Good Growth for Cities

London ranks 40th out of 50 cities across the UK. London (boroughs only) ranks near the bottom of the index, placing 48th.

Notably, London does not score near the average for any variables, always coming significantly above or below the average. London scores particularly well in three key areas:

• New businesses per head: Where London achieves a score of 2.77, compared to the national average of -0.11.
• Income: Where London achieves a score of 2.12, the third highest score for income this year.
• High streets: Where it scores the highest of any city, with a score of 2.40 compared to an average of -0.12.

However, it is clear from the rest of its scores that London pays a price for this success with particularly low scores for:

• House price to earnings: Where it scores considerably below the UK average.
• Owner occupation: Which is strongly correlated to the house price to earnings.
• Transport: Where London achieves a score of -2.58 for the Travel to Work Area and -2.74 when assessing the boroughs only.

Assessing the potential economic recovery from COVID-19

• The average annual economic growth rate as measured by Gross Value Added (GVA) in London is 7.4% in 2021. This is slightly above the UK average rate of 7.3% during the year.
• London sees a slightly above average economic recovery in 2022, driven by a strong underlying sector composition, and the significant reduction London has seen in the percentage of people claiming Universal Credit. London’s estimated growth rate in 2022 is 4.7%.

When measured against the priorities chosen by the public, five out of eleven cities in the Midlands achieve scores above the UK average, with Milton Keynes in the top ten of this year’s Index.

Three new cities have been added into the Midlands region. Lincoln, Northampton and Peterborough have been introduced into this year’s Index.

As a whole, cities in the Midlands perform well on the following criteria:

• Safety: Where six out of eleven cities score above average.
• Transport: Where four out of eleven cities score above the national average, with the rest at least average.
• Income distribution: Where four cities score above the Index average and the rest at least average. However, this positive performance is also coupled with lower scores in jobs, with five cities scoring below the national average.

Assessing the potential economic recovery from COVID-19

• The average annual economic growth rate as measured by Gross Value Added (GVA) for cities in the Midlands region is 6.9% in 2021. This is below the UK average rate of 7.3% in 2021.
• Peterborough and Milton Keynes are expected to grow the most in comparison to other cities in the Midlands, with a growth rate of 7.4% in 2021.
• In comparison, cities such as Leicester grew by just 6.5% in 2021. Its low proportion of its economy in sectors which see strong bounce-backs contributes to this low growth rate in 2021.
• Out of the three new cities that have been introduced into this region, Peterborough is expected to see the strongest economic growth rate in 2021 growing at 7.4%.

Belfast is the only Northern Irish city contained within the Good Growth for Cities Index.

• When measured against all the priorities chosen by the public, Belfast is the 8th ranked city in this year’s Index, with a score of 0.43. It ranks first out of the six cities in the devolved nations that we cover in the main Index.
• Belfast performs significantly above average for jobs, work-life balance, house price to earnings, transport and income distribution.
• In contrast, Belfast performs significantly below the average for income, new businesses and high streets.
• The variable with the biggest improvement in Belfast relative to last year’s index was environment, which improved by 0.46 over the period.
• On the other hand, High streets saw the biggest decline in Belfast since last year’s report, falling by 0.26 relative to the 2017-19 index.

Assessing the potential economic impact of COVID-19

• The average annual economic growth rate for Northern Ireland is 6.4% in 2021. This is below the UK average growth rate of 7.3% in 2021.
• A key factor to Belfast’s lower recovery rate is the low percentage decrease in the proportion of individuals claiming Universal Credit compared to a year prior.

When measured against the priorities chosen by the public, cities in the North West perform around the national average. The highest performing city is Preston, which comes 13th in our index. The lowest performing city is Manchester, ranking 47th out of 51 cities.

As a whole, cities in the North West perform well on the following criteria:

• Work-life balance: Where all cities in the region perform significantly above the national average.
• House price to earnings: Where all cities score above or around the UK average.
• Income distribution: Where all cities in the North West score significantly above the UK average.

However, the North West performs less well on the health, income and high street variables.

Cities across the North West perform differently across the index, reflecting the individual challenges that each city faces.

Assessing the potential economic recovery from COVID-19

• The economic recovery for cities in the North West is on the lower end out of all regions in the UK. The average annual economic growth rate as measured by Gross Value Added (GVA) for cities in the North West region is 6.8% in 2021. This is lower than the UK average rate of 7.3% in 2021.
• Warrington & Wigan see the strongest economic recovery in the region at 6.9% in 2021. This is followed by Liverpool, Preston and Manchester.
• Going forwards, we expect Warrington & Wigan’s underlying sectoral construct to support its strong economic recovery in the region as we move into 2022. The city is expected to grow by 4.6% this year.

Out of the three Scottish cities included in our national rankings, two place in the bottom fifteen. Edinburgh places above average at 19th, outperforming Aberdeen and Glasgow which sit at 37th and 42nd respectively.

Cities across Scotland perform well across three key criteria:

• Skills: Where the cities are almost entirely above the national average.
• Work-life balance: Where the cities are at or above average.
• House price to earnings: Where the cities score significantly above average.

However, Scottish cities score less well on health, new businesses and jobs, with all 3 significantly below average for health and new businesses.

Assessing the potential economic recovery from COVID-19

• The average annual economic growth rate for cities in Scotland is 7.1% in 2021. This is slightly below the UK average rate of 7.4% in 2021.
• Aberdeen and Edinburgh recovered the strongest in the region, growing by approx. 7.5% and 7.6% in 2021.
• In 2022, we expect these trends to continue – Aberdeen and Edinburgh’s economies are expected to grow by 5.5%, above the UK average growth rate in the year. Glasgow grows by 4.4% in 2022, although original base-year effects ought to be considered.

