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Our Cities Are Back

Competitive Cities
make
Prosperous Regions
and
Sustainable Communities

Third Report of the Core Cities Working Group

November 2004
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WHAT THIS REPORT IS ABOUT 1
This report is about the UK’s future economic growth and prosperity. It will be of particular
interest to all organisations and individuals concerned with urban and regional economic
growth and regeneration.

It makes a direct and unique contribution to the Government’s Public Service Agreement
Target aimed at improving the performance of all the English Regions and reducing the
persistent gap in growth rates between regions.

The report provides a fresh perspective on the economic roles of modern cities – evidencing
their pivotal role in creating prosperous regions and setting out a comprehensive action
plan for achieving a step change in the competitiveness of the largest English regional
cities, the Core Cities.

Competitive Core Cities are fundamental not only for driving up the economic performance
of regions but also for achieving wider policy goals about sustainable communities and
greater social cohesion. Competitive cities are vibrant places where people want to live –
and will come from many different backgrounds in order to do so.

The overarching title “Our Cities Are Back” highlights both the successful urban renaissance
in the Core Cities and the emergence of cities as pivotal links in the economic agenda for
securing Britain’s future prosperity.
2
Contents
Executive Summary 4
3
1. Core Cities – Powerhouses of the Knowledge Economy 7

2. What Makes Competitive Core Cities? 13

3. “Our Cities Are Back” 18

4. City-Regions: The Key Economic Building Blocks 24

5. Action Plan for Competitive Core Cities 29

■ Transport Connectivity 30

■ Innovation 32

■ Skills 33

■ Governance and Leadership 34

■ Public Realm Investment 35

■ Strategic Spatial Frameworks 36

■ City-Region Relationships 37

■ Economic Linkages Between London and the Core Cities 38

■ Learning from and with other European Cities 39

■ Making It Happen 40

■ Resources 41

6. Creating Sustainable Communities 42


4 Executive Summary
Chapter 1: Core Cities – Powerhouses of the Knowledge Economy
■ This report contains the results of work undertaken since 2002 to identify the economic roles the
major regional cities must play in a modern knowledge based economy and to recommend a set
of policy changes to deliver the full economic potential of these cities.

■ Over the past decade competitiveness in the world economy has undergone massive changes.
Advanced economies like Britain have focused increasingly on high value knowledge based
services and products. Developing countries have gained a competitive advantage in mainstream
manufacturing – and this advantage is now extending to routine service operations.

■ While the UK economy overall has enjoyed a period of unprecedented growth there is now a
widening competitiveness divide between the south eastern regions around London and all the
other regions.

■ Research evidence is increasingly demonstrating that major cities contain the key economic assets
for success in the knowledge economy. Cities effectively determine the performance of regions.

■ The Government has put a high priority on actions to improve the performance of all regions and
to reduce the persistent disparities between regions. This report makes a major contribution to
that objective by setting out a competitiveness agenda for the largest English regional cities –
the Core Cities.

Chapter 2: What Makes Competitive Core Cities?


■ Research specially commissioned for this report examined evidence from over 50 European cities
and concluded that there are six generic factors which underpin the most successful cities. These
factors are economic diversity; a skilled workforce; connectivity – internal and external; strategic
decision-taking capacity; innovative firms and organisations; and quality of life.

■ Although it is difficult to compare the performance of cities with one another, the research
shows clearly that the English Core Cities lag behind their counterparts in other EU countries
on most measures.

■ International businesses coming to Britain confirm that London and the south east currently offer
more attractive locations for their needs than the Core Cities and their regions.

■ But this position is not necessarily set in stone – there are clear examples of European cities which
have significantly improved their relative performance. However, improvement does require a
careful combination of supportive government policies and imaginative local leadership.
Chapter 3: “Our Cities Are Back” 5
■ Growing recognition of the pivotal role cities play in modern economies is now pushing cities to
the centre stage of national and regional policy agendas.

■ Core Cities themselves are now seeing the fruits of ambitious and innovative public realm projects
which are raising the profile and attractiveness of city centres as places to live, work and play.
These developments provide a strong foundation for actions aimed at improving economic
competitiveness.

■ Chapter 3 contains boxed case studies exemplifying the urban renaissance in each of the
eight Core Cities – Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham
and Sheffield.

Chapter 4: City-Regions – The Key Economic Building Blocks


■ The economic influence of larger cities extends much wider into the regions around them.
The exact range of this influence differs in terms of travel to work patterns, housing markets,
retail catchments etc. But economists increasingly now define ‘city-regions’ as the main drivers
of growth.

■ Economic city-regions rarely conform to established administrative boundaries. But experience in


many countries points to the advantages of informal collaboration across boundaries – rather than
attempting to identify formal boundary changes which could expect to meet all needs.

■ Major cities contain the principal economic assets and also the most productive businesses in the
main growth sectors. Improving the competitiveness of major cities will therefore strengthen the
regional economy as a whole – but more research is needed into the processes by which
competitiveness in cities systematically drives up performance in all parts of the region.

■ It is notable that the Northern Way Growth Strategy – published in September 2004 – puts its
principal emphasis on strengthening the economies of the main city-regions.

