Big-ticket projects will not solve the country’s economic dividesby Andrew Carter / August 29, 2017 / Leave a comment
Any day now, the government is expected to announce its decision on whether it will move Channel 4 operations out of London, as promised in its recent general election manifesto—with cities such as Manchester, Liverpool, Birmingham and Sheffield all in the race to become the station’s new home.
The pledge is a key part of the government’s plans for its upcoming industrial strategy, which it hopes will address one of the longest-standing issues in British politics—how to rebalance the national economy, or build “an economy that works for everyone,” to borrow one of Theresa May’s election slogans.
One of the most direct tools politicians have to tackle this problem is the ability to move public sector jobs around the country—hence the government’s plans for Channel Four (and its parallel manifesto promise to move other senior civil servant jobs out of the capital).
And with up to 800 jobs potentially up for grabs, it’s unsurprising that cities across the country are eager to be selected. With all of them making excitable claims of the “genuinely transformative” impact that moving the station could have both culturally and economically should they be successful.
However, a recent Centre for Cities report suggests that these places should not get too carried away about the economic benefits of hosting Channel Four—and that in particular, the impact on employment is unlikely to be significant beyond the jobs that the station would bring directly.
The report looks at the economic impact of the BBC’s relocation to Salford in 2011, which it was claimed would bring up to 15,000 jobs to the North West. Five years on, however, the outcome has been much less dramatic. The analysis shows that moving the BBC brought 4,600 new jobs to MediaCityUK, but that its impact on employment across the wider city region has been minimal.
Indeed, nearly a third of the jobs at MediaCity were a result of businesses moving from other parts of the city to be closer to the BBC—and as such, do not represent new jobs in Greater Manchester. When we take these out of the equation, the BBC’s move brought a disappointing number of jobs to the city region—equivalent to 0.3 per cent of total employment in Greater Manchester.
Of course, there are other good reasons to move public sector jobs out of London, from raising the profile and reputation of a place, to improving the cultural representation of cities and regions across the country. These are all noble and worthwhile goals. But if they are the ultimate ambitions of moving public bodies, then was should acknowledge as much, rather than justifying it on the basis of unrealistic economic targets.
Such public sector moves are similar to the idea of the grand project—big infrastructure projects like HS2 and HS3, expected to transform the economic fortunes of places, in this case in the North and Midlands. But the reality there is that making the buses and trains in these cities run more swiftly and reliably would have a much bigger impact in generating growth and job opportunities for local residents than expensive high speed rail links.
The significance placed on the relocation of Channel 4 and HS3 reflects a broader tendency among politicians to focus on big-ticket schemes aimed at boosting economic growth and prosperity, often at the expense of more everyday initiatives that could actually be more effective.
Ultimately, cities outside the Greater South East need to generate not hundreds, but many thousands of high-skilled businesses and jobs across a wide range of sectors. For that to happen, national and local leaders need to address the education, housing, skills and transport issues that hold back their economies—which should be a higher priority than initiatives which might grab more headlines.
If the government really does want to create “an economy that works for everyone” then it should deepen its commitment to devolution and hand cities more powers and responsibilities over their economies, building on the progress seen in recent years.
This would help places tackle the issues that have the biggest bearing on jobs, wages and growth in their local economies in an integrated way that reflects the challenges and opportunities they face. And would have a much bigger impact in spreading prosperity and growth to more places beyond the South East than focusing on big projects, as alluring as they are.