing. A report from the London Assembly shows that almost 1 in 3 rented houses in London do not meet the 'decent homes' standard.

Read the full blog on Huffington Post.

The key question voters should be asking is what powers these elected mayors will have. Without understanding more of the detail, it will be difficult for citizens to make an informed decision when faced with their ballot paper.

Read the full article on Left Foot Forward

Next week, voters in ten English cities will decide whether to move from the traditional leader and Cabinet model to be led by an elected mayor. As expected, this is generating plenty of discussion in local and national media from commentators both for and against elected mayors.

This is potentially one of the most significant changes to England's political landscape in many years. Even David Cameron has taken the time to publicly back the campaign for mayors, visiting Bristol to discuss the issue earlier this week where he called it a 'once-in-a-generation chance to change the way our country is run.'

Centre for Cities has consistently argued that, if given the right powers, mayors have potential to make a positive difference to cities. Here's why.

Read the full article on Politics.co.uk

The Boris and Ken show may be stealing most of the headlines but on 3 May ten of the largest English cities outside London will be hosting referenda to determine whether they will be run by a directly elected mayor instead of a leader and cabinet.

There has been much discussion about elected mayors – should we go for them or shouldn’t we? It was back in 2000 when cities were given the option to move to the mayoral model, yet since then only 12 out of 410 local authorities have chosen to do so. Conviction from government, however, remains strong, as demonstrated by David Cameron’s speech on Monday: “If you want to see your city grow more prominent, more powerful, more prosperous - get out and vote yes.”

Read the full article on New Statesman

Data compiled by Centre for Cities illustrates the size of the task in hand for mayors
 
Elected mayors will have some of the tools to drive real change in the cities that elect them, but they will need a wider remit to meet the challenges ahead according to a study by Centre for Cities. 
 
Mayoral Manoeuvres, the data study produced by the leading think tank for urban economies, offers a glimpse into how big the job for mayors will be.  They will represent at least two thirds more people than the average constituency MP and if all cities vote to have a mayor on 3 May then an additional 10% of people in England will be led by a mayor.  When London is included this rises to over a quarter of the country's population.   
 
In addition, elected mayors will handle significant budgets - in the case of Birmingham, the £2.2 billion for services that the mayor would control is large enough to rival the budget of the Department for Environment, Food and Rural Affairs.  
 
But is this remit wide enough to make a difference?  In cities that elect them, mayors will inherit the responsibilities that council leaders had before them.  Unlike London's mayor, elected mayors will need to manage a range of public services.  Centre for Cities argues that the economy should be at the heart of the mayor's agenda.  Mayors need to ensure that their focus on public services does not distract from taking and influencing decisions that can support economic growth - such as transport and planning.  
 
To give mayors the best potential to deliver a strategic plan for growth, where there is appetite for it, in 2016 cities should have the choice to elect a 'metro mayor.'  These mayors would govern across local authorities, covering a larger geographic footprint to reflect the city's natural economy. 
 
Alexandra Jones, Chief Executive of Centre for Cities said, 
 
"Centre for Cities' data provides a snapshot of the size of the job mayors will face in the cities that elect them.  Like council leaders, they will have a big job to do and it still remains to be seen what powers will be devolved to mayors.  At the very least we think they should make decisions over transport and planning that are of strategic importance for growth.  This is where effective decision making can really shape the economic fortunes of cities."
 
"In the short term, mayors will need to focus on building excellent relationships with neighbouring authorities to ensure that decisions on major planning, skills and transport policies are not restricted by political boundaries.  By the time of the next electoral cycle in 2016 we hope that national government will allow those cities with the appetite for it to introduce metro mayors."

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

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.

On 3 May 2012, ten of the largest English cities outside London - Birmingham, Leeds, Sheffield, Bradford, Manchester, Bristol, Wakefield, Coventry, Nottingham and Newcastle - will decide whether to replace the current local government model with a directly elected mayor.  

However, the exact size and scale of the job that new mayors will face has yet to be widely discussed – nor the fact that these jobs will be different to that of the London mayor because they will be taking on council leader responsibilities as well as mayoral responsibilities.  

