Four maps showing Britain’s economic divides

What you are about to read is quite depressing in places, so here are some kittens. 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. 

The time has come, the writer said, to talk of many things – of wages, jobs and housing costs, and ideally at this point there’d be something that rhymed with “things” but I can’t find one and to be quite honest with you I’m not going to dwell.

Yes, it’s that time again. Those nice people at the Centre for Cities have produced a bunch of maps showing the stats on Britain’s cities. Now it’s my turn to spend rather too long pontificating about them.

These particular maps come from this year’s Cities Outlook report, and are headed, as a set, “the economic divides across urban Britain”. Let’s have at it.

Map the first: welfare spending

Click to expand.

First up, this one’s welfare spend per head – basically, a measure of how dependent a cities’ residents are on government support. As with all these maps, darker greens mean higher numbers.

If you’ve ever looked at any map showing the economics of Britain’s cities, then this is probably a pretty familiar pattern. Welfare spend is lowest to the immediate north, south and west of London, representing an arc of prosperity that stretches from the capital to Oxford, Cambridge and Bristol. 

A few other cities are have low welfare spend, too: Aberdeen, Edinburgh, Exeter, York. But these are more isolated cases. Generally speaking the Midlands and counties to the east of London have higher welfare spending, suggesting the local economies are not providing for residents’ living costs – while the north of England is a sea of dark green, suggesting the highest welfare spending of all. While talk of a north-south divide is an over-simplification, it is, broadly speaking, accurate.

One other notable phenomenon on this map: seaside cities tend to come out worse. Often these are port cities, which have been hit particularly hard by the decline of ship-building and the automation of the ports themselves. (Liverpool, for example, is handling more cargo than ever, but needs a fraction of the workers to do it.) In a few other cases like Worthing or Bournemouth, though, I suspect the high welfare spend reflects the presence of a lot of retirees.

Map the second: wages

This time, the colour-scheme is reversed – high wages, unlike high welfare spend, are a mark of economic strength – but it’s broadly the same geography as we saw above. London, its commuter belt, the university cities and Milton Keynes have the highest wages. The Midlands and the north are much more mixed. 

Click to expand.

There are cities in the M62 corridor, from Liverpool to Hull, that are doing better than others. Warrington – the Milton Keynes of the north, as nobody calls it even though they should – is positively booming. In Derby, average wages are pulled up by high-value manufacturing; in Leeds, by finance; in York by, well, I’m not sure exactly, but York is generally pretty posh. 

In most of the cities around them, though, wages are clearly much lower. Just look at the gap between York and Hull.

There are also signs of the agglomeration effect, in which wages are generally higher in big metropolitan areas than in the smaller cities in their orbit. Compare London to Crawley or Luton; Newcastle to Sunderland; or Manchester and Leeds to the other northern belt cities. Liverpool, alas, seems to be an exception.

There’s one other odd thing here: Exeter has quite low wages despite also having a low welfare bill. That, to me, suggests it’s a relatively cheap place to live.

Map the third: employment rates

This is where things get more complicated.

Click to expand.

The cities with the highest employment rates include Worthing, Swindon and Crawley, all fairly thriving cities in the orbit of London. But the next tier down includes many cities in the north which, in the 21st century, are not generally associated with prosperity: Wigan, Preston, Burnley.

Meanwhile, Basildon and Luton are much lower down the league tables despite being closer to London, and even the capital itself is only mid table. As for Birmingham, despite all the talk of a ‘Midlands engine’, it has one of the worst employment rates in Britain.

In Scotland, you can see the usual division between rich (Edinburgh, Aberdeen) and poor (Glasgow, Dundee) – but even the richer cities are doing that well. Over in Wales, meanwhile, struggling Newport has a higher employment rate than thriving Cardiff.

Generally, a city with a low employment rate will be struggling economically – but not all cities with high employment rates will boom. I suspect that what this shows is that a job isn’t everything. Some jobs are not worth very much – and we should stop pretending employment automatically leads to prosperity.

Map the fourth: housing affordability

And so at last we see the downside of living in a boom town. The housing affordability ratio represents the multiple of the average wage you’d need to buy the average house. Generally, if you want young people to have a decent start in life, you’d want this to be low.