Chapter 5: Action Plan for Competitive Core Cities


■ The available evidence underlines the need to strengthen the competitiveness of the major
regional cities as a key step to improving the performance of regions. The eight Core Cities have
a major responsibility to work closely with Government and the Regional organisations to test
and develop actions capable of raising city competitiveness and ensuring that this benefits the
regions overall.

■ Having identified the key factors which underpin economic success in modern cities there is now
an urgency to develop an integrated action programme. But this work must progress in parallel
with further research to strengthen the evidence base about cities and city-regions. So the action
plan must continually evolve – there is no quick fix.
6 ■ The report sets out a range of actions which Core Cities – in partnership with Government and
the Regional organisations – will now take forward. These actions cover transport connectivity;
innovation; skills; leadership and governance; public realm investment; strategic spatial
frameworks; city-region relationships; economic linkages between London and the Core Cities
and learning from and with other European cities.

■ Chapter 5 contains boxes under each of these themes which detail the specific work which will
now be undertaken.

■ As with other strategic reports – for example the Northern Way Growth Strategy – the
propositions for action are not yet worked up to a level of detail where resource implications can
be attached. However, the strong priority given to improving regional performance in the 2004
Spending Review provides a positive context for ensuring that existing and new resources are
deployed to best possible advantage.

■ This whole agenda requires radical new approaches to many established policy areas – the
commitment and support of key Government Departments will therefore be critical if Core
Cities are to achieve their full potential.

Chapter 6: Creating Sustainable Communities


■ The focus of this report has been about increasing the competitiveness of Core Cities as a pivotal
lever for driving up the performance of regions. But the report concludes by looking beyond
this objective to the Government’s wider goal of creating sustainable communities in all parts
of the country.

■ Economic prosperity is critical for the sustainability of communities – large and small, urban and
rural. This is attested by the high priority being given to the Northern Way Growth Strategy, now
being followed by similar initiatives in other distinctive areas of England.

■ Just as major cities possess the key economic assets so they also provide the principal focus for
all communities in a region to access, adapt to, and benefit from ongoing changes in the wider
world community. So the Core Cities agenda now needs to look ahead from the competitiveness
agenda itself to the challenging context of using competitiveness to progressively build
sustainability in all communities. Although this report essentially focuses on the economic
role of cities, this final chapter sets a wider goal – of ensuring that growing competitiveness
is translated into growing community sustainability.
1. CORE CITIES – The Core Cities currently comprise Birmingham,

POWERHOUSES OF THE Bristol, Leeds, Liverpool, Manchester, Newcastle,


Nottingham and Sheffield.
7
KNOWLEDGE ECONOMY
The alliance between these particular cities flows
This chapter describes: from a recognition that if regional cities overall
are to achieve their full potential, the largest cities
■ How the Core Cities have highlighted a
must be seen to pioneer the most effective ways
new ‘cities agenda'.
of reaching that goal.
■ How the Core Cities Working Group has
advanced this agenda. The Core Cities Working Group
■ How Britain’s overall competitiveness in In 2002, the Core Cities asked the Government
the world has changed. to set up and lead a high level group to identify
a set of practical actions aimed at raising the
■ Why this change has widened disparities
competitiveness of the Core Cities and enabling
between regions.
them to function effectively as drivers of growth
■ Why Core Cities are critical for for their regions.
competitiveness today.
The Core Cities Working Group – comprising
■ How Core Cities are key elements of the
representation from ODPM, HM Treasury, DTI,
Government’s regional policy.
the Government Offices for the Regions, the
Core Cities, and the Regional Development
Collaboration between the Agencies (RDAs) – was set up in April 2002 with
Core Cities the following terms of reference:

