‘Globally Competitive Cities’ The Buzzword of the Budget and What it Means for the Levelling Up Agenda

Precisely what the objective and means of regional policy has not always been clear. European regional policy has always considered equity as its goal. The Treasury in an orthodoxy that only changed around 4 years ago saw its role as to encourage growth in high growth areas and then use transfer payments to make improvements to the rest of the country. It did not see its jobs as to redistribute growth, that was seen as a failed approach of the 1960s (office development and all of that) or for a very long time to boost productivity in low growth areas. The has gradually been changing with increasing concern over the ‘productivity puzzle’ of the UKs low productivity and particularly after Brexit which is widely seen on all sides as a revolt of the places left behind or as Andrés Rodríguez-Pose of the LSE put it the revenge of the places that dont matter.

Now they do matter.

the UK government’s most important mission is to unite and level up the country, improving everyday life
for communities throughout the UK and ensuring everyone can succeed regardless of where they live

Build Back Better our Plan for Growth

Though there has been a lot of talk of levelling up there has been until yesterday previous lttle written down and a lack of clarity whether the rationale was equity, productivity or both.

Now it is clearer and the geographic rationale is at least forming. The prime Ministers introduction to Build Back Better

We will level up our country, so the map of our whole United Kingdom is lit up with competitive cities and vibrant towns that are centres of life – places people are proud to call home, with access to the services and the jobs they need
to thrive.

Cities feature several time in particular:

We will tackle geographic disparities in key services and outcomes, like health, education, and jobs; we will support struggling towns so they see social, economic and cultural regeneration; we want every region and nation of the UK to have at least one globally competitive city, acting as hotbeds of innovation and hubs of high value activity;

Lets break this down. The problem – spatial inequities – the solution globally competitive cities acting as hubs for growth.

Then down a tier it mentions towns

Our towns are crucial too – we will ensure that they are places that people are proud to live and raise their families, with
good schools, vibrant high streets, and access to jobs that give everyone a fair chance to achieve their full potential.

There are several references to ‘regnerating struggling towns’

More specifically

We will focus on boosting regional productivity where it is lagging to improve job opportunities and wages.
Our city regions are critical for driving economic growth and long-term prosperity. We want
to achieve dynamic regional economies with high-value centres of excellence. The success of
these are vital to the success of the wider region, including increasing the opportunities available
for the towns and communities surrounding these cities.

Some communities and towns are struggling, from ex-industrial areas to coastal communities. By improving access to services
and the outcomes that matter most for lifechances, they will see social, economic and cultural regeneration.

invest in towns across the UK, connecting people and places to high quality jobs,

Successive governments have sought to address long-standing regional disparities. We will back cities as engines of the UK economy, focusing government action on addressing the barriers to growth. We will build strong, enduring partnerships with local institutions, such as universities, businesses and city leaders to deliver our shared vision of globally competitive regional cities, pulling up prosperity in the wider region.
To achieve this vision, our core cities like Birmingham, Manchester and Glasgow must become well-connected, innovative hubs of
high-value activity. Government intervention can break down the barriers to this, ensuring strong local and regional transport links,
planning policies fit for the future, excellent universities, and a business environment that supports dynamism and inward investment

This at least is the outline of a plan. The solutions seem to fall under heading of investment in infrastructure, core pubic services and skills.

Lets look at why cities power economies.

First there are economies of urban agglomeration – from cities are larger, concentration of labour markets etc.

Second there are economies of industrial agglomeration – classic marshallian distructs, productivity benefits from similar firms being clustered together. These can be achieved in much smaller cities such as Cambridge.

So what regions and nations dont have ‘Globally competitive cities’, it hints that Leeds is but that Birmingham, Manchester and Glasgow are not, clearly Edinburgh is’ . From tables for GDP per head compared to the national average you can get a good idea. But it is crude. Norwich has above the national average but is a sluggard in terms of innovation and connectivity, overly reliant on the public sector. Cities like Newcastle and Liverpool have finally reversed from losing population, but still lag behind. Liverpool however is an engine of small business growth, and on that score Coventry leads the country.

Overall though we primarily have a towns problem rather than a cities problem, with strings of towns around core cities which perform poorly. To best to lift up these towns is the purpose of the new NIC commission, which seems to foreshadow some for of city regional planning as the way ahead. Of course these towns also exist in the South East – particularly to the east of London.

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