A new approach to local economic growth

Where have we been? Where are we going?

Andrew Carter

Centre for Cities

2nd December

• The challenges facing UK cities over the next decade

• Key lessons on the nature of private sector jobs growth

• Why local enterprise partnerships are important and what they should do

• Where next following the Local Growth White Paper?

Need different sources of job growth over the next decade compared to the last

Average net fall in manufacturing employment among English cities between 1998 and 2008 was 33%.

That’s obviously not going to be the case over the next decade

Office for Budget Responsibility estimates 600,000 or 490,000 or 330,000 jobs could go from the public sector by 2015/16.

Public sector cuts will hit every city – but vulnerability varies

… this makes private sector job creation ever more pressing

38% of net additional private sector jobs between 1998 and 2008.

London has been the top performer on private sector jobs growth in recent decades

. . . But not only the South

Top 10 performers on private sector jobs growth in North & Midlands

Most Core Cities have been doing fairly well in terms of total jobs added and percentage growth.

Bottom 10 performers on private sector jobs growth in North & Midlands

Birmingham and Nottingham the exceptions among Core Cities – though there’s a question mark about the Nottingham data.

Places like Stoke and Burnley still struggling with industrial decline.

Variable performance on unemployment

Populations normally respond to changing economic opportunities

Manufacturing is unlikely to be a major source of jobs growth

Niche sectors are important but not the only answer

Need to pay more attention to all firms

LEPs – the latest institutional approach

• 24 local enterprise partnerships approved

• Most major cities covered

• London partnerships could follow

The strength of Manchester as an economic centre generates labour market relationships with neighbouring areas:

Overall Commuting Patterns (ward level)

Natural economic areas are important

Affects housing and business choices in the city region

Variable Size, Scale and Complexity

“Who pays should benefit, who benefits should pay”

Some LEPs are better positioned for growth than others

High skills means high wages

High wages in the private sector except Oxford

What should LEPs focus on?

RGF is not the main event . . .

What should LEPs focus on?

Local Growth – what did the White Paper tell us?

• Not “everywhere will, or will want to, become an economic powerhouse”

• There will be no additional funding for partnerships

• Business rates could be localised as a growth incentive

• No real role for partnerships in skills policy

• Confirmed the creation of new ‘Growth Hubs’

And what didn’t it resolve?

1. 2.

3. 4.

So will local enterprise partnerships work?

• Rebalancing the economy geographically will not be an easy task - growth will continue to be uneven

• Success not clearly defined – so can they ‘not work’?

• Local enterprise partnerships should focus on improving the business environment – getting the basics right

• Central government should re-examine funding and powers

A new approach to local economic growth

Where have we been? Where are we going?

Andrew Carter Centre for Cities

a.carter@centreforcities.org020 7803 4300