Since the mid-1990s the principal Core Cities in


“To make recommendations for policy
the English Regions have been working together
changes and practical actions to enable the
to develop the distinctive role which major cities
major regional cities to fulfil their potential
must play in national and regional life if Britain’s
as drivers of the urban renaissance and the
overarching goals for sustainable growth and
economic competitiveness of their regions and
greater social equity are to be achieved.
thereby strengthen the national economy’s
capacity for growth.”
This collaboration was driven by growing
recognition that public policy in the UK needed to
This is the Working Group’s substantive and final
take full account of emerging evidence about the
report. It fulfils the terms of reference. The next
pivotal economic role of major cities in modern,
phase of work on cities will require different
knowledge based economies. At that time policy
arrangements, and these are described later in
towards cities was still largely shaped by remedial
this report.
actions aimed at countering the consequences of
downsizing in traditional industries.
8
A key feature of this report is the opportunity for him at the Core Cities Summit in Newcastle in
readers to access more detailed background June 2003.
documents on the ODPM and Core Cities
websites. These documents include the full It is important to recognise that these
reports on Transport Connectivity, Innovation, Prospectuses are not ‘set in stone’. Each Core
Skills, and Governance and Leadership prepared City is continually developing its role within its
by expert groups led by individual Core Cities. region – the Prospectuses could only therefore
capture the position in mid-2003.
The Working Group’s approach
Each Core City will evolve its Prospectus to
From the outset the Working Group recognised
meet its particular circumstances. The further
the need to base its analysis on a full evidence
development of these Prospectuses will be a
base. Given the gaps in the existing research
key mechanism for implementing the action
base regarding the economic role of cities and
programme which flows from this report.
their relations with regions the Group has
commissioned specific additional research. The
National competitiveness in a
Group is particularly grateful to ODPM for fast
changing world
tracking these research requirements in its own
funded programme. Over the past decade Britain has enjoyed an
unprecedented period of growth and prosperity.
The Working Group has systematically addressed The economy not only grew strongly through the
a wide-ranging and novel agenda. At each stage global expansion of the 1990s but has proved
it has been necessary to embed the progress in more resilient than its main competitors in
relationships within Government, in all the Core navigating the uncertainties of the present
Cities and across the RDA network. Along the decade. Commentators point to the record of
way the Group has produced two interim reports stable macro-economic policy as the key strength
– in October 2002 and June 2003. These are – which now provides a powerful platform for
available on the Core Cities and ODPM websites. further growth. Figure 1 compares GDP per head
This final report builds on, but does not attempt in the United Kingdom with other major world
to repeat in detail, the Group’s analysis and early economies.
conclusions contained in the interim reports.
However, Britain’s international competitiveness
Core Cities Prospectuses over this period has been fundamentally
influenced by seminal changes in the global
In addition to the interim reports from the Group,
economy which have had major implications for
each of the Core Cities produced an outward and
the relative competitiveness of many countries.
forward-looking Prospectus describing the City’s
Technological advances, removal of trade barriers,
economic strategy and how this will contribute to
major shifts in consumer preferences and the
regional and national growth.
migration of routine functions to developing
countries which can offer more competitive cost
The production of these Prospectuses was
structures, have all had major impacts on Britain.
requested by the Deputy Prime Minister and the
completed documents were formally launched by
Figure 1: Comparison of GDP per head in G7 countries, 1973–2002

(Average annual per cent change)


9
3.5%
1973-1979
3.0%
1979-1989
2.5%
1989-2002
2.0%

1.5%

1.0%

0.5%

0.0%
UK Germany US Canada France Italy Japan EU OECD

(Source: OECD)

As a result Britain’s competitiveness is now unparalleled in recent times. However, these


increasingly dependent on being successful in positive statistics mask an increasingly worrying
the ‘knowledge economy’ – using high levels trend of regional divergence in the underlying
of knowledge input to create added value in competitiveness factors. This is an important
both services and manufactured products. issue because it affects the ability of regions to
compete successfully in the future.
Changes in national
competitiveness is Analysis of the competitiveness factors show that
posing a challenge for London and the south eastern regions are
the English Regions accelerating away from the rest. This process has
developed a self sustaining momentum –
Britain’s overall economic success in the global
‘sucking’ many of the ambitious and talented
‘knowledge economy’ has had differing
into the capital city. Unless this momentum can
consequences across the regions. London’s
be slowed and then reversed there is a real
position as a front rank global city has been
danger that national growth will be held back by
enhanced, reinforced by its dominant position in
a combination of over-heating in the South East
world financial markets. The success of London
and under-performance elsewhere.
has powered the growth and prosperity of the
regions round the capital, as more and more
Figure 2 shows the differing regional
people and businesses seek locations in the south
performance in GDP growth since 1990. The
east with access to London and Heathrow Airport.
second half of this period, from about 1995
onwards, marks the time when Britain’s economy
Over the past decade all the other regions have
was progressively adapting to the global changes
experienced tangible economic gains – more jobs,
described above – and when regional growth
lower unemployment and higher living standards.
disparities started to widen markedly.
This represents a significant success story
10 Figure 2: Regional variations of GDP per head, 1990 and 2002
£25,000

£20,000

£15,000

2002
£10,000 1990

£5,000

£0 East Midlands

London
North West

East England

South East
North East

& Humber

South West
West Midlands

England
Yorkshire

(Source: ODPM)

Given the increasing significance of the ‘knowledge The nature of Britain’s economy has always put a
economy’ for Britain’s competitiveness, the current premium on the effectiveness of communications
concentration of research and development with the other major world economic centres.
(R&D) expenditure in the south eastern regions is The advent of the ‘knowledge economy’ has
particularly significant for understanding the further emphasised the particular importance of
underlying regional disparities. Figure 3 air connectivity. This is because the pressures of
compares regional R&D expenditure in the more competitive and demanding markets has
business, tertiary education and Government sharply increased the need for face-to-face
sectors in 2000. interaction at all stages of the design, production,

Figure 3: R&D expenditure per 10,000 inhabitants by region and sector, 2000

£900 Government Expenditure


£800 Higher Education Expenditure
£700 Business Expenditure

£600

£500

£400

£300

£200

£100
£0
North West
East Midlands

London
South East

North East
South West

West Midlands
East

& Humber
Yorkshire

(Source: ONS)
Figure 4: Passenger volumes in English Airports, 2002
70,000,000
11
60,000,000

