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National policies won’t fix local problems

Andrew Carter, the recently-appointed chief executive of Centre for Cities, argues that the new government will only succeed if it focuses on implementing policies that are adaptable to place-based needs.

Throughout the short-lived election campaign, leaders of the parties were clear in their pledges to introduce policies that benefit the country as a whole. Given the likely impact of Brexit and the political focus on the ‘left behind’, it is no surprise that politicians were keen to demonstrate their understanding of the world beyond Westminster. 

But for the most part, such promises are unlikely to actually make much of a dent on the disparities we see between places and people across the UK. 

That’s because, despite the growing understanding in recent years of the diverse role that different places play in the economy, policy discussions are still largely national in focus. The issues that underpin economic divides play out very differently in cities across the country. 

The new government, as it sets how it will address the UK’s biggest economic challenges – productivity, skills and housing – must have these differences in mind, and introduce policies that are flexible enough to respond to the differing needs of localities. 

Take the UK’s productivity problem – a huge issue that needs to be addressed if we are to improve living standards and kick-start wage growth. This problem doesn’t play out the same way across the country. A worker in a city in the greater south east – London, Reading or Milton Keynes – produces in 3.5 days what a worker in a northern city produces in five. This variation in performance needs to be central to the government producing plans. That means ensuring successful cities can maintain their momentum, while still supporting those cities that have struggled. 

An important way of improving productivity is to improve skills – it was a big theme over the course of the election, and the cross-party acknowledgement of the country’s skills problems is welcome. The UK’s economic future will be in more high-knowledge, high-skilled service industries, not less. Once again, the divide across cities, and therefore the country, is clear. Our least productive cities also have the lowest shares of skilled people – both in terms of degree-level qualifications and GCSEs – and the highest shares of no-skilled people. By making sure that people’s skills are improved, it will create more opportunities for employment, wage growth and business growth. 

And, where productivity is already strong, the costs of success must be curbed. The most productive cities, many of which are in the south east, also suffer from the most expensive housing. The Conservatives pledged to build a million more homes, but approaching this at a national level will not solve the crisis of affordability that is the most acute in places like London and Cambridge. 

Policymakers must not only build housing, they must build it in the places that need it most, and consider a range of options for development when doing so. The UK needs its successful cities, but if issues like housing and congestion are not dealt with, then the costs to both business and workers of being in those cities could begin to outweigh the benefits. 

In the last seven years, huge steps have been taken to give cities the tools they need to address the unique challenges their individual economies are faced with, and it is essential that the UK continues down that path over this Parliament. If the national economic challenges are not seen through a city lens, there is the risk that the policy meant for the many will barely even fall to the few.

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