Britain's debate on social mobility is stuck. It's time for a city perspective

Manchester is the heart of the Northern Powerhouse – but it retains areas of intense deprivation. Image: Getty.

Social mobility plays a curious and sometimes tortuous role in our national political psyche.  We love talking about it, even if we can’t, or won’t, do much about it.

Greater mobility is a goal lionised by all politicians – along with the NHS it’s perhaps the closest thing to a secular faith that you will find at Westminster.  Our media lap up story after story on it. And research on the issue has undergone a mini-boom in our top universities, dominating the work of some of our finest scholars over the last decade or so.

Yet for all this attention there is a disheartening rhythm to much of the policy debate. Every time a gloomy report is published, saloon-bar solutions to our social mobility challenge are trotted out and treated seriously contrary to all evidence (think “grammar schools”). The fact that the key data underpinning most of this work is very dated (relating to those born in 1970) rarely features. Complex and broad questions about the distribution of opportunity across society get shrunk into the issue of the precise number of talented but poor children who manage – or not – to get into Oxbridge. 

There is also a steady predictability to the findings produced by study after study showing that the UK is an international laggard: relative to their better-off peers, poor children have the odds stacked more steeply against them in the UK than in most other advanced nations. Indeed the language of social immobility has gathered currency, with more references to “class ceilings” and the “Great Gatsby curve” (illustrating that high-inequality societies become low-mobility ones) among the media and policy-makers.


Sometimes this breeds a weary sense of policy-fatalism. Seasoned observers highlight, with some justification, that because national levels of mobility appear to be shaped by deep forces – the occupational structure of the jobs market and technological change – they can only altered by major economic transformation or massive social upheaval. The implication is that we should find something slightly more tractable to worry about.

Despite all the analysis there is much that we don’t know that might help open up the policy debate in a more productive way. Ask for a view of how social mobility across the generations varies between say London, Glasgow and Manchester and you will be met with silence.

Sure, we know all sorts of things about school performance, wages, jobs, access to university, life-expectancy and how they vary across urban areas. But hard evidence of the extent to which economic opportunity gets transmitted from one generation to the next, in one city compared to another? It doesn’t exist.

Which is why it’s refreshing that a new body of research jolts us into opening our minds to exactly this question. It comes in the form of a path-breaking body of US research from Raj Chetty and colleagues at Harvard and Stanford that demonstrates the enormous variation in levels of intergenerational social mobility that exists across US cities. Rather than lament national failure it invites us to explore the causes of city-level differences.

The motherlode

The work is a “big data” research project that tracks the economic trajectories of a staggering 40m children – in social research terms, this is akin to discovering the Ark.  It allows an entirely new map of uneven opportunity in contemporary America to be drawn and studied.

It’s widely known that, contra the national myth of the American Dream, the US has shockingly low levels of social mobility. But hitherto no one would have realised that the poor child in, say, Seattle, Salt Lake City or San Francisco has similar rates of upward mobility to a poor child in a high-mobility poster-boy country like Denmark.

Nor do the differences fit into easy caricatures. Why does a working-class child from Seattle have a similar chance of growing up to lead a middle-class life as a middle-class kid in Atlanta? (Both are booming cities.) Why does Pittsburgh so outperform nearby Cleveland? The variations are huge:  poor children have almost three times more chance of making it into high income households as adults in some cities compared to others.

Chetty believes his research can account for the great majority of this variation. Some of the answers don’t translate to the UK: race is a major factor in the US whereas in the UK the story is more nuanced (for instance, poor white children do least well; whereas those from BEM backgrounds are disadvantaged in terms of how their qualifications are translated into wages).

But some of the most powerful findings are suggestive for us. Social segregation of the poor due to patterns of housing has a strongly negative effect on mobility, as does long commute times. High levels of overall income inequality in an urban area are a big drag on mobility. But, interestingly, the position of the top 1 per cent makes little difference: that points to the conclusion that it may be the relative position of the middle class that is pivotal in permitting more upward progression, rather than what is happening to the run-away elite at the very top.

Measures of school performance matter greatly and the evidence suggests that the pivotal years in determining prospects for mobility occur when children are relatively young. Levels of social capital – local civic engagement as well as religious participation – also stand out as being important, as does family structure.

Perhaps some of our cities are quietly generating Scandinavian levels of mobility without us knowing

What can we say about social mobility and cities in the UK? Excellent research has been undertaken (as I’ve highlighted here before) on how the class attainment gap in London’s schools has been dramatically reduced over a generation (though we don’t know the extent to which these big strides will translate into future earnings). And the Sutton Trust have produced an innovative and revealing map showing the variation in performance of disadvantaged children in every (English) parliamentary constituency.

We also know that, if we look at earnings mobility, where you live makes a big difference. Those in London have a far greater chance of advancing up the pay ladder compared to people in other regions– even after we take account of skill levels, occupational mix and other factors – and this effect became much stronger in the 2000s compared to the 1990s. Against this, it would be surprising if London’s staggering levels of inequality in income and wealth compared to other parts of the UK, together with its dysfunctional housing market, didn’t act as a heavy anchor on mobility across the generations.