50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

Bournemouth
Gatwick

Manchester

Stansted

Birmingham

Luton

Bristol

Newcastle

East Midlands

Liverpool

Southampton

Humberside

Norwich

Exeter

Blackpool
Heathrow

Leeds Bradford

Teesside
(Source: Data from CAA)

marketing and buying processes. “International of 3-4% in southern regions, but only 2% (and in
airports and business travel play crucial roles in some places as low as 1%) in the northern regions.
contacts between producers and consumers and
in knowledge transfers. The relative significance Competitive Core Cities
of such contacts emerged strongly from are critical for regional
measuring the numbers and destinations of performance
business travellers from the international airports
The rise of the ‘knowledge economy’ has brought
to all our case study cities.” (from “Innovative
about a fundamental reappraisal of the economic
Clusters and Competitive Cities” by James
role of major cities. Historically the profile of cities
Simmie et al, 1999)
in national policy has been principally dictated by
the need to address the very significant, and very
Figure 4 shows the distribution of passenger
visible, environmental and social consequences
numbers at English airports in 2002. The
flowing from the decline and disappearance of
concentration on London area airports is even
large scale traditional industries.
starker if only scheduled flights (i.e. those
habitually used by business travellers)
But recent research into the performance of
are compared.
advanced economies has highlighted the pivotal
role of post-industrial ‘core cities’ as the key
Economic forecasters are not sanguine about the
drivers of regional and national economies.
prospects for regional convergence. For example
Successful core cities exploit their unique
the most recently published report by Experian,
portfolio of knowledge economy assets,
in August 2004, predicts that “although the UK
developing distinctive roles and gaining
economy will continue to be one of the most
international reputations.
successful in Europe it is also the most regionally
divided”. Experian forecasts continuing growth
12
These assets focus on knowledge institutions, policies committed to improving competitiveness
clusters of market leading businesses, pools of and quality of life in all regions.
highly qualified people, communication hubs,
concentrations of cultural activities, and a wide Significant new regional institutions have been
range of lifestyle options. established – RDAs charged with producing and
implementing Regional Economic Strategies and
The term “ideopolis” has been coined to describe Regional Assemblies now charged with
both the concept and potential of modern developing Regional Spatial Strategies. More
core cities: functions have been devolved to Government
Offices for the Regions. There is now the
“Ideopolis represents a 21st century opportunity to move to Elected Assemblies
metropolitan version of what we first saw in Regions which support this step.
in Italian renaissance city-states. The key
elements are the airport, the university and The Sustainable Communities Plan provides a
the capacity to create new ideas which are strategic framework for joining up and focusing
then sustained by buoyant demand, the full range of Government policies and
intellectual capital and business self- resource streams to bring optimal advantages
confidence.” (W Hutton, “Put Cities in to people’s everyday lives. Earlier in 2004 the
Charge”, The Observer, 7 July 2002) Government invited the RDAs in the North and
the Midlands to develop overarching Growth
While London has demonstrated its core city Strategies designed to raise the international
capability on the world stage – and has created profile and performance of these distinctive areas
high levels of prosperity in its surrounding – the Northern Way and the Midlands Way.
regions, the same is not yet true of the Core Consideration is being given to similar proposals
Cities in their regions. Research undertaken by for other areas such as the South West.
the Core Cities themselves in 1999 – “Core Cities:
Key Centres for Regeneration” – showed The Government has also committed itself to a
unambiguously that the Core Cities are lagging major re-engineering of the processes of public
behind their counterparts elsewhere in Europe. administration – including relocations of public
But Core Cities must succeed if the under- service functions from London and the South East
performing regions are to move up the to other regions (the Lyons Review). The Core
international league table of regions and close Cities have a particular interest in supporting plans
the current disparities within Britain. to move higher level functions out of London and
in ensuring that this Lyons goal continues to have
The Working Group’s interim reports assess the a clear priority within the wider framework of
evidence about the economic role of modern improved efficiency within the public services.
cities in greater detail.
The Regional Performance
The Government’s approach Public Service Agreement
to regional policy Target
The Working Group has operated within a The objectives and profile of the Government’s
strongly supportive context of Government regional policies was substantially sharpened in
2002 with the announcement of a demanding 2. WHAT MAKES
Public Service Agreement (PSA) Target – for which
responsibility lies collectively with HM Treasury,
COMPETITIVE CORE 13
ODPM and DTI – aimed at improving policy CITIES?
cohesion and co-ordinated action to:
This chapter describes:
“Make sustainable improvements in the
■ The key messages from a major new
economic performance of all English regions
study into the factors which make for
and over the long term reduce the persistent
successful cities in today’s knowledge
gap in growth rates between the regions,
economy.
defining measures to improve performance
and reporting progress against these ■ How the Core Cities currently perform in
measures by 2006.” relation to the most successful regional
cities in Europe.
The work undertaken by the Team responsible
■ How international investors in the UK see
for this PSA Target has brought significant
the Core Cities and their regions.
advances in:
■ How individual cities have improved their
■ Developing the robustness of the evidence relative performance.
base about the causes of regional disparities.

