No Match Found
The gap between the highest and lowest performing cities in PwC’s Index is narrowing but economic progress to level-up the UK is too slow.
Report calls for ambitious devolution reform to reshape the roles of central and local government, business, and communities, along with greater fiscal flexibility and innovation.
People are prioritising work-life balance more as post-pandemic changes to working patterns offer more flexibility, and this is helping to unlock growth across UK cities.
Cities such as London, Liverpool and Belfast are set to break away from sluggish economic growth expected to be seen by most cities, as they are buoyed by high-growth sectors.
The gap between the highest and lowest ranked UK cities in PwC’s Good Growth for Cities Index is narrowing, as the economic wellbeing of the cities at the bottom of the Index has improved at a faster rate than those at the top.
The Demos-PwC Good Growth for Cities Index ranks 50 of the UK’s largest cities (generally considered those with populations of at least 350,000 people), plus the London boroughs as a whole, based on the public’s assessment of 12 economic measures, including jobs, health, income, safety and skills, as well as work-life balance, housing, travel-to-work times, income equality, high street shops, environment and business startups.
Oxford, Swindon, Exeter, Bristol and Southampton make up the top five cities in the overall Index. Cities in the lower performing end of the Index include London, Bradford, Middlesbrough and Stockton, Birmingham and Manchester.
Oxford is the top performing city, with a strong performance on economic measures such as income, employment rates and life expectancy helping it to maintain first place. However it is improving at a slower rate than lower performing cities, such as Bradford. While Bradford is at the bottom of the ranking, it is increasing its score more significantly on factors such as skills and income distribution where it performs above the national average.
New analysis shows that people are prioritising work-life balance more than in previous years as post-pandemic changes to working patterns allow people greater flexibility, greater control over working location and supporting better work-life balance. As a result, this is helping to unlock good growth in many cities across the UK.
PwC’s research shows little evidence of the regional disparity gap narrowing overall and argues that progress in levelling-up the UK is too slow. PwC recommends the need for more radical and ambitious devolution of governance and powers to a regional, local and hyper-local level, including greater fiscal flexibility and innovation to help cities respond to their specific challenges.
Karen Finlayson, regional lead for government and health industries at PwC, says:
“While it is encouraging to see the gap between the highest and lowest ranked UK cities narrowing, progress to level up the UK is too slow. Cities should be places of prosperity and opportunity but unfortunately huge disparity remains across the UK, and we are not seeing enough consistent change.
“To make the progress needed to drive inclusive growth, a more radical and innovative approach to devolution is critical. This is not simply a shift in powers between central and local government, but instead an effective redistribution of accountabilities to the best-placed decision makers at a regional, local and hyper-local level to deliver the best results for places and people.”
The Demos-PwC Good Growth for Cities Index measures cities’ performance against a series of 12 variables, each one weighted relative to how important it is considered by the 2,000 people surveyed as part of the study. For the first time the Index provides a regional breakdown of public priorities, underlining what issues are important to people at a local level. The North East places the highest weighting on transport of any of the UK regions, whereas the South East places the environment highest relative to other regions.
As households struggle with the cost of living crisis, they are prioritising financial issues, such as income, jobs and the fair distribution of wealth. However, other public priorities - most likely impacted by cost of living pressures dampening consumer appetite for spending - have fallen, including the strength of the high street and house prices.
This shift in public priorities has triggered changes to cities’ performances, for example Plymouth takes fifth place this year, rising from 19th last year, performing well on income distribution, work-life balance and commuting times.
While some cities, such as Oxford, Exeter and Swindon perform well in the Index on economic measures, they are set to see some of the lowest economic growth across UK cities in 2023. For example, Oxford has an above average share of economic activity within the professional, scientific and technical activities sectors, which are expected to contract during 2023 as financial pressures constrain spending.
In contrast, cities such as London, Liverpool and Belfast are set to break away from the sluggish economic growth expected to be seen in most cities, as they are buoyed by high-growth sectors, such as transportation and storage, and arts and entertainment.
The report includes recommendations for a radical reshaping of the roles of central and local government, business, and communities, enabling them to deliver inclusive growth across places. This includes steps towards greater fiscal flexibility and innovation at a city level, such as those included in Greater Manchester’s trailblazing devolution deal, which allows for 100% retention of business rates.
Rachel Taylor, government and health industries leader at PwC, says:
“Devolution is a 100-year-old problem so it will take time to see signs of success. We need to start making headway in building a new form of regional and place based government with real resources and capabilities to unlock the potential of our cities. It will require creativity and collaboration across all levels of government, public and private sectors and with citizens. This will need an ecosystem where decisions that impact people's lives, be it access to jobs, housing or education, are made by those who really understand the places where they live. And that means a new type of devolution.”
Notes to Editors:
About the Good Growth for Cities Index
The Demos-PwC Good Growth for Cities Index was established in 2011 and is updated annually.
The Index looks beyond GDP and covers broad economic measures. These include jobs, health, income, safety and skills, as well as work-life balance, housing, travel-to-work times, income equality, high street shops, environment and business start-ups. The index measures the performance of 50 of the UK’s largest cities, England’s Local Enterprise Partnerships (LEPs) and ten Combined Authorities, against this basket of 12 factors which the public think are most important when it comes to economic wellbeing. More details on the methodology can be found in the report here www.pwc.co.uk/goodgrowth
Demos is a cross-party think tank: an independent, educational charity, which produces original and innovative research. Find out more at www.demos.co.uk
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 156 countries with over 295,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at PwC.
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see how we are structured for further details.
© 2023 PwC. All rights reserved.
Press office, PwC United Kingdom
Media Relations Manager, Midlands, PwC United Kingdom
Tel: +44(0)7718 979 841