This brief note looks at the size and the nature of the job that council leaders do now, and that new mayors will take on, as well as reviewing the resources at their disposal.  It then considers what powers mayors may need to deliver on a key aspect of their brief: supporting the growth of the local economy.  

Download the full report.

Selected coverage • Left Foot Forward • Times (£) • New Statesman • Birmingham Post • ITV • LGC (£)

We'll be following the results of the mayoral referendums as they come in on the blog and Twitter.  Get in touch on 020 7803 4300 / n.sands@centreforcities.org if you would like any further information or comment from Centre for Cities' spokespeople.

London has the most dynamic economy in the UK, as well as some of the highest levels of inequality in the country.

In a challenging economic climate, London’s Mayor needs to be focused on the city’s economy, backing policies which support job creation in the short term and develop London’s role as a leading global city in the longer term.

The Mayor of London must demonstrate that the city is open for business.

Priorities for the Mayor of London should be:

To act as an ambassador for London as a place for people to live and business to thrive:

The Mayor has a vital role to play in making the case for London and communicating the capital’s importance for the UK’s economic potential. The Mayor should:

• Focus on explaining the city’s pivotal role to Whitehall, to other cities in the UK and to the wider world, helping to attract investment and residents to the city.

• Use the Jubilee and the Olympics to showcase London to the rest of the world. There should be a clear plan for the Mayor to make the most of these opportunities.

To tackle youth unemployment:

That means supporting job creation as well as investing in skills. Too many of London’s young people lack the skills employers look for - in 2011, nearly 40% of London’s students left school without A* to C grades in GCSE Maths and English. The Mayor needs to address this issue immediately. The Mayor should:

• Continue to support policies such as apprenticeships by making them a condition of all GLA contracts, as the current Mayor has done with the London Living wage.

• Work with the London Chambers of Commerce, the Federation of Small Businesses and other business organisations to build a visible campaign to boost awareness of the Youth Contract among employers.

• Use the Mayor’s mandate to campaign for schools to focus on numeracy and literacy as a priority, building on the Evening Standard campaign.

Upgrade London’s infrastructure:

The Mayor needs to continue to improve London’s public transport and aviation systems if London is to attract global investment. The Mayor should:

• Focus on making the existing network more affordable for jobseekers. He or she should work with boroughs, government departments and Work Programme Providers to target concessionary fares to those seeking work.

• Work with Government to ensure the aviation review delivers the best result for London.

Deliver more housing in the boroughs where there is demand for it:

It is critical to ensure that London’s housing does not hold back the economy. The Mayor should look to build more housing in places with high demand, as well as delivering more affordable homes where they are needed. The Mayor should:

• Simplify the process of delivering housing in target areas by removing the regulations and requirements that hinder this process. The Mayor should do this by making the strategic planning system as efficient as possible and work with the boroughs to ensure that their planning departments are working effectively.

• Ensure that Section 106 requirements are proportionate and do not delay or discourage the development of new homes.

• Work with boroughs to make better use of public assets, including public land and buildings, to bring forward development.

• Consider allocating part of the mayoral budget to top up the New Homes Bonus to incentivise housing development in London Boroughs

Advocate the reform of business rates to incentivise more development:

About a quarter of the UK’s GVA is generated in London, demonstrating the importance of a supportive business environment in the capital. Effective reform of the business rates system would allow local authorities to retain a portion of the growth of future business rates and incentivise new development to support business expansion and economic growth.  The Mayor should:

• Champion proposals to reform the business rates system to MPs, Peers and colleagues in Whitehall.

Drive cross-working between the London Boroughs to increase investment available for the whole London:

The Mayor of London has a vital role to play in working with London Boroughs to make the strategic decisions that drive economic growth in the capital. The Mayor should:

• Encourage and facilitate collaboration between London Boroughs to ensure that the difficult decisions on planning, housing and transport policy are made quickly and targeted at the right places for the benefit of the whole of the capital.

• Develop London’s proposals for cross-borough pooling of income streams, such as Business Rates, New Homes Bonus and Community Infrastructure Levy.

This month’s labour market release has brought with it some slightly better news than has been the case in previous months.  Headline unemployment has edged down by 0.1 percentage points, while the employment rate has increased and there has been a rise in the total hours worked.  

