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Dr Neil Lee

Decisive government action could save cities at risk of being left behind

Authors: Dr Neil Lee Gideon Benari

07 July 2010

A report by The Work Foundation published tomorrow (Thursday) investigates the geography of the UK recovery and sets out which policies will support economic prosperity and respond to the distinctive circumstances faced by different cities.

To be launched at The Work Foundation and OECD LEED Programme Thriving in recovery conference which will explore how cities can prosper over the next decade, the report warns of the danger of a split recovery. This would result in a number of already successful cities, mainly located in the South East, leading the recovery leaving less successful cities with low growth, low employment and low prospects.

Setting out the implications for the Coalition Government, No city left behind? shows that cities with highly educated populations, high levels of employment in knowledge intensive industries and relatively low levels of employment in the public sector are likely to lead the recovery. But there is real concern that cities with low skilled populations and a strong reliance on the public sector for jobs will remain scarred by the recession for many years to come unless targeted action is taken.

Lead author Neil Lee said, ”Our analysis suggests that the recovery will bypass some cities altogether. Their poor skill levels and dependency on public sector employment, along with a lack of dynamic firms, mean there is a real risk they will get left behind by the recovery. While nobody can say for sure what will happen over the next decade, we can identify a number of cities which are likely to grow – and those which may struggle.”

The high growth cities – places like Reading, Oxford and London – tend to be located in the South East and are well connected to London. Low growth cities are more dispersed, and include Grimsby, Barnsley and Hull.

Neil Lee added, “Government action is now needed to ensure that no city is left behind by the recovery. The government must ensure that appropriate finance is made available to support high growth small and medium size enterprises, particularly those outside of London and the South East which can struggle to obtain finance to expand. This could be achieved through a more diverse range of financial institutions and by correcting the bias in finance for certain regions.”

Other policy recommendations in the report include concentrating resources for enterprises with potential for rapid employment growth and ensuring that public sector cuts do not affect the ability of firms to commercialise university research. This will rely on support for innovation, access to growth finance and an improved digital infrastructure.

Also to be launched at the conference will be the OECD’s Organising Local Economic Development report, which outlines in detail the role of development agencies and companies throughout the world in helping places to respond to challenging economic contexts.

Sergio Arzeni, Director of the OECD Centre for Entrepreneurship, SMEs and Local Development said, “The LEED Programme has advised governments and communities since 1982 on how to adapt to global trends and tackle complex problems in a fast changing world. Delivery vehicles such as agencies and companies have been important in delivering local economic development. This first international comparative study is a valuable resource for everyone engaged in local economic development and is particularly timely as local economies face challenging economic circumstances."

Greg Clark, Chair of the OECD LEED Forum of Development Agencies and Investment Strategies added, “Economic development is unlike the other activities of local government because it involves intervening directly in markets which involve different processes, geographies, timescales and skills from most local government services. Therefore national and local governments are on a constant mission to make new arrangements that will work in new business cycles. This matters for both high performing and low performing local economies. They each need their own distinctive arrangements if they are to make the most of the new business cycle and its opportunities.”


Notes to editors
No City left behind? The geography of recovery and its implications for the Coalition Government by Neil Lee available at
Neil Lee is available for interviews and briefings.
The Work Foundation and OECD/LEED Programme Thriving in recovery conference is on Thursday 8 July 2010. It will explore how cities can prosper over the next decade and speakers include Will Hutton, Joe Montgomery, Director General, Communities and Local Government, Richard Barnes, Deputy Mayor of London and Simone Tani, Province of Florence. Full details available at
Organising Local Economic Development by Greg Clark, Joe Huxley and Debra Mountford is published by the OECD. The report argues that while Development Agencies have become an increasingly popular organisational vehicle for shaping and pursuing local economic strategies, there is no common understanding or rigid formula of what a Development Agency is. This book analyses 16 agencies in 13 locations worldwide, as well as drawing from the OECD LEED materials and wider work on the roles of Development Agencies. The key focus of the book is to distil why and how Development Agencies are established, what they can achieve, what tools they require, what the context is for their success, as well as what can go wrong or what requires attention if success is to be assured.
The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks.
LEED is the OECD Programme on Local Economic and Employment Development.

Media enquiries:

Gideon Benari or Nasreen Memon 020 7976 3507 or 07825 527 036