For a balanced recovery, cities need more powers to drive growth

At last the UK economy appears to be recovering from the deepest peacetime recession in the last 100 years. The Chancellor made much of this in last month’s Autumn Statement, announcing that there have been three private sector jobs created for every public sector job lost. But as the seventh edition of Cities Outlook shows, this recovery is not being felt everywhere.

London has been the primary driver of the recovery to date. Between 2010 and 2012, the capital accounted for 79% of all net new private sector jobs created. Other cities have performed strongly too – Edinburgh, Manchester and Liverpool all saw significant jobs growth, but others, such as Bradford and Sheffield, have continued to lose jobs, despite the national economic recovery.

This means that there is a real risk that the recovery will be unbalanced, just as the recession was before it, and indeed the decade of growth was before that.

Overall, London is continuing to pull away from the rest of the country, although this isn’t a new phenomenon. The Capital’s dominance over the rest of the UK economy has caused consternation for many years – a royal commission as far back as 1940 recommended that London’s growth be constrained.

But London’s strong performance is good for the country – it is home to over 5 million jobs and attracts investment from around the world. It is the UK’s greatest urban success story.

So the big focus for politicians and decision makers should not be constraining London’s success, but rather how do we make more of our other cities, from Cambridge (the most innovative city in the UK) to Derby (with its strengths in manufacturing) or Brighton (in the top three for start-ups).

And we need to make the most of our next largest cities too, which account for over a quarter of the UK’s Gross Value Added, but could contribute much more. Currently only Bristol consistently outperforms the national average on a range of important economic indicators from new business starts to skills levels.

City deals have started to change the balance of power, allowing cities to bend some polities to address their specific challenges but more needs to be done. For cities to be able to effectively respond to their individual strengths and weaknesses, they need more freedom to be able to adapt national policy for their area.

We have already seen policy powers handed to Wales, while Scotland is likely to see greater devolution whatever the outcome of this year’s independence vote. But despite having economies larger than the entirety of Wales, Greater Manchester and Greater Leeds have comparatively little flexibility to adapt policy to their specific challenges.

If we want these cities to play a larger role in the national economy, then they have to be given the tools to grow their economies and respond to the distinctive local circumstances that this year’s Outlook so clearly illustrates.

Alexandra Jones is Chief Executive of Centre for Cities