This suggests that after contracting by 0.3 percent in the final quarter of 2011, the economy has picked up in recent months.  But any such improvement is fragile – the number of people working part time because they could not find a full time job is at a record high and there has been a worrying increase in long-term unemployment, especially among younger jobseekers, over the last year.

Sharp increases in long-term youth unemployment

The claimant count data indicates a sharp rise in long-term unemployment over the last year.  Over 350,000 had been on unemployment benefits for more than a year in March 2012, up by nearly 140,000 since last year.  

The increase is particularly striking amongst 16 to 24 year olds.  Over the last year the proportion of claimants unemployed for more than a year has almost doubled and is now four times higher than at the start of the recession.  Over 55,000 16 to 24 year olds have been on JSA for more than a year.  

Some cities have been hit harder than others

General trends show that long-term youth unemployment is higher in cities with higher claimant rates and less buoyant economies.  In Hull, for example, the youth claimant rate stands at 11 percent; nearly a fifth of these young people have been unemployed for more than a year.  All cities, with the exception of Belfast, have seen a shift towards long-term youth unemployment, with some seeing a more pronounced trend.  From March 2011 to 2012, Sunderland and Middlesbrough have seen the sharpest rises in unemployed 16-24 year olds claiming benefits for more than a year.  A year ago less than 2 percent of young unemployed people in Sunderland had been on benefits for more than a year; today this figure has risen to nearly 16 percent.

Long-term youth claimant rates remain relatively low in more prosperous cities in the South.  Belfast is the only city to have seen almost no increase in the proportion of young claimants staying on benefit for more than a year.  

Download the full briefing.

Tables to download

• The 10 cities hardest hit, and 10 least bad
• Full city breakdown
• Youth unemployment

Centre for Cities will be presenting emerging findings from our Low Carbon Cities research strand at a fringe event as part of Base London.

Contact Niamh Sands for further details.

For details of the Base London conference see http://www.basecities.com/london

Directly elected mayors have the potential to make a real difference to cities’ economic performance - they offer enhanced visibility; opportunities to exercise leadership; make strategic choices; and drive action through local authorities and their partners.

An elected mayor could use both formal and informal powers with the aim of overcoming four key governance challenges to economic policy making.  An elected mayor:

• Has the potential to help city authorities to be decisive on issues of strategic economic importance.

• Can act as a representative to local and central government.

• Could bring coherence to the actions of the public sector and collaborate with local authorities,businesses and other players in the wider local economy.

• Would be well placed to help cities navigate the complicated web of relationships with Local Enterprise Partnerships (LEPs), Integrated Transport Authorities and others.

To be impactful and effective in this way, elected mayors must be afforded the powers to make strategic decisions for growth.

Ultimately we would like to see the introduction of metro mayors covering the functional economic areas of England's largest cities.

Centre for Cities advocates that the package of powers outlined in our submission document will give mayors the chance to have a positive influence on their cities.

Announcements ranged far and wide. We had planes, in the form of a review of London's airport capacity, and trains, with investment in the Northern Hub rail network creating better links between Manchester, Preston, Sheffield and Blackpool - great to see and long overdue. We also had automobiles, with the pre-Budget announcement that funding options for Britain's roads would be reviewed. We even had fibre-optic cables, with more funding for ultra-fast broadband in ten major UK cities, and an extra £50 million for a next wave of super-connected cities.

All of this could create jobs in the short-term and help businesses in the longer-term. But announcing limited pots of funding for a few specific policies is insufficient, nor does it allow places to take their own decisions on infrastructure investment.

Read the full article on Regen.net

Each city faces a different set of economic challenges and should be allowed to take a tailored approach based on their own unique circumstances.  Mayors are no panacea, especially given the scale of the challenge some cities face, but they are well placed to take the tough and timely decisions needed to drive growth.

The chapter outlines four challenges that elected mayors have the potential to address:

1. Take strategic decisions

2. Represent their city and its population

3. Coordinate the public sector

4. Encourage city region collaboration

Other authors include Tony Travers, Bruce Katz, Ed Cox and Andrew Adonis.