■ Producing an integrated action plan to drive Evidencing the economic role


up productivity in all regions. of modern cities
■ Providing a systematic regional agenda as an One of the Government’s goals in regional
integral part of the 2004 Comprehensive economic policy is to strengthen the evidence
Spending Review. base on which policy and spending decisions are
taken. The Working Group found that while
■ Raising the profile of the regional agenda
existing evidence about competitiveness and
across all Government Departments and
economic performance in modern cities is
Agencies.
convincing at a general level, it lacks the detailed
focus necessary for policy formulation.
The PSA Target Team and the Core Cities
Working Group have shared each other’s
The Group therefore decided to commission
evidence base and jointly discussed the key
additional research material to fill this gap.
issues. As a result the PSA Team recognise that
action to improve the competitiveness of the
This Chapter summarises the outcomes of two
Core Cities has a distinctive part to play in
commissioned research studies – one into
achieving the regional performance target.
comparisons between European cities and the
Similarly the Working Group recognise the
Core Cities, and the other into how knowledge
responsibility on them to develop an action plan
economy investors currently differentiate the
which is accepted by regional stakeholders as
English cities and regions.
critical for their own objectives.
14
“Competitive European Cities: functions. Cities are the pace setters for
Where do the Core Cities Stand?” knowledge economies and therefore the
availability of a skilled workforce is a
“Competitive European Cities: Where do the
fundamental requirement. Comparative
Core Cities Stand?” is a report to ODPM from a
data shows a strong relationship between
research team led by Professor Michael Parkinson
innovation and GDP levels and workforce skills.
at the European Institute for Urban Affairs,
Liverpool John Moores University. ■ Connectivity – internal and external.
The most successful cities have the physical
The project examined the experience of over 50 and electronic infrastructure to move
European cities – undertaking detailed studies of goods, services and people quickly and
15 and doing fieldwork in 9. The objectives efficiently. They also have efficient external
were, first, to identify the factors which appear to communications – particularly by air – to
underpin successful cities in today’s knowledge ensure their comparative advantages in export
economy, and, second, to compare the current markets. There is also a ‘cultural connectivity’
performance of the English Core Cities against dimension – successful EU cities put major
the most successful EU cities. emphasis on developing external relationships
and on building their international profiles.
The full research report was published by ODPM
■ Strategic decision-taking capacity. The
in January 2004.
importance of this factor is matched by its
relative intangibility. Processes of strategy
The critical factors for
development and implementation, networks
competitiveness in cities
and relationships between key players in
The research concluded that there are six critical public and private sectors, political leadership
factors for cities: in making effective alliances at national and
regional levels, and the ability to sustain
■ Economic diversity. Successful cities need commitment and motivation for the long term
to be versatile in responding to economic are all critical. These factors help to explain
change in the world around them. The the recent substantial progress which Turin
most successful EU cities therefore possess has made in moving from an economy (and
strengths in breadth as well as in depth across a society) dominated by single company car
a range of both service and manufacturing manufacturing to a much more diversified
functions. Munich’s economy – often referred economy containing a wider range of
to as ‘the Munich mix’ – is an exemplar of innovative functions. There appears to be a
diversity. By contrast, cities which have link between the strength of local decision-
become dependent on a single sector – taking and the levels of devolved autonomy
whether in the ‘old’ or ‘new’ economies – pertaining in the EU cities examined.
are much more vulnerable to changes in the
■ Innovation in firms and organisations.
structure of external markets.
Knowledge and innovation are two of the
■ Skilled workforce. Knowledge economies most significant differentials in the economic
depend critically on the supply of skilled performance of modern cities – accounting
workers – for both service and manufacturing for more than 40% of GDP differences
according to the EU Commission. The Only Bristol (34th) and Leeds (43rd) are in the
15

efficiency of the ‘local innovation system’ is top 50 European cities for GDP per capita.
crucial in determining the value delivered by (See Figure 5)
investments in physical knowledge-based
infrastructure, research, education, innovation Figure 5: GDP per Capita 2001
and labour productivity. Toulouse and
Rank City Euros per Capita
Stuttgart stand out as exemplars of differing
1 Frankfurt am Main 74,465
local innovation systems.
2 Karlsruhe (Germany) 70,097
■ Quality of life. Skilled workers and their 3 Paris 67,200

families make informed choices about where 4 Munich 61,360

they will live. The research highlighted the 5 Düsseldorf 54,053


6 Stuttgart 53,570
extent to which cities which possess – or are
7 Brussels 51,106
actively creating – distinctive environments,
8 Copenhagen 50,775
architecture, culture and housing options are
9 Hanover 47,223
successful in attracting a critical mass of highly
10 Hamburg 43,098
qualified knowledge workers.
11 Mannheim 41,674
12 Nuremburg 41,456
Comparing the English Core 14 Augsburg (Germany) 39,360
Cities with their Continental 14 Cologne 39,108
counterparts 15 Amsterdam 38,203
16 Münster (Germany) 38,149
The scale of this study meant that the researchers
17 Wiesbaden (Germany) 37,454
had a very considerable volume of evidence from
18 Dublin 36,591
which to draw their overall conclusions. Their 19 Vienna 36,572
assessment was that: 20 Stockholm 35,733
21 Gelsenkirchen (Germany) 35,688
“Not all Continental or English cities do equally 22 Helsinki 35,322
well – or equally badly – in every aspect of 23 London 35,072
competitiveness. And the Core Cities have 24 Bremen (Germany) 35,022
improved their performance in recent years. 25 Edinburgh 35,018