When measured against the priorities chosen by the public, eleven out of fourteen cities in the South East score above the UK average, with Oxford, Bournemouth and Reading ranking first, second and fourth respectively in our national index. Southend is the lowest performing city in the region, ranking 43rd out of 51 cities across the UK.

Four new cities have been added into the South East region. Bournemouth, Chelmsford, Ipswich and Luton have been introduced into this year’s index.

• As a whole, the South East performs particularly strongly in three key variables:
  • Income: Where most cities in the region score significantly above average.
  • Health: Where twelve cities perform significantly above average, with the other two performing at the average.
  • Jobs: Where half of the cities in the South East score significantly above the UK average and the other half at the average.

There is, however, a price for this success, with twelve cities in the region scoring substantially below average in house price to earnings and at or below average for income distribution (with the exception of Norwich).

Assessing the potential economic recovery from COVID-19

• The average annual economic growth rate of cities in the South East is 7.9% in 2021, above the UK average of 7.3%.
• As well as ranking first in the index this year, Oxford’s economic growth rate of 7.9% in 2021 is higher than the UK average, and higher than some of the other cities in this region.
• Cities in the region are broadly expected to all grow in 2021 above the UK average growth rate. Only Southend and Medway grew lower than the UK average, by 7.1% and 6.6% in 2021.
• We expect a similar pattern of results in 2022, with cities that perform strongly in the year also continuing their strong economic growth this year. Southampton is expected to see its economic growth rate continue to proliferate in 2022.

When measured against the priorities chosen by the public, all four of the cities in the South West achieve scores above the UK average, with two cities – Bristol and Swindon – in the top ten of this year’s index. Exeter is not far behind, placing 11th, while Portsmouth lags slightly at 18th.

As a whole, cities in this region perform well on the following criteria:

• Transport: Where all cities, except Bristol, score significantly above the national average, with Bristol still scoring around the average.
• Health: Where all cities, except Plymouth, score significantly above average, with Plymouth still scoring around the average.
• High street: Where all cities, except Swindon, score significantly above average, with Swindon still scoring around the average.

However, the region performs more poorly on new businesses, where two of the four cities, Exeter and Plymouth, score significantly below average, while the other two are around the average. For the house price to earnings indicator, Plymouth and Swindon perform at the average while Exeter and Bristol perform significantly below.

Assessing the potential economic recovery from COVID-19

• The average annual economic growth rate of cities in the South West region is 8.2% in 2021. This is above the UK average of 7.4% during the year.
• Predictions on recovery rates for cities in the region vary drastically compared with other regions in the UK. Plymouth and Exeter see the highest recovery rates across all cities in the Index.

When measured against the priorities chosen by the public, the lowest performing city in Wales is Swansea, which ranks 44th out of 50 cities nationally.

As a whole, the two cities included from this region perform well on the following criteria:

• Income distribution: Where both Cardiff and Swansea perform significantly above the national average, with Swansea showing a strong improvement.
• Jobs: Both cities perform around the national average for jobs, but with a marked improvement from Cardiff and Swansea, also showing an improvement compared to 2017-19.

However, the region performs more poorly on income, high streets and health, with both of the cities performing significantly below the national average on these variables.

Assessing the potential economic recovery from COVID-19

• The average annual economic growth rate of cities in Wales is 6.3% in 2021. This is below the UK average of 7.4% during the year.
• Predictions on recovery rates for cities in the region vary drastically compared with other regions in the UK. Plymouth and Exeter see the highest recovery rates across all cities in the Index.
• The average annual economic growth rate for cities in Wales is 6.3% in 2021. In 2022, the region is forecasted to grow at 4.0% which is also lower than the UK average of 5.1%. However, base-year effects should be taken into account with these figures – a lower impact rate in 2020 will mean there is less to recover in subsequent years.

When measured against the priorities chosen by the public, only one out of nine cities in Yorkshire and the North East achieves a score above the UK average. York ranks 15th out of 51 cities with a score of 0.28, while the other cities in the region rank from 30th to 51st.

The region also has the lowest performing city in this year’s index: Middlesbrough & Stockton, which scores -0.58. Two new cities have been added into the Yorkshire & North East region. Huddersfield and York have been introduced into this year’s index.

As a whole, cities in Yorkshire and the North East perform well on the following criteria:

• House price to earnings: Where seven of the ten cities score significantly above the national average.
• Work-life balance: Where every city, bar Hull, scores significantly above the national average. Income distribution, where nine out of ten cities score at or above average.

However, the region performs poorly in several other variables, including: income, jobs, health, new businesses per head, owner occupation and safety, where only a few cities perform at or above the national average for each variable.

Assessing the potential economic recovery from COVID-19

• The average annual economic growth rate of cities in Yorkshire & the North East is 6.7% in 2021. Overall, cities in this region are estimated to recover slower than other regions and cities in the index. The UK average economic growth rate in 2021 is 7.3%.
• Slow recovery is largely driven by a high proportion of the economy in production sectors, which the ONS predicts has generally contracted in 2021.
• Bradford is estimated to see the slowest economic recovery in the region, growing at just 6.1% in 2021 and 4.0% in 2022.
• On the other hand, Middlesbrough & Stockton and York are estimated to see strongest recoveries in the region. Their economies are both estimated to grow by 7.0% in 2021 and by 4.9% and 4.8% respectively in 2022.