The cities of southern England are undergoing a population boom

Milton Keynes: filling up. Image: Google.

Today, the Centre for Cities publishes the latest instalment of its annual Cities Outlook report. It drills down into the performance of Britain’s 64 largest cities over the last decade: a time of boom, bust, recovery and two governments of three different colours. 

One of the primary indicators we use for measuring the success of a city’s economy is population growth – and the story we see during this time is rather alarming, if not entirely surprising.

Over the decade to 2013, cities in the South grew at double the rate of cities elsewhere in the UK. Combined, the cities of the South had 11.3 per cent more people living in them in 2013 than in 2004, compared to 5.5 per cent for cities elsewhere in the UK. 

Click to expand. Source: Cities Outlook 2015.

Milton Keynes, Peterborough and Swindon were the top performers on population growth, experiencing increases at double the rate of the national average. But while their performance was very similar on this measure, there were interesting differences between the cities when looking at other markers of economic performance.

Milton Keynes is the stand-out performer on most of the fundamentals. Its strong population growth – it had 36,000 more people living in the city in 2013 compared to 2004 – has been matched by a large increase in the number of businesses and jobs in the city. Its overall jobs growth of 18 per cent makes it the fastest expanding city over the last decade. The challenge for the city over the next decade is to continue to support the economy with its pro-growth attitude, making sure that the rise in population is matched with a rise in new homes.


You can see an opposing trend at work in Swindon. While there was a large increase in the number of businesses to match the increase in its population, it had fewer jobs in 2013 than it did in 2004, seeing a decline of around 7,000 posts. 

Two things appear to be happening here. Firstly, Swindon’s economy appears to be shifting rapidly to a greater focus on small and medium-sized businesses; it’s a trend which follows the closure of larger businesses such as Woolworths, which had a distribution centre in the city. 

This means that the loss of one big firm employing thousands has been replaced by a host of small start-ups, employing only a handful at a time. In this respect, Cities Outlook 2015 captures Swindon at a time when it is undergoing a structural change in its economy – one that reflects many of the bigger, global macro-economic trends starting to take hold across much of the nation. 

But the discrepancy between population growth and declining jobs numbers can also be explained by its growing appeal as a residential destination. An increasing number of people are choosing to live in Swindon, where house prices are more affordable than in neighbouring areas, but commute out to work elsewhere. 

The main beneficiaries of this have been the rest of Wiltshire and nearby places like Winchester. The challenge for Swindon is to support future job creation, particularly in its city centre, to increase the job opportunities available to its residents.

Peterborough falls somewhere in the middle. While the city has seen its number of jobs increase over the last decade by four per cent, these jobs have tended to be in lower skilled fields than those created in Milton Keynes. The challenge for Peterborough is to build on the success of the last 10 years by encouraging growth in higher-skilled, higher-paying industries, to widen the choice of jobs available in the city.

Even in cities that have seen very similar increases in their populations, the challenges that each face in growing their economies in the future are very different. This is why the recent announcement of devolution to Greater Manchester is so important – cities face very unique challenges that are best addressed by tailoring policy to these needs. 

The clear mission of the next government must be to extend devolution to other places, allowing them to tackle the things that constrain their growth and to play an even bigger role in the national economy.

Paul Swinney is senior economist at the Centre for Cities.

 
 
 
 

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.