But the big picture is clear. Many Core Cities 26 Bonn 34,112

lag behind their competitors in terms of GDP, 27 Antwerp (Belgium) 33,090


28 Milan 32,122
innovation levels, education levels,
29 Glasgow 31,893
connectivity, social cohesion, quality of life,
30 Utrecht 31,712
political capacity and connections with their
31 Saarbrücken (Germany) 30,368
wider regions. Crucially, they lag in the eyes of
32 The Hague 30,110
international investors. This position is made
33 Essen (Germany) 29,760
worse by the fact that European cities do not 34 Bristol 29,437
perform well by today’s global standards.” 35 Lyon (France) 28,960
36 Bologna (Italy) 28,282
The following key findings selected from the 37 Bochum (Germany) 27,900
study report illustrate the gap the researchers 38 Parma (Italy) 27,491
are describing: 39 Dortmund (Germany) 26,548
16
■ The most successful Continental cities
Figure 5: GDP per Capita 2001 – continued
significantly outperform the average for their
Rank City Euros per Capita national economies – standing out as drivers
40 Rotterdam 26,227 of growth. But of the English Core Cities only
41 Strasbourg (France) 26,015 Bristol out-performs the UK average.
42 Florence (Italy) 25,693 (See Figure 6)
43 Leeds 25,619
44 Duisburg (Germany) 25,259
■ On the Healey and Baker city surveys –
45 Eindhoven (Netherlands) 25,226
commonly accepted as a robust measure of
46 Turin 25,042
cities’ attractiveness for business investment –
47 Toulouse 24,852
only Manchester gets into the top 20.
48 Rome 24,766
49 Bordeaux 24,252
(See Figure 7)
50 Malmo (Sweden) 24,233
51 Gothenberg (Sweden) 24,065 How investors differentiate
52 Grenoble (France) 24,026 English cities and regions
53 Verona 23,954
The Working Group has explored the range of
54 Berlin 23,428
research evidence about the catalytic role of
55 Marseilles 22,809
56 Birmingham 22,069
international businesses on local competitiveness.
57 Manchester 22,099 Given the significance of such businesses in local
58 Newcastle-upon-Tyne 20,499 and regional economies, the Group took advice
59 Lille 20,191 from UK Trade & Investment about attitudes to
60 Barcelona 18,449 different locations in the UK. This revealed some
61 Liverpool 16,466 important messages:

(Source: Barclays Bank, 2002)

Figure 6: Urban and National GDPs

€80,000 (GDP per capita (Euros) 2001)

€70,000

€60,000
Country
€50,000 City
€40,000

€30,000

€20,000

€10,000

€0
Frankfurt

Munich

Stuttgart

Dortmund

Copenhagen

Stockholm

Helsinki

Milan

Lille

Bristol

Leeds

Birmingham

Manchester

Newcastle

Liverpool
Amsterdam

Rotterdam

Barcelona
Lyon
Turin

Toulouse

(Source: Barclays Bank, 2002)


The UK continues to be an attractive location
17

Figure 7: The best cities to locate a
for new direct investors – 2003-2004 saw a
business today
14% rise in investment projects, as compared
with only a 2% rise in Europe as a whole. City 1990 2001 2002
London 1 1 1
■ But in recent years the trend has been for Paris 2 2 2
investment projects to be smaller, focussed on Frankfurt 3 3 3
IT and research, and to concentrate more in Brussels 4 4 4
southern regions. Amsterdam 5 5 5
Barcelona 11 6 6
■ Feedback from investors highlights significant
Madrid 17 8 7
market factors which work in favour of
Milan 9 11 8
southern regions – international connectivity,
Berlin 15 9 9
better broadband, better property and more Zurich 7 7 10
IT skills. Munich 12 10 11
Dublin - 14 12
■ But investors also highlight the ‘reputation’
Düsseldorf 6 17 14
of London and the south east as an attractive
Stockholm 19 15 14
and vibrant place to live.
Geneva 8 12 15
Prague 23 22 16
Although these factors have recently worked to Lisbon 16 16 17
the disadvantage of Core Cities and their regions Hamburg 14 18 18
they do also provide clear signals about the Manchester 14 14 19
advantages to be won if Core Cities and Lyon 18 20 20
Government can work together to create the Glasgow 10 19 22
conditions which such investors are seeking. Rome – 25 22
Vienna 20 23 23

In order to further refine these general messages Copenhagen – 24 24

the Working Group also commissioned a specific Budapest 22 22 25


Warsaw 25 27 26
study by Professor Philip McCann of Reading
Helsinki – 26 27
University to provide additional analysis of the
Athens 22 29 28
factors influencing investors’ locational choices.
Oslo – 28 29
This report:
Moscow 24 30 30

