Belfast seventh amongst 11 UK devolved cities, but 32nd in PwC’s ‘all-cities’ Index
Derry/Londonderry remains 11th but shows significant improvement from 2017
Oxford, Reading top the index for third year running; Preston most improved
Northern Ireland recovery has lagged England, Scotland and Wales
With only around 150 days before the UK leaves the EU, Belfast has slipped down a table of the best UK cities in which to live and work, according to the latest Demos-PwC Good Growth for Cities 2018 index.
For a third year running, Belfast has dropped down in the overall evaluation of the UK’s 42 leading cities, now in 32nd place compared to 30th last year, 25th position in 2016 and 5th in the 2015 index.
The Index shows that while Belfast has performed above average for job creation, work-life balance, transport infrastructure and income distribution, other cities have recovered faster from the financial downturn and performed better. The city’s high levels of economic inactivity and long-term sickness combined with the lack of new business formation, relative to competitor cities, have contributed to the decline.
This year’s index of 42 cities across the UK shows a continuing gap between the highest performing cities of Oxford and Reading and the lowest ranking, Swansea and Sunderland. However, even the cities towards the bottom of the Index have improved significantly with Swansea, for example, demonstrating the greatest improvements in employment and environmental factors.
Published today [1 November 2018], the seventh annual Good Growth for Cities 2018 index sets out to show that there’s more to life, work and general well-being than just measuring GDP. The index measures the performance of 42 of the UK’s largest cities, England’s Local Enterprise Partnerships (LEPs) and the nine Combined Authorities, against a basket of ten indicators based on the views of the public as to what is key to economic success and wellbeing.
These include employment, health, income and skills - the most important factors as judged by the public - while housing affordability, commuting times, environmental factors and income inequality are also included, as is the number of new business starts.
The index also tracks the performances of the four devolved nations since 2011. Though Northern Ireland continues the improvement seen in the previous year, it is not seeing the same pattern of strong recovery that has been experienced in the rest of the UK. Prior to the crash, it was second in the table and is now holding on to the last spot.
Derry remains in 11th place but has shown significant improvement over the last year. The greatest improvement was in jobs creation.
Commenting on the latest index, PwC Northern Ireland regional chair Paul Terrington said:
“The announcement that the Belfast City Region Deal is to go ahead could not have come at a better time. While we see some positive signs such as job creation, income distribution and growth in business and financial services, we need to realise that Belfast is not growing at the same pace as cities elsewhere across the UK.
“Employment levels are about where they were before the financial crisis, but low productivity, new business formation relative to other cities and long-term economic inactivity are all constraining growth and prosperity - and the continued lack of a functioning Executive is not helping to instil confidence or investment.
“Though the Belfast City Region Deal partners will have to make do with £100m less from the Chancellor, they will still be able to implement critical strategies that can stimulate investment and regeneration. Ideally we would also see Executive in place to deliver on a Regional Industrial Strategy as well, the importance of which was highlighted in the index.”
The index says Northern Ireland has seen a less robust trend in performance since 2011-13 compared to the rest of the UK, with a decline in scores between 2012-14 and 2013-15. Its slower trajectory of improvement reflects higher unemployment prior to recent improvements, alongside a rise in the share of the population economically inactive due to long-term sickness.
The index was developed in the aftermath of the 2008 financial crisis in response to the growing sense that people needed more from their leaders than an improvement in GDP. Factors like health, housing affordability and the environment need to be considered alongside jobs, skills and incomes. This is reflected in the city slipping to 38th place in terms of absolute improvements experienced since the last index that covered the period 2014-16.
In the devolved cities ranking, Belfast came in seventh out of 11. Since 2016, it has dropped two places behind Perth and Glasgow. Inverness and Edinburgh were first and second respectively.
In the last year, Belfast experienced above-average job creation, with the largest improvement coming from the burgeoning financial services (FS) sector, with predictions this growth should continue.This is consistent with PwC predictions earlier this year that Belfast could become the second fastest-growing FS hub outside London by 2025. However this optimism is countered by the research which shows it is one of only three cities which improved in job creation but did not also reflect a significant improvement its skills base.
Paul Terrington said:
“Belfast has demonstrated significant potential for continued growth in financial and business services and is a recognised global hub for technology.
“However we also need to see strategic investment in developing the high-quality skills that are required to capture the full potential that high-value FS jobs can bring. We recently welcomed the first year of PwC tech degree apprentices at Queen’s University, and PwC also developed the first group of fully-digital chartered accountants.
“Belfast rightly has a reputation as an innovative city and it’s critical this message is shared worldwide. However, we also need show that we have the political maturity to get the Assembly up and running and get to grips with the serious challenges facing Belfast and the region.”
Notes to editors
About the Good Growth for Cities report
A copy of the Demos-PwC Good Growth for Cities index 2017 can be downloaded from www.pwc.co.uk/goodgrowth from 00:01 hrs GMT, 1 November.
The Demos-PwC Good Growth for Cities index 2018 measures the current performance of 42 of the largest UK cities against a basket of 10 indicators that - based on the views of the public – are seen as critical to economic success and wellbeing. Employment, health, income and skills are the most important of these factors, as judged by the public, but housing affordability, commuting times, environmental factors and income inequality are also included in the index.
The latest index is based on data that was averaged over the period 2015-2017. We use rolling three year averages in order to minimize the impact of the volatility from year to year that is often a feature of local area data.
We have included cities with a travel-to-work area (TTWA) of at least 250,000 people.
Further methodological details, including definitions of all of the variables in the index and data sources, can be found in Appendix 1 of the report.