Download "What can elected mayors do for our cities" from the Institute for Government website: http://www.instituteforgovernment.org.uk/content/elected-mayors

This private discussion was attended by key Whitehall officials, city experts and representatives from across a number of mid-sized cities, and built on our 2011 Hidden Potential research.  Contact Paul Swinney for further details.

This work is supported by PwC and Sunderland City Council.

As the UK economy moves gradually towards economic recovery, this year’s Budget was an important opportunity for the Government to demonstrate that it has a clear plan to support economic growth as well as manage the deficit. The Chancellor recognised this, presenting his third (including the "Emergency Budget") Budget as the Government’s plan to “reward work and support growth”.

But to what extent did he succeed? As in previous years, the Government’s commitment to reducing the deficit meant the Budget had to be fiscally neutral, with any additional spending offset by cuts elsewhere.  As well as the headline grabbing tax initiatives, it was good to see that cities - the drivers of the UK economy - were well represented, with announcements on devolution of powers, borrowing and infrastructure all affecting cities. Other measures, such as support for enterprise and access to finance, will also affect city economies.

This note reviews what the Budget 2012 will mean for the UK’s cities. It argues that there are some positive measures, but that there are missed opportunities for more place-responsive policies, in particular on youth unemployment, skills, job creation and enterprise.

Our briefing outlines the main implications for cities, including

• Devolving powers to cities
• Investing in growth
• Infrastructure
• Housing and planning

Download the full briefing.

We're holding a post Budget Briefing on Thursday 29 March with Vince Cable MP.  Places are limited but do get in touch if you're interested in attending.

This short report compares the economy of York with a number of selected comparator European cities to inform York’s aspiration, set out in The York Economic Strategy 2011-2015, of becoming “a top 10 European city” compared to European cities of a similar size. The purpose of this report is to analyse:

• York’s advantage in high-skilled labour
• The city's main competitors
• York's private sector structure

Summary findings

• The population of York has grown strongly at a rate of 1.4 percent per year over the past five years – from 189,200 in 2005 to 202,400 in 2010.
• 40 percent of York’s working population holds a degree or better, a proportion with only Cambridge, in the UK, and Oulu and Utrecht ranking higher amongst comparable European cities.
• Despite its skills advantages, York’s gross domestic product per capita lags behind many European cities. This could reflect levels of productivity or (which is more likely) the type of industry located in York (services or leisure) compared to other high performing cities such as Regensburg, Tampere and Oulu (manufacturing and energy).
• York’s private sector performs well and is a significant strength for the city to capitalise upon. It is in the top 10 for the number of firms with 1-250 employees and in the top 15 for the number of firms employing over 250 people.
• However, while York’s existing private sector base is strong, its dynamism lags behind European comparators. The number of new businesses entering the market as a proportion of existing businesses is low in York (8.4) compared to the European leader for a city of this size, Trondheim, Norway (18.2). 

Unemployment has stabilised and total hours worked creeps up

After deteriorating last year, there have been signs of improvement in city labour market in recent months.  Unemployment appears to be stabilising and the total hours worked in the economy has increased.

There was a large fall in total hours worked after the Royal Wedding as a result of the extra bank holidays. This fall was expected to be a one off, but there was no bounce back in following months, underlining the weakness of the economic recovery.  However, there has been some improvement in recent months suggesting that demand in the economy may be picking up, despite contracting by 0.2 percent in the final quarter of 2011.

City Deals have the potential to significantly change the relationship between central and local government. 

Following on from our City Deal workshops earlier this year, we've drawn together some key lessons from the negotiations process so far. Our briefing note highlights major opportunities that both cities and central government need to seize if the devolution process is reach its full potential. 

The City Deals process has moved fast, and both Government and cities have learned a lot in a short time.

The Government now needs to demonstrate that cities are at the heart of its economic growth strategy by devolving substantive powers and funding through the first round of City Deals and quickly opening up City Deals to other cities.  Cities across England need to rise to the occasion by setting out clearly evidenced and very specific proposals about how devolution of specific powers and funding could deliver better outcomes and / or greater efficiency.

While City Deals are not a perfect process, they are the best chance in a generation to rebalance relations with central government and devolve real powers.

