A new report from leading independent economics consultancy Cambridge Econometrics, in partnership with Cambridge University, says the Core Cities are packed with potential, but had they grown at a similar rate to London they would have added £120 billion to the economy between the early 1990s and today.
The City Evolutions report, carried out by Cambridge Econometrics and Prof Ron Martin of Cambridge University for Core Cities UK and welcomed by the CBI, recognises the Core Cities are already ‘mission-critical’ to the UK, delivering 25% of its economy. But it adds that city growth could be at risk and that a harder Brexit will have a more severe effect on the economies of Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Belfast.
Key findings include:
- Core Cities’ productivity was higher than the national average and higher than London’s in the early 1980s.
- Core Cities have not achieved their full growth potential, and this growth has been stymied by recessions and other economic set-backs.
- The UK needs to act now to build-in resilience and the ability to recover quickly from future economic shocks, which means investing in infrastructure and skills and giving cities more freedoms and controls over areas like transport.
- Enhancing physical and strategic connections between Core Cities and surrounding areas is likely to secure major economic gains.
The report adds that while estimating the impact of Brexit is 'fraught with difficulties', it expects all the Core Cities to experience a relative fall in both GVA and employment as a result of the UK's exit from the European Union.
And it makes the case for improved transport links, for example Northern Powerhouse Rail and the Midlands Rail Hub, adding that substantial investment is required in the road networks that connect the Core Cities and their towns and surrounding areas.
Jim Hubbard, Head of Regional Policy at CBI, said: “More work is needed so the UK’s major cities are resilient to future economic shocks and well-placed to drive forward prosperity.
“As the CBI strives to ensure the UK remains a competitive place to innovate, invest and export, this research provides powerful arguments for devolving power to towns and cities. Local leaders working with central government, business and their communities are in a strong position to address regional imbalances. It is critical during the uncertain times the UK faces that no place is left behind.”
Cllr Judith Blake, chair of Core Cities UK and Leader of Leeds City Council, said: “This report underlines the case for Government to invest in our cities to improve their resilience in the face of Brexit. It also makes the point that unless we rebalance the UK economy, millions of livelihoods across the entire country will be at risk from the next economic downturn.”
Report co-authors Ben Gardiner from Cambridge Econometrics and Prof Ron Martin of Cambridge University added: “Back in the 1970s and 1980s the Core Cities led productivity growth, and could do so again if they are accorded the priority in Government policy and spending that they deserve, but which has been lacking over the past two decades and more.
“Rebuilding the tradeable base and supporting the economic modernisation of the Core Cities should be at the heart not only of the Government’s new Industrial Strategy but also of its economic policies more generally. We hope that the evidence base we have gathered acts as a wake-up call to central government to improve the allocation of public resources beyond the M25 - because raising the Core Cities’ performance will boost that of the UK as a whole”.
The report can be read on both the Core Cities and Cambridge Econometrics websites www.camecon.com