Good Growth for Cities? North East Needs Support
Date published:
The new Demos-PwC Good Growth for Cities report looks at how well positioned UK cities are for recovery from the pandemic. This snapshot of the report focuses on the North East’s performance, changing public preferences, and steps businesses can take to drive Good Growth for all.
Good Growth for Cities Index
For the last decade, the annual Demos-PwC Good Growth for Cities Index has measured the performance of cities and regions right across the country.
The index does not only look at economic indicators, but other measures of wellbeing too. These are work-life balance, skills (16-24 and 25+), income distribution, health, environment, income, jobs, transport, owner occupation, house to price earnings, new businesses. Two new indicators have also been added to the index, which are vibrancy of local high streets and safety.
The variables fall broadly in line with the Government’s 12 missions outlined in the Levelling Up white paper, but the report notes that it is interesting that the environment was omitted. The writers recommend that local leaders should consider the environment, sustainability and climate change in their levelling up plans.
Of the 14 indicators above, the biggest improvement between 2017-19 and 2018-20 is work-life balance. There have also been improvements in the skills of workers above the age of 25, as well as income distribution and life expectancy. The writers feel these improvements are perhaps a reflection of the rise in flexible working patterns.
Most cities continue to see improvements in their Good Growth scores, and it appears that the pandemic has levelled the playing field to some degree between the highest and lowest ranked cities, with the gap narrowing slightly this year.
The North East Region
No North East cities achieved an index score above the UK average. The region also has the lowest performing city in this year’s index: Middlesbrough & Stockton. Despite this, the report stated that Middlesbrough & Stockton is also estimated to have the strongest recovery in the region. Its economy is estimated to grow by 7.0% in 2021 and by 4.9% in 2022.
The report stated that the North East and Yorkshire have performed well regarding:
- House price to earnings (7 of the 10 cities score significantly above the national average
- Work-life balance (Every city, bar Hull, scores significantly above the national average
- Income distribution (Where 9 out of 10 cities score at or above average)
The regions performed poorly in other variables, however, including income, jobs, health, new businesses per head, owner-occupation, and safety.
The report states that many of the issues faced by the North have been exacerbated by the pandemic, as many cities, even those in which the economy is in reasonably good shape, have been unable to capitalise on the changing nature of public preferences and may need support in this area. These changing public preferences are outlined in the next section.
Nevertheless, the report outlines ways in which cities and other areas can benefit from the changing nature of the way we live, and one of the examples was located in Northumbria.
The Northumbria Healthcare NHS foundation is considered to have pushed the boundaries of its expected role regarding its response to COVID-19 by setting up a PPE factory. The factory is about to become the country’s leading PPE supplier for NHS Trusts, and also revived the local textile industry.
Public Preferences
As in previous years, PwC asked members of the public to provide their views on the measures they think matter most. The report shows that there has been a marked shift in public preferences, with greater weight being placed on issues such as work-life balance, income distribution, and the environment:
- Safe and secure neighbourhoods that are free of crime (14%) [New]
- Fair distribution of income and wealth (14%)
- Adequate income levels (13%)
- Good health (10%)
- Time with family / work-life-balance (10%)
- Protection of the environment (for example, carbon emission reduction, preserving forests) (10%)
- Good quality transport systems (road and rail in particular) (8%)
- Secure jobs (8%)
- Access to shops on a high street (5%) [New]
- Affordable housing (4%)
- Having the skills and education needed to be in employment and earn a living (2%)
- High levels of entrepreneurship and new business start-ups (2%)
Jobs and Skills, which were perceived as two of the most important variables in the index last year, saw significant decreases this year. It is not yet clear whether this is a temporary shift in values due to the way we have been living over the past couple of years, along with relatively strong confidence in the employment market, or if this is a more permanent shift in preferences.
Actions for Businesses
Levelling Up and the Reality of Regional Inequality
- Take a proactive role in developing local economic strategies, in partnership with local and regional leaders, to identify strategic priorities to boost productivity and support innovation.
- Play a greater role in delivering a fair recovery across the UK, with a particular focus on reskilling and upskilling, to ensure people are equipped with the right tools for future jobs, particularly in green growth industries.
- Seek collaborative ventures, including partnership and coordination roles, with central and local government, charities and community groups to create business opportunities and improve the effectiveness of levelling up interventions.
Capitalising on Growth Outside Larger Metropolitan Cities
- Provincial economies typically experience a deprivation of skilled workers as a result of low wages or better opportunities being offered in more urban areas. Businesses can improve this by investing in the development of talent, through retraining and apprenticeship programmes.
- Businesses should continue to explore ways to increase flexibility for their employees in a hybrid working environment. Greater flexibility and the opportunity to decide when and where to work may encourage more employees to help support rural and provincial economies at the same time as helping larger metropolitan areas recover.
- In partnership with local leaders, businesses can push forward the circular economy and green growth agenda by exploring opportunities to localise supply chains as much as possible, reducing excessive carbon emissions from production and transportation and capitalising on local assets.
Driving Social Mobility and Addressing Intergenerational Inequality
- Recognise the cost that the pandemic has had on the upskilling experience for young people, whether that be virtual fatigue and the perception of online training, or that new hybrid ways of working have made it increasingly difficult to learn from colleagues on the job.
- Begin to reimagine the upskilling journey, but first they may wish to increase their involvement with education and training providers, as well as apprenticeship schemes, to understand where improvements can be made to reinvigorate the learning experience.
- Look strategically at the skills system, focusing on skills that will enable the capabilities of the future.
Green Growth to Provide a Basis for All Future Action
- Craft a coherent and actionable strategy to deliver sustainable growth by breaking down ESG considerations into a set of manageable actions and selecting the areas in which they want to compete.
- Make use of innovation hubs and grants to collaborate across public and private institutions, to embrace innovative ways of working and disruptive technologies.
- Unlock efficiencies through incentivising better use of resources, including decreasing waste and energy usage.
- Drive social mobility, as well as racial and gender equality, in green sectors by offering accessible educational pathways, including skills programmes and apprenticeships, and increased support for career progression.
Read the full report here and interact with the website here.
Photo by Toa Heftiba on Unsplash