Why is UK productivity so low? It’s the economic question all politicians are asking.
It’s clear to me that a big part of the problem is a lack of strategy and co-ordination. For example, are we planning our transport systems based on where our economic or energy assets are? We’re not because we don’t plan properly where these things are, or have a way to make sure they work together.
Old narratives are getting in the way of common sense – that we should think regionally to create more and better growth. In most other countries, this is obvious. And we know it can work here, because we can see how it’s helped Scotland and London – two places in the UK with the most advanced regional planning.
Several reports have been published about the importance of English regions recently, including a new set of maps of four ‘mega-regions’ in England published by the RSA with three planning partners. The maps show in one place the assets our regions have and show how government and business could make better decisions about investment.
Mid-sized cities are growing faster than big ones. This makes regions very important.
The last few years have seen a lot of political attention focused on cities as a way to grow and rebalance the economy. In the UK, cities like Birmingham, Manchester and Leeds have seen healthy increases in population and prosperity, albeit from a low base, and they have also been at the cutting edge of social and cultural innovations. This is mirrored overseas. Around the world, ‘the future is urban’.
There is a lot that’s true in this narrative, but it ignores a more detailed understanding of types of city and their relationships with one another.
The Resolution Foundation recently published research which finds that fewer young people are moving to London. The benefits of higher wages are being outstripped by rising housing costs.
This should not be a great surprise. First, academic theory tells us that there is a fine balance between the benefits of bigger cities (sometimes called agglomeration) and the costs of congestion: recent transport trends also suggest London has passed a tipping point.
Second, the evidence shows that most global mega-cities have been on their way down for over a decade. Places like New York and Tokyo are creating less jobs. London has been protected from this trend by huge public spending, on everything from Crossrail to the Olympics, but now the trend seems to have caught up with the city.
Now it is mid-sized cities leading the urban charge. As well as Manchester, Leeds, and Birmingham, in the rest of Europe cities like Toulouse, Valencia, and Munich are becoming far more attractive places to live and steadily more prosperous as a result.
But what makes them popular is different that what’s good about mega-cities. Lower population densities, great inter-connectivity between neighbouring towns and cities, and access to the countryside or seaside: all the things people like about mid-sized cities point to a type of urban growth that is about connecting smaller towns and cities, rather than the centre dragging everyone along. Turns out, the future is regional.
UK2070 and the benefits of bigger regions
In May the UK2070 Commission, chaired by Lord Bob Kerslake, published its first report: Fairer and Stronger – Rebalancing the UK Economy. It presented evidence that most places outside London and the South East were not benefiting from London’s growth and unless action is taken regional inequalities are set to widen. Nothing new there.
Its proposals include a significant devolution of powers and funding. One important idea is to create four new ‘super regional’ economic development agencies who can develop place-based plans for their regions. (Creating these sorts of place-based plans is called ‘spatial planning’ or ‘spatial economic strategies’.)
The case the commission makes is very reasonable. Economic development functions such as inter-city transport, energy infrastructure, and business innovation need regional co-ordination and planning to work. Cities/city regions and LEP (Local Economic Partnership) areas tend to be too small for this, but national government is too distant.
The UK is the only developed country that doesn’t have any regional co-ordination or spatial planning at scale. But we know it works here. In the two places in Britain where spatial planning happens at scale – London and Scotland – the benefits are clear with higher rates of economic growth.
Spatial planning could work across England
Could it work elsewhere? The Royal Town Planning Institute and its partners recently published a report spelling out the possibilities of a regional planning approach in the North of England. It highlighted how a lack of information is one part of the problem. For example, while significant progress has been made by Transport for the North in determining and agreeing priorities for regional transport investment, this has been done with very limited evidence about:
- what the Northern economy will look like in the future
- what sort of economy and society people in the North want to create.
The international evidence shows that regional spatial planning can be a great way to mobilise citizens, private companies, investors, and public agencies behind a shared agenda for change.
To give a flavour of how regional planning would work in the UK the One Powerhouse initiative, supported by Sir Hugh Sykes and led by the RSA, has been working with a number of planning consultancies to develop prototype regional plans for the 4 English ‘mega-regions’:
These are only the start, showing what assets these regions have and how things like energy, transport, cities and towns can be linked together. We will publish more evidence. But we also want to start a conversation across the country about the potential of a regional approach.
Arguments against a regional approach are based on old ideas
Despite the evidence in favour of a regional approach, there are several arguments which are regularly cited to pour cold water on these ideas. But a lot of these old ideas don’t stack up.
Nobody wants another layer of elected politicians
Nobody is arguing there should be! Regional planning involves mechanisms for co-ordination and collaboration, but doesn’t need any ‘regional politicians’.
The changes can involve adjusting the priorities of existing officials and decision-makers rather than creating new ones. Where a level of democratic accountability would be valuable – for example, where large sums of public money might be involved – then classic board and partnership structures have a role. Or, we could move to more deliberative decision-making structures like citizens’ assemblies rather than create a new cohort of elected politicians.
There’s no public appetite for regions
Public attitudes about all forms of political decision-making are at an all-time low. The top-down imposition of regional institutions of course risks public distrust, but again this is to misrepresent the way regional planning can work.
Far from being imposed from on high, the best regional collaboration is built with consent from below. The One Powerhouse experience is testimony to this, as local stakeholders are coming together to support the initiative.
People in England don’t identify with big regions – they’re from Yorkshire, not the North or the Black Country, not the Midlands
Local identity is important, but to deny any sense of regional consciousness in the North, the Midlands or the South West is to misunderstand:
- the nature of our nested identities – we all have multiple identities
- just how deep regional resentment towards London actually is
We simply don’t have the evidence to support or deny our regional identities, let alone how it might change should we give citizens the opportunity to give voice to their concerns.
In one of the most interesting reports on regional democracy produced recently, this is exactly what We Share the Same Skies initiative set out to do. Their vision for Yorkshire is yet another example of the way in which regional planning could rejuvenate people’s trust in democracy.
Working to rebalance the UK economy is an important part of bringing people and politics back together and turning back the tide of populism. It’s clear that cities can’t do all the work. Thinking regionally is crucial element of this process too.
The growth of global mega-cities has slowed. We need to think in terms of bigger regions to drive productivity – Scotland and London show that it works.