There has been a clear shift in government policy towards greater devolution of powers to cities and city regions, sparked by George Osborne’s June 2014 speech in Manchester, calling for a Northern Powerhouse: “Not one city, but a collection of northern cities—sufficiently close to each other that combined they can take on the world.”
A series of “city deals” between the government and local authorities has followed as the devolution agenda has rolled on. Alongside, the Government Office for Science had run a Foresight Project (including a series of events last year in Glasgow, Manchester, Bristol and Cambridge, jointly hosted with Prospect), intended to look 50 years into the future and ask what the cities of the future will be like and what conditions they will need to prosper. In order to discuss progress so far and look at the issues that lie ahead for the UK’s cities, Prospect recently assembled a group of experts from academia, public policy, politics, consultancy, industry and the financial sector for a wide-ranging round-table discussion.
A series of factors has conspired to bring devolution to regional cities to the forefront. Within England, London’s growth has left the national economy looking increasingly unbalanced. Seven of the eight leading English cities outside London now have economic output per head below the national average, while London pulls in wealth and talent from other parts of the country and well beyond. This process risks eroding the human capital of regional cities and fuels a London housing market that has priced out younger and less well-paid workers—not to mention contributing to other pressing problems such as poor air quality.
Allowed to continue unchecked, the gap between London’s economy and that of the country’s other major cities will soon become unbridgeable—social disparity is already the first or second problem cited by city leaders across the country, according to Alan Wilson, Professor of Urban Regional System at University College London.
Equally, political developments have made the issue of city governance and regeneration unavoidable, argued recently-elected Oldham MP Jim McMahon. “I think people in England are sick of hearing about Scotland, Wales and Northern Ireland and wondering 'what about us?’ There’s a sense that it can’t carry on as it is, with London overheating and other areas that can’t develop as they want to.”
Cities and city regions, therefore, are now regarded as the main lens through which to view national questions of economic development and political governance in the decades ahead although there was also a risk that this could lead to the creation of “super-cities” while others were left on the shelf, said Simon Bird, Associated British Ports Director for the Humber. But as well as inevitable competition between cities for resources and development, they are also likely to be at the forefront of competition between national economies. “What really worries me is the 136 new international cities which are going to enter the McKinsey Global 600 Index, some of which none of us will have heard of. That is the real threat to our cities,” said Sarah Whitney, founder of the consultancy Metro Dynamics.
In developing strategies to face these challenges, cities and city regions will have to tackle a web of interdependent issues, said Janet Miller, Cities and Development Market Director at Atkins. She argued that part of the problem was the tendency to look at these as distinct questions of transport, housing, technology, globalisation, climate change, an ageing population and so on, rather than trying to think about them in a more coherent way. Alan added that whichever facet of the question one looked at, changes in the size and make-up of the UK’s population will be at the heart of the process. He suggested that 25 years from now, the country’s population will have aged significantly as well as increasing by about 10m. “That’s going to force us to think about the housing agenda in a very different way because you’re not going to deal with 10m more people by building new estates on the fringe of cities.” Instead, the country would need to find ways of creating new communities of 50,000 or more people, “anchored into existing towns.”
Nigel Wilson, CEO of insurer Legal & General, argued strongly that with interest rates at zero or negative across much of the developed world there was no shortage of money to invest in regenerating cities. Nor was there a shortage of potential investments: “In every city we look at we see a huge number of brownfield sites and regeneration opportunities,” he said. Instead, the challenge was to identify projects large enough to make a big difference and to form effective working relationships with city leaders to get them moving. This would require effective local leadership and a willingness to push for major change. “Our cities are not over-built; they’re under-demolished. You’ve got to create critical mass in the centre of cities by smashing down loads of the old buildings and replacing them.”
However, while other speakers agreed that the quality of city leadership was critical they pointed to other challenges as well. The complicated structure of local governance also creates barriers to greater private investment, particularly the absence of “one front door” for private organisations to engage with instead of the multiple public sector organisations that need to be involved today. Development needed to take place in a larger, strategic framework set and controlled at the city level, said Jim McMahon. This in turn reflected the uneven way in which powers were being reallocated: “In Manchester health has been devolved, justice has been devolved, but education, which should be the foundation of economic growth, has been taken away from local authorities.”
Accountability of city leaders is vital but if we are to hold local leaders accountable for the success of their cities, they will need to control more of the money that is spent within them, said Sarah Whitney. Even by 2020, less than 10 per cent of the tax raised in regional cities would be controlled by their leaders—compared to 35 per cent in Germany, 50 per cent in Canada and 80 per cent in Tokyo. “If government really believes that cities are the future of this country and they need to be empowered to grow they need to have more control over income streams than they do at present,” she argued.
Closing the discussion, Mark Walport, head of the Government Office for Science, turned attention back towards the deeply interconnected nature of the questions that would determine the future of cities. “If you look at cities through the lens of transport then it’s all about railways and roads. If you look at them through the lens of housing then it’s all about houses. The challenge surely is to look at cities through the lens of the citizen,” he said. “And for citizens, cities are places where they’ve got to be able to live, to work and to have leisure.”
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This article is drawn from a roundtable discussion hosted at Prospect’s offices on Wednesday the 11th of May 2016 chaired by Prospect’s Andy Davis with Lord Adonis to explore the main themes contained in Prospect’s Future of Cities report. Prospect will be hosting further discussions on the subject of cities and devolution at the 2016 political party conferences. For more information on attending or becoming involved, please contact david.tl@prospect-magazine.co.uk.
