The Coalition Government believes that ‘rebalancing’ the UK economy is a top priority. It wants to stimulate growth in the private sector outside of the South East of England. And later this summer it will publish a White Paper on how it intends to do just that.
But new research conducted as part of the Cities 2020 research programme at The Work Foundation highlights the sheer magnitude of this task. Given the implications of the findings set out in our report published today, No city left behind? this goal may be unattainable. The interventions simply do not go far enough and public sector cuts will have a disproportionate and negative effect on many places outside of the South East.
This recession mirrored patterns of industrial decline: cities in South Yorkshire and the West Midlands were the worst affected. But the ‘geography of the recovery’ raises alarms. In essence, it appears as though the places that are expected to experience the greatest economic and employment growth over the coming the years are the places that were shielded in the recession; the places that are expected to see the greatest decline are those cities that fared worst.
No City Left Behind? argues that the economy will be driven by four growth sectors – knowledge intensive services, manu-services, low carbon goods and services and the creative industries. These industries, along with clusters of high skills and a strong private sector are located in cities such as Reading, Cambridge and London. These cities are likely to grow in the future.
However, the public sector has driven employment and economic growth in many places since the last recession. A plethora of towns and cities outside of the South East have become dependent on it. Concurrently, these places have a lower than average skills base and limited ‘growth sector’ potential. Places like Doncaster, Barnsley and Grimsby have bleaker prospects for growth.
What we are experiencing is a wholesale (and growing) structural divide within the UK economy. The plans (set out so far) of the government do not even scratch the surface of this problem. It will require new thinking and radical ideas if the Coalition truly wishes to ‘rebalance’ the economy.
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