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This means that the loss of one big firm employing thousands has been replaced by a host of small start-ups, employing only a handful at a time.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.

 
 
 
 

As EU funding is lost, “levelling up” needs investment, not just rhetoric

Oh, well. Image: Getty.

Regional inequality was the foundation of Boris Johnson’s election victory and has since become one of the main focuses of his government. However, the enthusiasm of ministers championing the “levelling up” agenda rings hollow when compared with their inertia in preparing a UK replacement for European structural funding. 

Local government, already bearing the brunt of severe funding cuts, relies on European funding to support projects that boost growth in struggling local economies and help people build skills and find secure work. Now that the UK has withdrawn its EU membership, councils’ concerns over how EU funds will be replaced from 2021 are becoming more pronounced.

Johnson’s government has committed to create a domestic structural funding programme, the UK Shared Prosperity Fund (UKSPF), to replace the European Structural and Investment Fund (ESIF). However, other than pledging that UKSPF will “reduce inequalities between communities”, it has offered few details on how funds will be allocated. A public consultation on UKSPF promised by May’s government in 2018 has yet to materialise.

The government’s continued silence on UKSPF is generating a growing sense of unease among councils, especially after the failure of successive governments to prioritise investment in regional development. Indeed, inequalities within the UK have been allowed to grow so much that the UK’s poorest region by EU standards (West Wales & the Valleys) has a GDP of 68 per cent of the average EU GDP, while the UK’s richest region (Inner London) has a GDP of 614 per cent of the EU average – an intra-national disparity that is unique in Europe. If the UK had remained a member of the EU, its number of ‘less developed’ regions in need of most structural funding support would have increased from two to five in 2021-27: South Yorkshire, Tees Valley & Durham and Lincolnshire joining Cornwall & Isles of Scilly and West Wales & the Valley. Ministers have not given guarantees that any region, whether ‘less developed’ or otherwise, will obtain the same amount of funding under UKSPF to which they would have been entitled under ESIF.


The government is reportedly contemplating changing the Treasury’s fiscal rules so public spending favours programmes that reduce regional inequalities as well as provide value for money, but this alone will not rebalance the economy. A shared prosperity fund like UKSPF has the potential to be the master key that unlocks inclusive growth throughout the country, particularly if it involves less bureaucracy than ESIF and aligns funding more effectively with the priorities of local people. 

In NLGN’s Community Commissioning report, we recommended that this funding should be devolved to communities directly to decide local priorities for the investment. By enabling community ownership of design and administration, the UK government would create an innovative domestic structural funding scheme that promotes inclusion in its process as well as its outcomes.

NLGN’s latest report, Cultivating Local Inclusive Growth: In Practice, highlights the range of policy levers and resources that councils can use to promote inclusive growth in their area. It demonstrates that, through collaboration with communities and cross-sector partners, councils are already doing sterling work to enhance economic and social inclusion. Their efforts could be further enhanced with a fund that learns lessons from ESIF’s successes and flaws: a UKSPF that is easier to access, designed and delivered by local communities, properly funded, and specifically targeted at promoting social and economic inclusion in regions that need it most. “Getting Brexit done” was meant to free up the government’s time to focus once more on pressing domestic priorities. “Getting inclusive growth done” should be at the top of any new to-do list.

Charlotte Morgan is senior researcher at the New Local Government Network.