Another day, another report on the importance of cities outside London to Britain’s future prosperity. This time it comes from the City Growth Commission, a body formed last year to investigate “how other cities can complement London’s economic success; what political powers and governance arrangements are needed to deliver this; and how public service reform can enable other cities to become fiscally sustainable.”
The Commission’s latest report, entitled “Connected Cities: The Link to Growth,” focuses not on the political issue of enhanced powers for local government (the question de nos jours that I discussed in my recent piece about Manchester and on which both George Osborne and Ed Miliband have pronounced in recent weeks) but on infrastructure; specifically, on the importance of enhanced connections between what are sometimes called “second-tier” cities, especially the major cities of the north—Manchester, Leeds and Sheffield, which, between them, form a functional economic area roughly the size of London. (It’s worth noting, though, that the Commissioners recognise that you can’t fix the infrastructure problem without tackling the governance problem too: “[T]he city voice is currently weak in national policy making… Metros should be allowed to contribute more to the planning and delivery of local, regional and national infrastructure.”)
In the foreword to the report, the Commission’s chair, Jim O’Neill, former Chief Economist at Goldman Sachs, writes: “The notion of connecting lots of mid-sized cities to much faster (and affordable) transport is key to the idea of creating, from a commercial if not an administrative perspective, a metro area of comparable size to London.” Lurking in the background here are two artefacts of economic and statistical theory: one is Zipf’s Law which, when applied in urban theory, holds that the number of people in a city is inversely proportional to its ranking relative to other cities in a given country. In other words, the biggest city is about twice the size of the second biggest, three times the size of the third and so on. Britain, of course, deviates from the rule, with London having a population roughly four times those of the next two biggest cities, Greater Manchester and Birmingham. The other is the theory of “agglomeration economies” according to which larger economies increase productivity (see this report on agglomeration economies in Manchester to which O’Neill contributed).
The solution to this statistical anomaly? O’Neill says that central to the Commission’s thinking from the very start was improved “connectivity between the major northern cities via much faster train services.” In fact, work has already begin on the “Northern Hub“, a programme of improvements to the rail networks in the north of England that, when it’s completed in 2019, will see 700 more trains running each day and 44m more passengers using the network each year. The problem, as the report rightly argues, is partly one of coordination. Little thought appears to have been given to coordinating the building works for the Northern Hub with those for the second phase of HS2. Long-term planning is something Britain does particularly badly, and this is in part because decision-making has always been concentrated at the centre.
To remedy this, the Commission proposes devolving planning authority powers to city regions or “metros”. “Metros should have the power to convene relevant agencies and make planning decisions across all modes of transport,” the report argues, and they should also have much more influence on infrastructure decisions of “national importance”. In other words, you can’t tilt the balance of the economy to the cities and regions without redistributing power to them too. It’s a lesson that politicians of all stripes are, however belatedly, beginning to absorb.