Urenio Watch Watch: Cities

New report about the economic links between cities and towns

talk_of_the_townThe report Talk of the Town: The economic links between cities and towns was recently published by the Centre for Cities in UK. Its main objective is to understand how British cities, towns and villages interact and what is the impact they have on each other. Assuming these interactions affect the standards of living for people across the country and the national economy as a whole, this report shows that cities are home to the majority of the economy provides policy recommendation.

This research sets out the nature of the interactions between cities, towns and villages. It shows that the impact of cities goes well beyond their boundaries in a number of ways. Most importantly, it demonstrates that cities are home to the majority of the economy for UK. Despite covering just 9 per cent of land, they are home to 55 per cent of Britain’ s businesses and 60 per cent of its jobs, with this concentration increasing in the last two decades.

Cities also shape and impact on the economies and economic outcomes of the places around them. UK’s most successful cities both provide jobs for people in neighbouring towns and influence how attractive these towns are to business investment.

This is good news for those towns located close to successful cities which benefit from their success. But this research shows that the underperformance of a number of cities is bad news not just for that city’ s residents and the national economy overall, but for the residents in towns around them too. This poor performance restricts the employment opportunities cities are able to offer the residents of their neighbouring towns, and it reduces the town’ s chances of attracting in higher-skilled, better-paid work.

Figure 1. Town economic outcomes in relation to its economy and labour links with cities, 2011.

Policy Recommendations

A policy approach to the myriad economies that make up the UK needs to acknowledge and work with the network that these economies have created, and reflect their different roles. This report represents a starting point towards a better understanding of the aforementioned issues and recommends that policy should:

  • Focus on improving skills across the country. Skills are a strong predictor of employment outcomes whether someone lives in a town or city, and this must be the focus of any policy looking to improve the employment outcomes of people wherever they live.
  • Recognise the role that cities play in their wider local economies and the national economy. Strongly performing cities are crucial to the performance of the national economy, and the underperformance of many of them is a problem not just for those people who live in cities but for those who live around them too.
  • Proceed with further devolution to tailor policy responses to different areas. Cities and their surrounding areas are best placed to respond to their specific needs, but they require the policy tools to do this effectively.

  • Read and download the whole report here.