Reader, it will stun you to learn that in many places, it isn’t.

Click to expand.

Housing is least affordable in many of those cities doing best on some of the other measures – London, Oxford, Cambridge. Even though wages there are higher, housing costs are, relatively, higher still – because a booming economy in a constrained housing market will tend to push up prices. 

The north/south divide is clearest of all here: the further from London you go, the cheaper housing becomes. The Essex town of Basildon is unlikely to top any newspaper list of property hot spots – but because it’s within a 40 minute commute of the City of London, houses there are expensive relative to wages. More so even than York, by far the least affordable city in the north.

It’s a reminder that many cities are struggling to build enough houses – and that the housing and jobs crises are two sides of the same coin.


And another thing

One last point to wrap up. There is an enormous divide in some of these figures. The figures for the city with the highest weekly resident wages (£679) is more than one a half times that of the lowest (£399). The highest welfare per capita (£4,348) is more than twice that of the lowest (£2,105), while the housing affordability ratio varies by a factor of over four (from 4.2 to 17.3).

The one exception to this pattern seems to be the employment rate, which ‘only’ varies between 64.1 and 86.6 per cent. Flip that around, though, and think of the proportion of the population being economically inactive – between 13.4 and 35.9 per cent – and the gap is huge once again. Britain doesn’t suffer from an economic divide. It suffers from an economic chasm.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites

Want more of this stuff? Follow CityMetric on Twitter or Facebook

 
 
 
 

What's actually in the UK government’s bailout package for Transport for London?

Wood Green Underground station, north London. Image: Getty.

On 14 May, hours before London’s transport authority ran out of money, the British government agreed to a financial rescue package. Many details of that bailout – its size, the fact it was roughly two-thirds cash and one-third loan, many conditions attached – have been known about for weeks. 

But the information was filtered through spokespeople, because the exact terms of the deal had not been published. This was clearly a source of frustration for London’s mayor Sadiq Khan, who stood to take the political heat for some of the ensuing cuts (to free travel for the old or young, say), but had no way of backing up his contention that the British government made him do it.

That changed Tuesday when Transport for London published this month's board papers, which include a copy of the letter in which transport secretary Grant Shapps sets out the exact terms of the bailout deal. You can read the whole thing here, if you’re so minded, but here are the three big things revealed in the new disclosure.

Firstly, there’s some flexibility in the size of the deal. The bailout was reported to be worth £1.6 billion, significantly less than the £1.9 billion that TfL wanted. In his letter, Shapps spells it out: “To the extent that the actual funding shortfall is greater or lesser than £1.6bn then the amount of Extraordinary Grant and TfL borrowing will increase pro rata, up to a maximum of £1.9bn in aggregate or reduce pro rata accordingly”. 

To put that in English, London’s transport network will not be grinding to a halt because the government didn’t believe TfL about how much money it would need. Up to a point, the money will be available without further negotiations.

The second big takeaway from these board papers is that negotiations will be going on anyway. This bail out is meant to keep TfL rolling until 17 October; but because the agency gets around three-quarters of its revenues from fares, and because the pandemic means fares are likely to be depressed for the foreseeable future, it’s not clear what is meant to happen after that. Social distancing, the board papers note, means that the network will only be able to handle 13 to 20% of normal passenger numbers, even when every service is running.


Shapps’ letter doesn’t answer this question, but it does at least give a sense of when an answer may be forthcoming. It promises “an immediate and broad ranging government-led review of TfL’s future financial position and future financial structure”, which will publish detailed recommendations by the end of August. That will take in fares, operating efficiencies, capital expenditure, “the current fiscal devolution arrangements” – basically, everything. 

The third thing we leaned from that letter is that, to the first approximation, every change to London’s transport policy that is now being rushed through was an explicit condition of this deal. Segregated cycle lanes, pavement extensions and road closures? All in there. So are the suspension of free travel for people under 18, or free peak-hours travel for those over 60. So are increases in the level of the congestion charge.

Many of these changes may be unpopular, but we now know they are not being embraced by London’s mayor entirely on their own merit: They’re being pushed by the Department of Transport as a condition of receiving the bailout. No wonder Khan was miffed that the latter hadn’t been published.

Jonn Elledge was founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.