City leaders must ensure the proceeds of growth are shared by everyone living in their regions

How well are English regions doing on inclusive growth? For the city regions in the Northern Powerhouse, pretty well on growth, but the challenge is to make this inclusive, says Dave Innes.

The city regions in the Northern Powerhouse are seeing increased prosperity. City leaders should now focus on making sure this prosperity brings gains on ‘inclusion’ – generating benefits for all residents, including those on low incomes or out of work.

This is one of the findings from a new tool released today by the Joseph Rowntree Foundation, produced by researchers at the Centre for Regional Economic and Social Research (CRESR) at Sheffield Hallam University.

The Inclusive Growth Monitor allows Local Economic Partnerships (LEPs) to see how they’re doing on inclusive growth, and compare their progress with other LEPs. Each LEP is scored on 18 different indicators based on prosperity – skills, jobs and economic output – and inclusion – incomes at the bottom of the distribution, unemployment and the cost of living.

Here we look at some of the key findings from the inaugural Monitor. But before we do, it’s useful to get clear on a couple of things. First, here we’re looking at changes over time. So coming out on the top for prosperity doesn’t mean the LEP is the most prosperous. It means the LEP made the most progress on prosperity between 2010 and 2014 (the latest year of data). Second, the differences between LEPs are relative. Coming out low on inclusion doesn’t mean the LEP has seen no gains in inclusion, just that it has seen smaller gains than other LEPs.

LEP regions with most progress on prosperity between 2010 and 2014

LEP regions with most progress on inclusion between 2010 and 2014

The maps show how regions have been doing on inclusion and prosperity, and highlights the different economic challenges faced by regions. London, Oxfordshire, Worcestershire, Dorset, Hertfordshire featured as seeing the fastest growth in prosperity. Dorset, the North Eastern, York, North Yorkshire and East Riding, Cheshire and Warrington and Coventry and Warwickshire saw the most progress on inclusion.

We can also see:

The city regions at the core of the Northern Powerhouse – Greater Manchester, Sheffield and Leeds – have enjoyed rising prosperity over the last few years, but were outperformed by many other regions on progress on inclusion.

London’s experience provides a warning to Northern city leaders. On increasing prosperity London scored far above any other LEP, but it also scored far below any other LEP on improving inclusion.

Many regions in the ‘Midlands Engine’ – including Greater Birmingham and D2N2 (Derby, Nottingham and the surrounding counties) – face the biggest challenge: they fell behind on both inclusion and prosperity. They need to both boost prosperity and ensure that this is inclusive.

City leaders should be aiming for the virtuous combination of high prosperity and high inclusion. The report highlights the different challenges they face to get there, but it also raises questions about why LEPs have fared differently.

The release today is just the start. The Inclusive Growth Monitor will be continuously updated by the Inclusive Growth Analysis Unit, a joint venture between JRF and the University of Manchester. In a couple of weeks, they will be releasing more data on core cities and local authorities in Greater Manchester and West Yorkshire.