Studies of social mobility repeatedly suggest that geography matters. In the UK, as with other countries, there are powerful “neighbourhood effects” at work that shape the odds facing disadvantaged kids over and above all their family specific  factors like parental class, income and education.

Earlier this month, new work by the LSE showed that, even after fully taking account of family circumstances and school intake, it was still the case that coming from a neighbourhood characterised by high levels of child poverty was closely linked to a strongly negative impact on educational outcomes.  How a given level of poverty is distributed across an urban area appears to matter greatly to child opportunity.

The limits

These partial insights, however, only take us so far. At one level our knowledge gap about cities and much else simply reflects the fact that it’s not been possible to link up major data sets (including from HMRC) in the UK in the way that other countries have done: a sure case of the need for greater data-activism.

But, at a deeper level, it also mirrors our political culture. Take part in a debate on social mobility and you will – not surprisingly – find yourself discussing familiar national themes: private schools and the demise of grammars, the rise of financial services and decline of manufacturing, mass expansion of higher education, and the role of the welfare state. But a granular discussion about alternative strategies for city-development? Unlikely.


Yet the context for social mobility may well be shaped – more than we realise – below the level of the nation state. Perhaps some of our cities are quietly generating Scandinavian levels of mobility without us knowing; or maybe the smaller, more centralised nature of the UK means they’re all much the same.

It would, however, be highly surprising if there weren’t unlearnt lessons. Decisions about housing supply and mix, land use, transport infrastructure and commute times, migrant settlement and integration, models of school improvement, the transition from education to employment, and the design of shared civic spaces and services may well count for more than we think. Powers over these issues, together with the revenue base needed to underpin them, should form at least part of our national conversation about equity and opportunity (alongside regional economic growth).

It is a feature of our times that, despite strong headwinds, our leading cities believe they have more agency to shape their economic plight than has been the case for some time. As more powerful leaders emerge across our city-regions over the next few years they could also help breathe some new life into our national debate on social mobility. It would be useful if they had some research to guide them.

Gavin Kelly is chief executive of the Resolution Foundation.

This piece was written for an event on “Social Mobility and the future city” at the 2015 Festival of Ideas  

 
 
 
 

What do new business rates pilots tell us about government’s appetite for devolution?

Sheffield Town Hall, 1897. Image: Hulton Archive/Getty.

There have been big question marks about any future devolution of business rates ever since the last general election stopped the legislation in its tracks.

Not only did it not make its way to the statute book before the pre-election cut off, it was nowhere to be seen in the Queen’s Speech, suggesting the Government had gone cold on the idea. (This scenario was complicated further recently by the introduction of a private members’ bill on business rates by Conservative MP Peter Bone, details of which remain scarce.)

However, regardless of the situation with legislation, the government’s announcement in recent days of a pilot phase of reforms suggests that business rates devolution will go ahead after all. DCLG has invited local authorities to take part in a pilot scheme which will allow volunteer authorities to retain 100 per cent of the business rates growth they generate locally. (It also notes that a further three pilots are currently in operation as they were set up under the last government.)

There are two interesting things in this announcement that give some insight on how the government would like to push the reform forward.

The first is that only authorities that come forward with their neighbours with a proposal to pool all business rates raised into one pot across a wider geography will be considered. This suggests that pooling is likely to be strongly encouraged under the new system, even more considering that the initial position was to give power to the Secretary of State to form pools unilaterally.

The second is that pooled authorities are given free rein to propose their own local arrangements. This includes determining, where applicable, a tier split (i.e. rates distribution between districts and counties), a plan for distributing additional growth across the pool, and how this will be managed between authorities.

It’s the second which is most interesting. Although current pools already have the ability to decide for some of their arrangements, it’s fair to say that the Theresa May-led government has been much less bullish on devolution than George Osborne in particular was, with policies having a much greater ‘top down’ feel to them (for example, the Industrial Strategy) rather than a move towards giving places the tools they need to support economic growth in their areas. So the decision to allow local authorities to come up with proposed arrangements feels like a change in approach from the centre.


Of course, the point of a pilot is to test different arrangements, and the outcomes of this experiment will be used to shape any future reform of the business rates system. Given the complexity of the system and the multitude of options for reform, this seems like a sensible approach to take. But it remains to be seen whether the complex reform of a national system can be led from the bottom up. In effect, making sure this local governance is driven by common growth objectives, rather than individual authorities’ interests, will be essential.

Nonetheless, the government’s reaffirmation of its commitment to business rates to devolution and its willingness to test new approaches is welcome. Given that the UK is one of the most centralised countries in the western world, moves to allow local authorities to keep at least some of the tax revenue that is generated in their area is a step forward in giving places more autonomy over how they spend their money. That interest in changing this appears to have been whetted once more is encouraging.

There are, however, a number of other issues with the current business rates system which need to be ironed out. Centre for Cities is currently working on a briefing of the business rates system, building on our previous work in this area, and we’ll be making suggestions as to how the system can be improved.

Hugo Bessis is a researcher for the Centre for Cities, on whose blog this article originally appeared.

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