What can the next Prime Minister do to help Britain’s cities?

Only one way to settle this... FIGHT! Image: Getty.

After two years of speculation about the future, the Conservative race to be the next Prime Minister is underway. Brexit will be the biggest task the next occupant of Number 10 faces, but closer to home there are many important policy issues – flagging national productivity, stark geographical inequality, the housing affordability crisis, underfunded adult education, creaking social care – that have fallen by the wayside since 2016. Brexit can no longer be the excuse for not addressing these.

Despite warm rhetoric about the need to rebalance the economy, this government has been cooler on the Northern Powerhouse than its predecessor, has stalled on introducing the Shared Prosperity Fund, and the pace of urban devolution has slowed at exactly the same time as Westminster politicians turned their attention away from domestic politics.

The importance of cities in the national political debate has been overlooked lately. Despite this we are an urban nation and cities matter. They account for just 9 per cent of UK land but are home to over half the population, 60 per cent of jobs and 62 per cent of GVA. While Conservative Party’s heartlands may be in the shires and just one contender this evening has an urban constituency, any of those hoping to take up the One Nation mantle needs to have a programme for government that improves the lives of people living and working in cities.

To do this, here is where they should start:

Address local government’s funding problems

In the last decade, cities have shouldered nearly three quarters of all local government funding cuts, despite being home to just 54 per cent of the population. When measured per head, since 2009 people living in cities saw a local government cut of £386 each, compared to just £172 elsewhere in Britain.

These unequal spending cuts have severely hampered the ability of many economically weaker cities to effectively deliver public services and grow their local economies. Added to this, increases in the demand for social care have meant that other services have had to face even deeper cuts.

Some of the leadership candidates have pledged to increase public spending. This needs to apply to the Fair Funding Review for local government. But in addition to more money there are several almost cost free measures that would help cities better deliver public services and grow their economies.

The next Prime Minister should give local authorities more powers to raise and spend money as they see fit, including letting them set multi-year budgets. They should also find a long-term solution to our social care crisis as the current system is unsustainable.

Build homes where they are needed

The housing crisis is one of the biggest domestic challenges that this country faces. There is now rightly a political consensus that we must build more housing and the government has set itself an ambitious target to build 300,000 new homes each year. I would be surprised if any leadership contender reneged on this goal.

But contrary to popular belief, we do not have a national housing supply crisis; supply in many parts of the country is more than able to keep up with demand. It’s in places where demand is high and increasing, many of which are in the Greater South East, where supply has been unable to respond to demand, and in fact has actively restricted the provision of new homes by giving undue weight to the concerns of existing homeowners.

To ensure that housing supply meets demand in popular areas, the next Prime Minister should reform the planning system and introduce a flexible zoning system based on the Japanese system. They should also stop inflating demand by subsidising homeownership through government initiatives like Help to Buy. These policies only raise prices, increasing the wealth of existing homeowners and further pushing up rental costs in already expensive cities.

This shift is likely to be a difficult pill to swallow for a party that holds property ownership as a central tenet of its philosophy. Yet homeownership as a share of private housing has declined in every city since 1981. The next Prime Minister should recognise that buying is now an unattainable goal for many people and do more to ensure there is a ready supply of secure rented homes in places where people want to live.

Improve transport connections within cities

Politicians find it hard to resist the allure of the hard hat and hi-vis jacket that accompany any big infrastructure project.

The transport policy focus in recent years has reflected this. HS2, Northern Powerhouse Rail, and a third runway at Heathrow all aim to improve connections between cities, either in Britain or internationally. But this focus risks misunderstanding the reality of everyday travel for most people.

Some 50 per cent of people live in one local authority but work in another. But more than 75 per cent live and work within the same city region. So people are travelling to work but the vast majority are not travelling long distances.

The reality that the vast majority of people live and work within their home city-region, rather than commuting between them, should inform the new Prime Minister’s transport policy. Investment in local transport to efficiently take commuters from the suburbs to the city centre should be priority.

On a practical level this means improving buses and suburban and light rail connections, encouraging cities to exercise their powers over their local transport networks and implementing TfL-style integration on the network.

Minimise trading barriers with the EU

Sadly I cannot finish a blog on priorities for the next Prime Minister without mentioning the B- word. Like the country as a whole, Britain’s cities are overwhelmingly dependent on the EU for trade. It is the largest export market for every British city.

Cities generate 77 per cent of Britain’s total services exports, and over half of these go to the European Union.  London, Edinburgh and Cardiff would be among the biggest losers should Britain leave the EU without a comprehensive deal which includes services.

The next Prime Minister should be mindful of the importance of the EU to the livelihoods of people living in Britain’s cities – a majority of the country’s population – and ensure that any future Brexit deal keeps trade with the continent in both goods and services as frictionless as possible.


This leadership contest is particularly interesting for those of us focused on urban policy; it may well be the first one in British history in which a politician goes from a city hall to Downing Street – potentially setting a precedent for aspiring future prime ministers.

Irrespective of who triumphs on the BBC tonight, and who goes on to win this contest, the next Prime Minister has a big in-tray waiting for them – and Brexit is just the start.

Andrew Carter is chief executive of the think tank Centre for Cities, on whose blog this article previously appeared.

 
 
 
 

To see how a city embraces remote work, just look to Helsinki

A deeply rooted culture of trust is crucial to the success of remote work. (Sean Gallup/Getty Images)

When I speak to Anssi Salminen, an account manager who lives an hour outside Helsinki, he’s working from a wooden platform on the edge of a Finnish lake. With a blanket laid out and his laptop set up, the sun low in the sky, Anssi’s remote work arrangement seems blissful. 