■ Confirmed and exemplified the overall picture (Source: Healey and Baker European Cities Monitor, 2002)
presented by UK Trade & Investment.
■ Concluded that the growth of the knowledge
■ Demonstrated the fundamental mobility of
economy has given the UK economy a
people, organisations and capital in a modern
systematic centre-periphery character which
knowledge economy – a key consequence of
will require transformational remedies in order
which is to reinforce trends towards clustering
to change.
in places of perceived advantage, thus further
embedding perceived disadvantages in other
places.
18
■ Highlighted the need to significantly improve Third, the need for supportive national policies
the connectivity of the Core Cities and their is fundamental. France is a notable example of
regions by enhancing both inter-regional and how a previously centralised state system is now
international transport links. Such steps could actively supporting the development of strong
work to even out property price differentials regional cities.
and bring about stronger flows of capital and
labour into the cities and regions away from But, fourth, everything ultimately depends on the
the south east. commitment and capability of cities themselves
to shape their own destinies. There can be no
But cities can help themselves substitute for this.
to change
Both the Parkinson and McCann studies
significantly increase current understanding about
3. “OUR CITIES ARE
the scale and nature of the challenge the UK faces BACK”
in raising the performance and profile of the Core
Cities to the levels already being achieved by This chapter describes:
counterparts in our competitor countries.
■ Why the term “Our Cities Are Back”
is both a recognition of progress
But the Parkinson study concluded by underlining
and a reminder of the scale of the
that the standing of cities at any particular point
challenge ahead.
in time is not set in stone. Cities can and do
change – sometimes with spectacular results. ■ The key features of the renaissance which
is now under way in the Core Cities.
First, cities can improve their relative
■ Case study examples of flagship projects
competitiveness. Fifty years ago three of the most
which are making each of the Core Cities
successful EU cities – Frankfurt, Munich and
more attractive places to live and work.
Stuttgart – lay in ruins. More recently cities such as
Barcelona and Helsinki have achieved significant
comparative advances – crucially by different and Cities are now centre stage
distinctive approaches which have emphasised,
The landmark research study “Competitive
respectively, what can be achieved through urban
European Cities: Where do the Core Cities
renaissance and knowledge economy routes.
Stand?” (described in the previous section) put as
the heading to its first chapter the words “Cities
Second, there should not be any tension between
are back”. This single phrase encapsulates the
goals for competitiveness and social inclusion.
wide range of issues which the Working Group
The best performing cities were concerned to
has been addressing since 2002.
implement effective social inclusion policies
– notably by building self-reliance through
■ Cities are back – they are now acknowledged
education and training. The best performing
as the driving forces of modern knowledge
cities often have the lowest rates of
based economies, the powerhouses for
unemployment.
competitiveness in advanced countries
throughout the world.
Cities are back – in Britain, cities are becoming “Our eight Core Cities have undergone a
19

recognised by policy makers as critical renaissance. A new confidence is evident


economic assets, replacing their earlier in the growth of these cities, where the
reputation as repositories for the legacies skylines are now dominated by cranes and
of industrial decay. internationally acclaimed new buildings.”

■ Cities are back – there is now clear evidence


“The Core Cities are leading the way in
that the English Core Cities have embarked on
creating sustainable communities, improving
a strong urban renaissance and are building
the quality of life of their citizens and reviving
distinctive and attractive reputations as places
local economies.”
to live, work and play.

But “Core Cities have been laying strong


foundations for success through record
■ Cities are back – the scale and nature of the
investment, record levels of jobs, new
current competitiveness gap between the
confidence for people to live and work in
Core Cities and their Continental counterparts
cities, and improved local leadership.”
defines the responsibility now on the Core
Cities themselves, with appropriate support
The Core Cities revolution
from Government and regional partners,
in action
to raise their game substantially in the
decades ahead. The boxes below give graphic examples of the
iconic urban renaissance and public realm
This chapter looks at how Core Cities are already investment which is transforming the profiles of
demonstrating their ability to enhance their the Core Cities and enhancing their reputation
reputations through urban renaissance. among investors, the media, policy makers,
knowledge workers – and, not least, among
“There’s a quiet revolution taking their own citizens.
place in our leading cities”
Core Cities fully recognise that these welcome
This fundamental reappraisal of the role of cities
developments have to be the front end of a
– and in particular the Core Cities – in British
wider renaissance which progressively and
economic policy was formally recognised
systematically extends advantages to cover all
and celebrated by the Government with
areas and all communities. But it is undeniable
the publication of “Making it Happen: A Tale
that the progress now on view could not have
of Eight Cities” in April 2004.
been imagined only a few years ago.

The Deputy Prime Minister began his Foreword


with the key statement “There’s a quiet
revolution taking place in our leading cities”
and the text went on to highlight the key
components of this revolution:
20 Birmingham – Going For Growth
© Marketing Birmingham

During the last decade, Birmingham has experienced a remarkable renaissance


focused upon the city centre. The latest step in this renaissance is the BullRing.
The development is one of the largest city centre regeneration schemes in Europe,
covering the area of 26 football pitches. Over £500 million was invested to
replace a tired retail destination with a modern complex, bringing with it top
quality shops, boutiques and restaurants. The redevelopment has created more
than 8,000 jobs, and includes a futuristic Selfridges store, a new square and
redeveloped indoor and outdoor centres.

