Cities Outlook 2012 Tom Bolton Centre for Cities March 2012 Cities as engines of growth What’s happening to city economies now? What role can LEPs play in boosting economic prospects of their area?

Centre for Cities The Centre for Cities is a non-partisan research and policy institute, helping cities improve their economic performance 2

National growth is sluggish Outlook 2012 – annual state of the cities publication. National economic context 3

Forcing the Government to be more interventionist Come back to this at the end, but interventions opening up more funding sources and opportunities for LEPs.

Disparities between cities have grown 08-11 - % change in claimant count over time. End of 11, more than 6% difference between lowest claimant count in Cambridge and highest in Hull. MK – under the UK average – 1.9 Northampton – 1.6 Luton – just over at 2.2

Partly driven by industrial structure Changes in claimant count 08-11 – no claiming benefits Cities that are more reliant on lower skills jobs suffered most, while those with largest knowledge-based sectors doing best. Level 2 occupations tend to require a basic level of skill. They include occupations such as administrative, secretarial and related and customer service occupations and process, plant and machine operatives. The definition of knowledge intensive business services used here is the “wide” definition used in CLG’s State of the English Cities report. This includes activities in areas such as publishing of software, advertising and business and management consultancy.

This has implications for youth unemployment… Even bigger disparities in percentage of young people claiming benefits. Not as simple as a north-south divide – mostly cities with long-term industrial legacies to overcome and structural problems.

…and for long term unemployment Disparities also reflected in % claiming benefits long-term. Northampton 0.6% MK. 0.7% - around UK average. Luton 0.9%

A differentiated approach is required Break down of claimants by age-group, and grouped into long or short-term Shows very different picture in different cities. Cities still crucial, even lagging ones. Cities are the drivers of UK growth – 65% of the UK’s employment and 60% of GVA, from 56% of population.

But private sector dynamism is crucial to future performance… Business start-ups per 1000 population – lowest and highest.

…measured by start-ups… Close correlation between economic strength and start-ups. MK third highest Grimsby - outlier

…and by innovation Cambridge had more patents per 100,000 residents than the next 6 most innovative cities combined.

This is underpinned by skills Take us back to skills – Top and bottom 10 cities for those with NVQ4+ (i.e. degree level equivalent or higher) Northampton 55 of 64

What can LEPs do? Reflect local variation Focus on strategy Consider pooling business rates Co-ordinate spatial planning Engage with City Deals Variation – focus on what’s happening in South Mids. Avoid fashionable economic strategies. Strategy v delivery – key decision for LEPs. Because of limited operational resources and accountabilty issues, best placed to work with LAs as delivery partners. Focus on strategy to provide leadership, create partnerships and generate action where wouldn’t otherwise happen Some have been brave enough to stick to a purely strategic role and say what they won’t do as well as what they will (this eg Oxfordshire) But, is there a risk of lack of focus? some LEPs appear to be promising too much in too many areas without fully understanding economic needs of the area Planning – no strategic plans below LA level. Important to fill gap for infrastructure and housing. Government encouraging LEPs to become stat consultees, but not many taken up. City Deals – new conversations. Cities need to self-organise and approach government. Exchange not partnership. Real powers on offer - devolved major transport funding; a single capital pot; devolved Homes and Communities Agency assets and funds; City Skills Funds; and aggregated apprenticeship programmes. Open to innovative ideas – earn back – but must be specific.