ENHANCING PRODUCTIVITY IN UK CORE CITIES.

Description

Foreword Acknowledgements Executive summary Assessment A summary of recommendations Assessment and recommendations Assessment Core Cities display low productivity levels by national and international standards The workforce and sector composition holds back productivity The potential of agglomeration economies is not fully realised Core Cities’ clear potential is hampered by a range of socioeconomic challenges Closer integration of Core Cities and their surrounding regions could yield productivity benefits The specific challenges of Core Cities could be addressed with place-based policies Core Cities have navigated a fast-changing governance landscape, marked by an asymmetric and deal-driven process of devolution Despite recent fiscal measures, Core Cities regions have limited fiscal powers and face funding uncertainties, which can be further exacerbated in the context of Brexit Core Cities’ current powers limit their ability to improve their performance Recommendations Core Cities’ labour markets need investment to upskill low-skilled workers Labour force participation should be encouraged Public transport provision and regulation needs to be strengthened and soft modes of transport should be encouraged Core Cities and the UK Government should work together to find new ways of encouraging housing development Spatial planning at the city-region scale should be strengthened Place-making policies should be used to enhance productivity and well-being Linking Core Cities with surrounding towns and villages can help “borrow” agglomeration economies The devolution process must continue and ensure a better match between responsibilities and financial resources Multi-year budgeting can help Core Cities plan over longer time frames The capacity to plan and implement integrated strategies should be strengthened Towards greater productivity and inclusiveness in Core Cities References Note 1 A snapshot of socioeconomic conditions in UK Core Cities Introduction Core Cities constitute almost one-quarter of the UK economy The economic structure of Core Cities Unemployment levels in Core Cities are low but labour force participation is weak Core Cities have a diverse service-based economy The number of small businesses has been growing but it is unclear whether this represents an increase in entrepreneurial activity Boosting service exports would yield productivity benefits Education and skills utilisation are essential pieces in the productivity puzzle Skills gaps are an issue for some Core Cities Innovation is a key determinant of productivity and long-term growth Digital infrastructure development should be supported Transportation infrastructure is a bottleneck for productivity Core Cities rely heavily on road transport Better public transport is crucial Core Cities need the powers to regulate local public transport effectively Reducing car-based transport is urgent for environmental and public health reasons Inequality and segregation of income needs to be addressed Housing supply is key for inclusive growth Brownfield redevelopment prevents the fragmentation of the urban fabric References Notes 2 Productivity in Core Cities The UK productivity puzzle Weak average productivity outside of London holds back the aggregate productivity in the UK Productivity levels have been diverging across Core Cities Understanding the factors that drive productivity in cities Cities are drivers of productivity growth Skills and industry composition matter for productivity Agglomeration economies Local institutions, infrastructure and geography Productivity in Core Cities: An econometric analysis Core Cities generate agglomeration economies below their potential Generating stronger agglomeration economies would yield significant productivity gains Comparing the impact of workforce and sector composition to the underutilised potential of agglomeration economies Further evidence on the role of sectoral composition, infrastructure and connectivity for productivity Productivity and human capital Connectivity of cities Industrial specialisation and diversity Local and regional planning matters for productivity The importance of place-making Linking Core Cities with surrounding regions References Notes 3 Making the governance of UK Core Cities work for people, places and productivity Introduction Core Cities encapsulate the opportunities and challenges of the process of devolution adopted in the UK Core Cities have navigated a fast-changing governance landscape Core Cities have grappled with an asymmetric and deal-driven process Despite recent fiscal measures, Core Cities have limited fiscal powers Revenues Spending Direct investment Borrowing and debt Core Cities are confronted with funding uncertainties, which are exacerbated in the context of Brexit While Core Cities play a key role in productivity, they face limitations within their current powers Creating scale through pan-regional bodies Contributing to the implementation of the UK Industrial Strategy Boosting skills in Core Cities Unlocking the potential of transport and infrastructure in Core Cities Addressing the climate imperative in Core Cities Pursuing more inclusive growth in Core Cities Ways forward to help make devolution more effective in boosting productivity in Core Cities Continue the devolution process and ensure a better match between responsibilities and financial resources Enable multi-year budgeting Strengthen the capacity to plan and implement integrated strategies Towards achieving the productivity-inclusiveness nexus in Core Cities References Notes