The call comes as a new Joseph Rowntree Foundation (JRF) report shows how 10 of the UK’s top 12 struggling cities are based in the north – meaning some of the poorest places in the country risk being left behind by the attempts to boost economic growth and create prosperity in the north. No city in the south featured in the top 12 or 24 of the index.
JRF is calling on city leaders to harness their new economic powers and resources to create opportunities for the people and places who have previously been left behind. For instance, three of the top 12 struggling places (Rochdale, Bolton and Wigan) are located in Greater Manchester, where substantial powers and resources have been devolved.
The top struggling cities are:
So far, the Northern Powerhouse and devolution agenda has focussed on the Core Cities, the biggest cities in the country, with devolution deals already signed for areas such as Greater Manchester and Sheffield City Region. But the report demonstrates that for wider prosperity and rebalancing, areas outside the biggest cities must also share in the benefits of investment and devolution.
The study analysed the fortunes of 74 cities with populations over 100,000 people. The index is based on changes in employment rates, levels of highly-qualified workers, the number and type of full-time jobs, net migration rates, population change and change in rank.
Uneven growth: tackling city decline, by researchers at the Centre for Urban and Regional Development Studies (CURDS) at Newcastle University, examines how these places are faring compared to each other and the national average. It demonstrates that many of them are growing, but found growth in many northern cities is lagging significantly behind national levels.
For instance, cities in the south have seen a much stronger growth in full-time equivalent job creation, benefitting places such as Exeter and Milton Keynes, while Burnley and Stoke have struggled. In the top 12 struggling cities, full-time job creation fell back by -2.1% according to the index, compared to growth of 1.9% for the national average and 5.4% in the top 12 best performing cities.
The research says that economic growth alone will not necessarily reduce poverty in cities, so comprehensive and integrated packages of long-term policies around economic development, employment and skills and infrastructure are required.
Central government has a key role to play. As it stands, there is little financial incentive for town halls to address poverty. Many of the benefits generated and savings made accrue to central government. For example, local authorities receive just 7p in the £1 of the savings from helping someone out-of-work find a job at the Living Wage. By contrast, 80p goes to central government, separate figures for JRF show.
In its submission for next month’s Budget, JRF believes the Treasury could create financial incentives for councils to address unemployment through a ‘welfare earn back’ model, which would see the financial benefits of addressing unemployment shared between city regions and the government. This could create a virtuous circle which helps achieve full employment, brings down the welfare bill and provides economic security for families.
Josh Stott, policy and research manager at JRF, said: “Britain has the potential to become a more prosperous country, with George Osborne’s Northern Powerhouse playing a key role in rebalancing the economy.
“But it must reach all parts of the north to ensure prosperity is shared. To rebalance the economy and ensure local growth provides opportunity for all households, the Treasury needs to ensure areas outside of Core Cities are not left behind. City leaders – with a new suite of powers at their disposal – must also show leadership to do their part to ensure growth and prosperity is shared by all.”
Andy Pike, co-author of the report and Professor of Local and Regional Development in the Centre for Urban and Regional Development Studies (CURDS) at Newcastle University, said: “Economic and social conditions in UK cities are diverging and increasingly different. Many cities in the north are growing but are failing to keep up with national trends. There are three kinds of such cities – ‘core’, ‘overshadowed’ and ‘freestanding’ – each with different predicaments and potentials for growth and prosperity. If the commitment to rebalancing in the UK is meaningful then greater policy attention and resources by central and local government needs to be focused upon the particular needs of these cities lagging behind”.