“I spend around half of my time working somewhere else other than the office,” he says. “I can work from home, or on the go, and I also travel to the Netherlands once a month and work from there.

“The emphasis in my work has always been that it doesn’t matter when or where I work, as long as I get things done.”

For many people around the world, the shift to remote work was sudden, sparked by the coronavirus pandemic. Finland, however, is finding the transition much less significant. Before Covid-19, the Nordic nation already displayed impressive levels of remote working, with 14.1% of its workforce reporting usually working from home. Only the Netherlands has a comparable percentage of remote workers, while the UK lagged behind at 4.7%, and the US’s remote workforce lingered at around 3.6%

Anssi works for one of many Helsinki-based companies that offers its employees flexible policies around when and where they work. That arrangement is in part due to the Finnish capital’s thriving start-up scene. In spite of being a relatively small city by global standards it is home to over 500 technology start-ups. These companies are leading the way when it comes to keeping employees connected wherever they choose to work.

“Our company has a completely location-free working policy,” says Kasper Pöyry, the CEO of Helsinki-headquartered software company Gapps. “All meetings are made available for online participants and facilitated accordingly. Some employees have worked extensively from abroad on a working holiday, whilst others prefer the comfort and social aspects of the well-stocked office. Whatever works for our employees is what works for the company.”

Like Gapps, many Helsinki-based firms are deeply preoccupied with providing the necessary technology to attract talent in a vast and sparsely populated country. Finland has only 15 inhabitants per square kilometre, and companies understand that in order to compose teams of specialised expertise, they may have to seek talent outside of the city. Local governments take a similarly proactive stance toward technological access, and Helsinki offers free, unrestricted, high-speed Wi-Fi from city-wide hotspots, while the country as a whole boasts some of the best coverage in Europe. 

But encouraging remote work isn’t just about optimising the potential of Finland’s workforce – companies in Helsinki also recognise that flexibility has clear benefits for both staff and employees. 

“The idea of a good work-life balance is ingrained in Finnish culture,” says Johannes Anttila, a consultant at organisational think tank Demos Helsinki. “It goes back to our rich history of social dialogue between labour unions and employers, but also to an interest in delineating the rules of working life and pushing towards people being able to enjoy their private life. Helsinki has been named the best city in the world for work-life balance, and I think that this underlies a lot of the mentality around remote work.” 

For Peter Seenan, the extent to which Helsinki residents value their free time and prioritise a work-life balance prompted his move to the city ten years ago. He now works for Finnair, and points to Finland’s summer cottages as an example of how important taking time to switch off is for people in the country. These rural residences, where city residents regularly uproot to enjoy the Nordic countryside, are so embedded in Finnish life that the country boasts around 1.8 million of them for its 5.5 million residents

“Flexible and remote work are very important to me because it means that I don’t feel like I’m getting stuck in a routine that I can’t control easily,” he says. “When I’m working outside of the office I’ll go down to my local sauna and go ice swimming during the working day, typically at lunchtime or mid-morning, and I’ll feel rejuvenated afterwards… In winter time especially, flexibility is important because it makes it easier to go outside during daylight hours. It’s certainly beneficial for my physical and mental health, and as a result my productivity improves.”

The relaxed attitude to working location seems to pay off – Finland is regularly named the happiest country in the world, scoring highly on measures such as how often its residents exercise and how much leisure time they enjoy. With large swathes of unspoiled countryside and a national obsession with the outdoors, sustainability is at the forefront of its inhabitants’ minds, leading to high levels of support for measures to limit commuting. In January, Finland passed a new Working Hours Act, the goal of which was to help better coordinate employee’s work and leisure time. Central to this is cementing in law that employees can independently decide how, when, and where they work.

Yet enacting the new ruling is not as simple as just sending employees home with their laptops. For Kirsimarja Blomqvist, a professor of knowledge management at LUT University, perhaps the most fundamental feature that remote work relies upon is a deeply rooted culture of trust, which Helsinki’s residents speak of with pride. The anecdotal evidence is backed up by data which suggests that Finland boasts one of the highest levels of trust and social cohesion in Europe, and equality and transparency have always been key cornerstones of political thought in the country.

“Trust is part of a national culture in Finland – it’s important and people value it highly,” she explains. “There’s good job independence, and people are valued in terms of what they do, not how many hours they work for. Organisations tend to be non-hierarchical, and there is a rich history of cooperation between trade unions, employers, and employees to set up innovative working practices and make workers feel trusted and valued. 

“It’s now important that we ensure that this trust can continue to be built over technology, when workers might have been more used to building it face-to-face.”

As companies begin to look hopefully toward a post-Covid future, the complexities of remote work are apparent. Yet amid issues of privacy, presenteeism, and social isolation, the Helsinki model demonstrates the potential benefits of a distanced working world. The adjustment to remote work, if continued after the crisis, offers a chance to improve companies’ geographical diversity and for employers to demonstrate trust in their workforce. On these issues, Blomqvist believes other cities and employers can learn a lot from Helsinki.

“People are now beginning to return to their workplaces, but even as they do they are starting to consider the crisis as a jumping point to an even more remote future,” she says. “The coronavirus pandemic has been an eye-opener, and people are now interested in learning from Finland’s good practices… We are able to see the opportunity, and the rapid transition to remote work will allow other countries to do the same.”