Do Britain’s secondary cities perform better if judged on GVA per head, rather than GVA per worker?

Hamburg: unexpectedly productive. Image: Getty.

The latest instalment of our series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities.

For the last few weeks, I’ve been trawling Centre for Cities’ data to first demonstrate, and then explain, a worrying piece of British exceptionalism. With the exception of London, our big cities are economically much weaker than their peers in France or Germany, Italy or Spain. Birmingham, Manchester, Glasgow and Leeds all have significantly lower productivity, expressed as GVA per worker, than similarly sized cities like Hamburg, Barcelona or Marseille.

Digging through the numbers, I found that they have smaller service sectors; lower numbers of businesses; don’t produce many patents; and have a lot of workers with low skills. I have another theory about what’s gone wrong in Britain – one which, if you’ve ever been to CityMetric before, you can probably guess. But before getting into that I want to address a question a couple of people have asked about the data.

In short, it’s this: is GVA per worker a misleading measure? Since the financial crisis, unemployment in Britain – in contrast to many European nations – has stayed low. GVA per worker is a measure that might flatter cities with higher unemployment, because they have fewer workers relative to their size. Perhaps GVA per head would be a fairer measure – on one which, the implication goes, British cities a more likely to punch their weight.

When someone first threw this argument at me, I was slightly torn, if I’m honest. The measure is clearly limited in its usefulness: taken to extremes, a city with one worker and 999,999 people on the dole could in theory have an enormous GVA per worker, but that doesn’t mean it’s a healthy economy.  

And yet, the thing we’re interested in here is productivity – the rate at which value is produced. To know that, you need to have at least some idea of the amount of work being done – so the number of workers seems a more useful measure than raw population.

That, though, is angels-on-the-head-of-a-pin stuff. We can go beyond that, to actually compare how to two measures work out in practice.

Here’s a scatter graph plotting GVA against population size. You’d expect these to be roughly correlated – more people generate more wealth. But that correlation is obviously not perfect, as some places are richer than others; and generally speaking cities that are further left than you’d expect are underperforming, while those to the right are over-performing:

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You can see that both Milan and Naples are outliers: northern Italy is surprisingly rich, southern Italy surprisingly poor. You can also see that German cities (in black) are generally also more productive than the norm.

But from a British perspective, it’s the position of Birmingham and Manchester that’s most concerning: two big cities that look way less affluent than you’d expect. Indeed, both Hamburg and Munich are significantly smaller – yet also significantly wealthier.

The key question, though, is what does switching from GVA per head do to the rankings? Here are our 19 cities, ordered by GVA per worker:

Click to expand.

And here they are ordered by GVA per head:

Click to expand.

Switching measure does change the rankings, a little. On the per head measure, Seville looks significantly better, going from worst to best performing of the three Spanish cities: that suggests a lower employment rate than in Valencia or Barcelona. And Naples goes from a little way behind the pack to way, way behind which I think suggests a much higher one, although my head is starting to hurt.

At any rate, that suggests that judging cities on GVA per head, rather than GVA per worker, can make a difference.


But it doesn’t change the fact that the British cities are clustered near the bottom. Okay, Glasgow and especially Leeds do rather better on the per head measure than they do on the per worker one. But Birmingham and Manchester still look terrible. Britain's secondary cities are still, as a group, performing worse than those of the other four countries.

To put it bluntly: whichever measure you use, something has clearly gone wrong in Britain's big cities. The only question is what.

Next time, in the final instalment of this mini-series, I’m going to put forward a theory as to what that might be. Until then, why not have a play with the Centre for Cities “Competing with the Continent” database?

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

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Here’s how Henry Ford and IKEA could provide the key to solving the housing crisis

A flatpack house designed by architectural firm Rogers Stirk Harbour and Partners, on display at the Royal Academy, London, in 2013. Image: Getty.

For many people, the housing market is not a welcoming place. The rungs of the property ladder seem to get further and further out of reach. There are loud calls to build hundreds of thousands of new homes (and equally loud demands that they’re not built in anyone’s back yard).

If there was ever a time to introduce mass-produced affordable housing, surely that time is now.

The benefits of mass production have been well known since Henry Ford’s car factories made the Model T back in 1908. It was only made in one colour, black, for economic reasons. Not because it was the cheapest colour of paint, but because it was the colour that dried the quickest.

This allowed the production line to operate at faster, more cost effective, speeds. And ultimately, it meant the product could be sold at a more attractive cost to the customer.

This approach, where processes are tested to achieve increasingly efficient production costs, is yet to filter properly into the construction of houses. This makes sense in a way, as not everybody wants exactly the same type of house.

Historically, affordable mass-produced housing removed a large amount of customisations, to ensure final costs were controlled. But there is another way. Builders and architects have the ability to create housing that allows a level of flexibility and customisation, yet also achieves the goal of affordability.


Back in 2006, the “BoKlok” approach to affordable housing was launched to great acclaim in the UK. Literally translated from Swedish, the term means “live smart”. Originally created from a collaboration between flat-pack favourite IKEA and Swedish construction giant Skanska, the BoKlok housing approach was to allow for selected customisation to maximise individuality and choice for the customers. But at the same time, it ensured that larger house building components were duplicated or mass-produced, to bring down the overall costs.

Standard elements – wall panels, doors, windows – were made in large numbers to bring the elemental costs down. This approach ensured the costs were controlled from the initial sketch ideas through to the final design choices offered to the customers. The kitchens and bathrooms were designed to be flexible in terms of adding additional units. Draw and cupboard fronts interchangeable. Small options that provided flexibility, but did not impact on overall affordability.

It’s a simple approach that has worked very well. More than 10,000 BoKlok houses have now been built, mainly in Norway, Sweden and Denmark, with a small number in the UK.

But it is only part of the architectural equation. The affordable housing market is vital, but the cost of making these homes more adaptable is rarely considered.

Flexibility is key. The needs of a house’s inhabitants change. Families can grow (and shrink) and require more room, so the costs of moving house reappear. One clever response to this, in BoKlok homes, has been to allow “built in” flexibility.

Loft living

This flexibility could include a loft space that already has flooring and a built in cupboard on a lower floor which can be simply dismantled and replaced with a “flat-pack style” staircase that can be purchased and installed with minimal disruption to the existing fabric.

Weeks of builders removing walls, plastering and upheaval are replaced by a trip to the IKEA store to purchase the staircase and the booking of a subcontractor to fit it. The original design accounted for this “future option” and is built into the core of the house.

The best approach to new affordable housing should consider combinations of factors that look at design, materials and processes that have yet to be widely used in the affordable housing market.

And the construction sector needs to look over its shoulder at other market places – especially the one that Henry Ford dominated over a century ago. Today’s car manufacturers offer customised options in everything from colour to wheel size, interior gadgets to different kinds of headlamp. These options have all been accounted for in the construction and costing of each model.

The ConversationThey share a similar design “platform”, and by doing so, considerably reduce the overall cost of the base model. The benefit is quicker production with the added benefit of a cost model that allows for customisation to be included. It is a method the construction sector should adopt to produce housing where quality and affordability live happily together.

David Morton, Associate Professor in Architecture and Built Environment, Northumbria University, Newcastle.

This article was originally published on The Conversation. Read the original article.