Every regional spatial plan of course has an underlying transport plan and economic plan.
Previously the view of the UK Treasury on spatial economics was clear.
Theory and evidence suggests that allowing regional concentration of economic activity will increase national growth. As long as economies of scale, knowledge spillovers and a local pool of skilled labour result in productivity gains that outweigh congestion costs, the economy will benefit from agglomeration… policies that aim to spread growth amongst
regions are running counter to the natural growth process and are difficult to justify on efficiency grounds, unless significant congestion costs exist (HM Treasury 2007: Regional disparities and growth in Europe, Mimeo (author C Lees)
The UK government since the Blair years has been strongly influenced by the New Economic Geography and the New Urban Economics.
the focus is very much on the benefits and advantages that accrue from the density of activity and population within cities: density is claimed to increase interaction, spill-overs, market opportunities, productivity and wages. Particular emphasis is put on the agglomeration of human capital: a city’s success depends on having a highly skilled and well-educated workforce, and the more successful is a city (in terms of high wages, high productivity and so on) the more it will be a magnet in attracting such workers. Agglomeration again plays a central role, as a source of key increasing returns and external economies effects that raise the productive performance of firms and workers in a city and its hinterland. Furthermore, ..theorists view the spatial agglomeration of economic activity primarily as a market-led process, the outcome of the spatial ‘sorting’ of rational and highly mobile workers in possession of perfect information towards the more productive, higher-wage city-regions. The argument is that once ‘individual’ effects (such as the education, skill and occupation) of workers are ‘controlled’ for, ‘place’ effects are negligible, and real spatial economic disparities (in real product wages for example) all but disappear.
Spatially Rebalancing the UK Economy RSA 2015
In this view the result of this spatial sorting was a good thing. More high growth cities was a good thing. Decline of low growth towns on the periphery was not necessarily a bad thing.
This began to be challenged after the global financial crisis.
David Cameron gave a speech in 2010
Our economy has become more and more unbalanced, with our fortunes hitched to a few industries in one corner of the country, while we let other sectors like manufacturing slide.
Today our economy is heavily reliant on just a few industries and a few regions – particularly London and the South East. This really matters. An economy with such a narrow foundation for growth is fundamentally unstable and wasteful – because we are not making use of the talent out there in all parts of our United Kingdom. We are determined that should change. That doesn’t mean picking winners but it does mean supporting growing industries – aerospace, pharmaceuticals, high-value manufacturing, hi-tech engineering, and low carbontechnology. And all the knowledge-based businesses including the creative industries. And it doesn’t mean ignoring London…but it does mean having a plan to breathe economic life into the towns and cities outside the M25
Cameron, D. (2010) Transforming the British economy: Coalition strategy for economic growth, Transcript of
Speech, Prime Minister’s Office.
The prime minister will reportedly promise to bring jobs and skills to “red wall” areas so people no longer have to leave their home towns in search of prosperity.
Boris Johnson is expected to make the vow in the Queen’s speech as a gesture to the voters who helped his party to election victory over the weekend.
The Sunday Times reported that the pledge to “live local and prosper” will be a centrepiece of the speech.
Clearly the approach to be taken in regional spatial planning has to reflect the view of what is possible in terms of unlocking spatial economic potential. One can detect three epochs.
- The Barlow Report Age; which viewed congestion and regional economic depression as two sides of the same coin. You could move jobs and people around the map by government dicdat.
- The ‘New Regional Policy’ Age; formed from the impact and value for money of the Barlow approach having become discredited. Growing areas should grow, restrictions on density should be lifted, congestion fixed by transport investment, people expected to move to where jobs are. Inward migration to ‘jobs led’ growth to be facilitated.
- The Leveling Up Age: A focus on left behind areas. People upskilled so migration is less important. A focus on improving transport connections to rings of depressed towns around cities, such as restoring lost railway lines.
What kind of spatial plan does the new age demand. Clearly the paradigm shift occurred because of doubts over the hegemony of economic thinking of the previous age. For example in recent years there has been considerable doubts over whether some regions are really inherently more productive than others. For example a 2019 report by Sheffield Hallam (Fothergill and Batty)
Regional policy, to the limited extent that it currently exists, has involved encouraging regional hubs in the hope that they will pull up the struggling towns on their peripheries. Current thinking is that there is not a lot of point trying to encourage firms to relocate to places such as Blackpool because they are less efficient than the big conurbations.
This notion, according to a new piece of research from Steve Fothergill and Tina Beatty of Sheffield Hallam University, is actually completely wrong. Once the official data for regional economic performance is broken down there is virtually no difference in economic efficiency between workers in one region and another, and workers in cities are no more efficient than workers in towns.
Is it really possible that a doctor in London is three times as productive as a doctor in Merthyr Tydfil or that it takes three times as long for the Cornish lawyer to do the conveyancing on a house as it does for the one in Camden? Fothergill and Beatty’s research suggests there really is no real gap to speak of.
They come to this conclusion by gradually stripping away various elements of GVA per capita. An adjustment is made to divide GVA by the number of people of working age (16-64) rather than the population as a whole. Account is taken of the fact that employment rates among the working-age population are higher in some parts of the country than others because of the number of students or those on disability benefits.
Commuting makes a difference because the number of jobs in each area is not necessarily the same as the number of residents in work. Larry Elliot Observer 21st June 2019
So its simple right, encourage people to stay and the working age population rises, encourage people to commute they become more productive – simple right?
No, though Fothergill and Batty rightly question the explanative power of productivity alone it does not explain why working age people leave and why when people commute to jobs those jobs are located in high growth cities. What it does suggest is that the focus on productivity should switch to a good old fashioned focus on jobs and the geography of job creation and industrial relocation.
What kind of regional spatial planning approach does this suggest? Clearly since COVID and the zoomification of the workforce there is much more flexibility in where knowledge workers can work. This will give a boost to housing growth in satellite towns even those with previously weak housing markets. More housing can be allocated in these places. Growth in cities has been most successful in driving rents down for young people where it has been done in large volumes. High density apartments will still play an important role in city centres, using up vacated office, retail and industrial space. Knowledge clusters will still be essential, growth needs to take place around existing clusters constrained by housing growth but there need to be national programmes to set up satellite campuses and science parks for the fastest growing industries in left behind areas. The growth in renewables for example in Teeside is not the public sector rowing against the realities if economic geography but going with a new tide.
Arguably also there is a new potential for a New Regional Planning. This new approach will require constellations of well connected towns to well connected cities, and a reordering of employment space away from tired old industrial spaces in large cities, which are a poor use of land, towards modern well connected spaces for new industries and logistics located in towns with good transport connections. This cant be done without regional spatial planning, especially with the new demands of zero carbon strategies.
It also requires rethinking planning methods, such as the ‘standard method’ for housing that are stuck in the past epoch. This for example projects forward the current state and assumes national distribution of migration to match, it takes no account whatsover of how future jobs will shift with changes of population. So for example a new settlement is needed because of the current needs of existing settlement, no modelling is done of how a news settlement will create jobs in its own local service sector and creates its own clusters and aggolmerations, and hence further draw in people to fill those jobs. It is an entirely static method.