Next week’s Budget statement is an important opportunity to bolster the UK economy and to provide the conditions for growth as it continues on the path to recovery.  

Cities need to be at the heart of this strategy. In 2009, England’s cities generated 65 percent of Gross Value Added despite covering just 14 percent of the country. Cities were also home to 55 percent of firms and 61 percent of employment in 2010, meaning they will be a core component of future growth.

Over the last year the Centre for Cities has welcomed the increasing emphasis the Government has placed on cities as the drivers of the national economy. Policies such as City Deals and Whole Place Pilots, which have handed additional flexibility and autonomy to cities, are important steps towardsenabling cities to make the most of their economic potential. There is, however, more that can be done.  

The powers that cities have gained to date have been somewhat fragmented, and many national policies continue to be “spatially blind”, not allowing the flexibility that will help improve the quantity and quality of outcomes for local people, firms and communities.  Our Budget Submission sets out five areas which will help boost economic growth and job creation in our cities:

1. Improve skills

2. Boost housing supply

3. Stimulate local economic growth

4. Extend City Deals

5. Take a place-based approach to unemployment. 

With one exception they are cost neutral to the Government, and all have the potential to be revenue positive in the future. In addition, all the recommendations fit with the Government’s devolution and localism agendas, whilst recognising that central Government continues to play an important role in providing a national framework, delivering economies of scale and providing additional support to particular places where this is needed either to stimulate higher levels of growth or help the most vulnerable.

Labour market stats, the city picture

Today's labour market statistics show that the labour market continues to stabilise at a national level but the road to recovery will be a long one for many cities.

Last year marked a return to rising unemployment, as the economic recovery has faltered and the public sector has continued to shed jobs. The cities hit hardest at the height of the recession have yet again seen some of the largest rises in JSA claimants. Despite showing signs of recovery in 2010, over the last year, claimant rates in Hull and Grimsby rose by ten times the rate of more buoyant cities such as Reading and Cambridge.

Every city faces a different set of labour market and wider economic challenges. What is right for Hull and Doncaster will not be right for Bristol and Brighton.  There is a real opportunity for the Chancellor to use the Budget next week to commit to giving cities the powers and resources they need to respond to their unique circumstances. Put cities in the driving seat and they will step up to the challenge.

Analysis by Paul Swinney and Naomi Clayton from Centre for Cities. 

For interview requests, please contact Rachel Tooby, External Affairs Manager – 020 7803 4316 / 07748 183 026 / r.tooby@centreforcities.org

Notes to editors:

Also available on today's data release:

• City-by-city fact sheet on youth claimant data
• Cities hit hardest, and the ten that have fared best
• City-by-city table of JSA claimants

Further city-by-city data on a wide range of indicators including housing, business and environment is available from 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

We are planning a varied programme including fringe panel events, intimate Ministerial roundtables and high-profile receptions in Brighton, Manchester and Birmingham in 2012, positioning cities and the economy at the heart of the fringe.  In 2011, speakers at our packed out fringes included Vince Cable, Mark Prisk, Lord Beecham, Jack Dromey,Sir Ian Wrigglesworth and Will Hutton.  

To find out more, take a look at the overview of our party conference plans or get in touch with Niamh Sands for further details.

Cities Outlook 2012 attempts to measure inequality in our cities. While there are many ways to look at inequality, this research looks at the difference in unemployment in the worst and least affected neighbourhoods within each city.

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

London is evolving rapidly and the next 10 years will see the city experience major physical and socioeconomic change.

This research - produced in association with GVA - considers the combined implications of the main factors influencing this change and concludes that the boroughs that are likely to see the greatest change or have the potential for significant change over the next decade are:

• Camden
• Croydon
• Hackney
• Hammersmith & Fulham
• Haringey
• Islington
• Lewisham
• Newham
• Southwark
• Tower Hamlets

The area of greatest change is likely to be south of the river where the momentum of development seen over the last 10-15 years in Islington and Camden is just begining to take hold in inner Southwark/ Bankside/ Bermondsey in particular and Nine Elms/ Battersea further west in Wandsworth.

Outside Central London the key to any significant transformation will be a positive planning regime, major land releases and transport infrastructure investment. The report names six ‘Places to watch’ that are beyond the city centre and city fringe where market, transport and policy factors will combine to create real opportunity for property market change and regeneration. The ‘Places to watch’ are:

• Old Oak Common/Park Royal
• White City
• Tottenham Hale/White Hart Lane
• Royal Docks
• Deptford Creek
• Croydon town centre

Overall, London’s economic centre is growing along major transport corridors, and this is where greatest potential exists.  Boroughs affected need to be proactive in facilitating and engaging with investors and the development industry to maximise this economic and regeneration potential.

If this can be achieved, London, and these ‘places to watch’, will be very different in 10 years’ time.

Download the full report.

Download the methodological appendix.

Speakers include:

Rt Hon Vince Cable MP

Sir Merrick Cockell (Chair, Local Government Association)

Alexandra Jones (Chief Executive, Centre for Cities).

This event will take place from 745am-9am, Thursday 29 March at the Coin Street Neighbourhood Centre.

See photos from the event on Flickr.

This is a private event. Please contact Niamh Sands if you are interested in attending.
 

The Local Government Finance Bill presents a fundamental shift in how local government funds itself and supports the business community.

Overall, it is a first step in the right direction towards more self-sufficient cities that foster economic growth.  However, the design of business rates retention introduces perverse incentives and leaves out some places — the urban outliers — which do not stand to benefit much from the local retention of business rates revenues.

One perverse incentive, called the “delay effect”, is created through the 10-year resets of the system.  This will penalise local authorities for bringing development forward late in a reset cycle because the retained revenue after reset is uncertain.  This incentivises authorities to delay a development’s completion until the beginning of the next reset period.  

The second issue lies in the exclusion of rateable value increases from rates retention during revaluation and resets to the system.  This strips out growth in rateable value that occurs from public realm and transport improvements.  This will effect cities which would benefit more from investing to support their existing business stock rather than seeking to expand it.  

Reducing the effects of these elements would create a fairer and more inclusive system which rewards cities that support economic growth in a variety of ways.  

• Creating a rolling-resetting system or expanding resets to 20-year periods would remove or reduce the delay incentive created by resets.
• Including rateable value uplift will incentivise councils to invest in the public realm, and it will ensure that those places which need such investment to kick-start business growth are encouraged to do so.

Download the full report.

Selected coverage • Conservative Home • Public Finance • LGC (£) • Localgov.co.uk

Part time employment up, full time employment down

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.

Unemployment increased again in the three months to November compared to the three months to September. The further 0.1 percentage point increase means that the UK’s unemployment rate now stands at 8.4 percent.

The impact of the recession on women

The impact of the increase in unemployment on men and women has varied since the onset of the downturn in February 2008:

Ratio of male to female unemployed

The ratio increased sharply through to July 2009 as men were hit harder by the early part of the recession.   This reflects the nature of the downturn – manufacturing and construction, which traditionally are male dominated industries, lead the contraction of the overall economy.This trend reversed almost as sharply from the mid 2009 to the end of 2010, partly reflecting the stronger recovery of the manufacturing and construction sectors (although they both remain well below their pre-recessionary peak in output terms).   As a result the ratio of male to female unemployed people is now at a similar level as it was in February 2008.

The gender ratio across cities

The trends in the gender ratio across cities when looking at the claimant count looks a little different to the national picture shown above.  The graph below shows the trend in the gender ratio for Dundee, which had 2.7 male Jobseeker’s Allowance claimants to every female claimant in December 2011, and London, which had the lowest ratio.   It also shows that the ratio of male to female claimants has declined in both of these cities since the onset of the recession and is now much lower than it was in February 2008.

There is also a spatial pattern to the gender ratio.   The bottom five cities for this measure are all in the South East – there tends to be a more even split between male and female claimants in these cities.  Hastings is the only city in the South East in the top five cities on this measure.   And although not shown in this table, Hastings and Norwich are the only southern cities in the top 20

Gender ratio across UK cities, December 2011

Download the full briefing.

Many UK cities are continuing to feel the effects of the downturn and disparities between cities are growing, according to Cities Outlook 2012.  However, despite the sombre national forecast, Centre for Cities’ annual health check of UK cities suggests that there will be glimmers of growth from some cities this year.

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

As 2012 unfolds, cities will become increasingly important to the UK’s continued journey out of recession.  

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. We're also happy to supply high resolution images of any of the charts, maps or tables in this publication.

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.

Preston is a Partner City in the Centre for Cities’ Partner City network.  The programme works closely with a small group of cities to inform economic development strategies and improve economic performance.

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 - including Brighton, Colchester, Ipswich, Luton, Medway, Milton Keynes, Norwich, Oxford, Peterborough, Portsmouth, Southampton and Southend-on-Sea - 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. 

Mayoral Manoeuvres

As ten cities get ready to vote on whether or not they want an elected mayor to run the city, our short brief gives an overview of the powers and responsibilities new city mayors would have.

Selected coverage • Left Foot Forward • Times (£) • New Statesman • Birmingham Post • ITV • LGC (£)

Urban Outliers: Will the reorganisation of local government finance incentivise growth?

Building on our 2011 work - Room for Improvement, Capital Gains - this update gives insight into two particular elements of the proposed local government finance system that means that some places - the Urban Outliers - will not stand to benefit as much as they should do from the local retention of business rates.  Reconsidering the 10-year reset and the restriction of rateable valuable increases from rates retention would creat a fairer and more inclusive system.

Selected coverage • Conservative Home • Public Finance • LGC (£) • Localgov.co.uk

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

Many of England’s weaker city economies have high proportions of residents with no or very few formal qualifications.  One of the biggest challenges that these cities face is to improve the “intermediate” skills profiles of their populations.  Any improvement will have long term benefits for both individuals in these cities and the businesses that are located there.  And by implication it is likely to have a positive impact on future economic growth in these cities.

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.

• 14 June: Andrew Carter is speaking at ITW's event on Making our cities healthier, wealthier and safer
• 26 June: Alexandra Jones is chairing SocInvest
• 27 June: Alexandra Jones is speaking at the RTPI Planning Convention 2012
• 3 July: Alexandra Jones is speaking at the Going for Growth conference in Manchester
• 17-19 October: Alexandra Jones is speaking at the National Housing Federation Annual Conference

Please contact us 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

On 28 October 2010, Local Government Secretary Eric Pickles and Business Secretary Vince Cable proudly announced the birth of the first 24 Local Enterprise Partnerships (LEPs).  The press release said that the partnerships would bring the public sector and business together to “take charge of the local economy” – driving growth, creating jobs and providing strategic leadership.   

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

Since the announcement of the Local Government Resource Review (LGRR) consultation, the Centre for Cities has been an active researcher, collaborator and discussant about the proposed measures.  We have heard concerns and suggestions from the Department for Communities and Local Government (DCLG) and other government officials, members of local government, property developers, investors, infrastructure providers and academics.  Our research provides a well-rounded and thoughtful response to the LGRR consultation, as summarised here.

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

The Local Government Resource Review (LGRR) has the potential to transform the way that local government finances are allocated in the future.  The reforms aim to introduce a strong incentive for local economic growth, increase the autonomy of local government, while at the same time ensuring that all local authorities are able to continue to meet the needs of their areas.  

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:

To date, the Government’s policy thinking on local economic development has favoured those cities that are either large in scale or have strong private sectors.  However, a policy gap currently exists for “mid-sized” cities that have economic potential but suffer from underlying weaknesses.

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.

The weakening labour market signals struggles ahead for the economy

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 the increasing 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 the impact that poor public finances can have on national economies.  But such turbulence may well require a policy response 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

Public sector job cuts begin to bite

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)

Transport has a key role to play in helping overcome spatial mismatches between the places where lower skilled people live and where the jobs they seek are located.  Connecting people to employment sites has been a key aim of past travel-to-work initiatives from which three main lessons have emerged.  In most cases transport solutions alone will not suffice in helping individuals into employment.  Other factors, such as skills and demand in the local economy, matter.  However, transport policy can be a viable means of achieving positive employment outcomes and should be seen as part of any policy mix aimed at helping individuals access jobs - as well as the role it plays in enabling economic growth and creating new jobs.  

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

Surprise rise in unemployment triggers further questions about growth

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 underemployed army continues to strengthen

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.