The BullRing has been honoured by winning an Urban Land Institute (ULI) Europe Award, representing excellence
in property development and regeneration. At the same time, the city was also granted another ULI Europe
Award for the Brindley Place development. It is believed that this is the first time that an English city has won
these coveted awards.

As well as continuing the economic renaissance based around the city centre and expansion of Birmingham
International Airport, the city has started work with surrounding authorities to bring forward proposals to ensure
that growth is spread evenly across the city-region. These proposals focus upon the concept of the Birmingham
city-region as an additional growth area under the Sustainable Communities Plan, and were presented in outline
at a city-region Summit in June. The Black Country has already begun work through its Black Country Study.
Birmingham (and possibly Coventry) will now undertake parallel work to develop an integrated Growth Area
agenda.

Bristol Harbourside
© www.bristo-city.gov.uk

Over the past ten years, Bristol’s distinctive and historic harbourside has been
transformed into one of the most beautiful and vibrant waterfront locations
in Europe.

Today it is a hub of cultural and tourist attractions, including the internationally


recognised Arnolfini and Watershed arts centres, Brunel’s famous SS Great Britain
and @t-Bristol – a unique visitor destination bringing science, nature and art to life.

Thanks to imaginative and innovative redevelopment, this former industrial dockland is now the ideal place to
eat, drink or simply relax. Contemporary waterfront housing and office developments have also made it one of
the most sought after locations to live and work.

Crest Nicholson has recently commenced work on an exciting £240 million development at Canon’s Marsh on
North Harbourside. The 100,000 square metre scheme over 19 acres of land will feature a new headquarters
building for the Clerical & Medical Insurance Group and other offices; new leisure facilities including a Marks &
Spencers foodstore; bars, cafes and restaurants; a hotel; and up to 460 new homes. In addition, the scheme will
provide new high quality public spaces and promenades and mooring facilities in the harbour.
Leeds City Centre – Public realm improvements
21
© Leeds Initiative

Significant recent improvements in the public realm in Leeds include the


transformation of City Square, an important public space at the heart of the city.

The flagship Millennium Square project has created one of Europe’s most
innovative and impressive civic spaces. Millennium Square has become the city’s
prime event space and will be home to the new Carriageworks Theatre and City
Museum for Leeds.

Building on the critical mass of city centre assets is a priority for Leeds. For example, a long term regeneration
programme led by Leeds City Council and Yorkshire Forward is to establish a new identity for the Holbeck area
as a distinctive city centre location. Once perceived negatively as run down, and isolated by canal and rail routes
from the city centre, this ambitious programme will allow the city centre to ‘grow’ into a new community with
its own unique character.

The vision for Holbeck Urban Village is to establish a genuine mixed use quarter where residential use
dominates, but which is underpinned by a vibrant business community promoting the creative and digital media
sector in Leeds. The quality of Victorian industrial architecture in the area is an important asset that the urban
village will build upon to combine the strengths of the old with the best in contemporary design.

Central Liverpool
© Grosvenor Henderson

Liverpool’s urban renaissance encompasses the whole city but has particular focus
in the city centre. The European Capital of Culture 2008 designation and World
Heritage Site status for the waterfront are helping to accelerate the city’s
transformation into a national and international destination centre.

The Paradise Street development is one of Europe’s largest city centre regeneration
schemes and will re-establish Liverpool as a top national and regional retail
destination. Developers Grosvenor are investing £800 million in creating over
1 million square feet of new city centre retail space which will incorporate three flagship department stores, in
addition to some 90 shops, residential and leisure units, quality public spaces and a new bus station. A £75
million investment in the Met quarter, also under construction, will add to the city’s new enhanced retail offer.

Major commercial developments, accompanied by high quality public realm and infrastructure improvements
are adding to the attractiveness of Liverpool’s office quarter as a quality, modern business location. Four major
schemes: at 101 Old Hall St; City Square; Unity; and St Paul’s will deliver 1.75m square feet of new high quality
office space, mixed uses and new public realm by 2006.

City centre living is now firmly established in Liverpool and is making a major contribution to re-animating the
centre. 6500 new apartments were delivered between 1997 and 2003. The city centre residential population is
forecast to grow to 20,000 by 2010.

A variety of projects are enhancing Liverpool’s internationally renowned river frontage. The Kings Waterfront
development is set to deliver an arena, conference facilities, hotels, residential and leisure uses. A Cruise Liner
facility at the Pier Head will be operational by 2005, enabling major cruise liners to bring 40 big ships into the
Mersey each year, opening up a new luxury cruise gateway for international visitors to the North West.
22 Manchester’s Millennium Quarter
© Manchester City Centre Management Co. Ltd.

The development of the Millennium Quarter has been a key


component of the rebuilding of Manchester city centre,
introducing a broad range of new uses and activities within a high
quality environment. The historic Corn Exchange has been
brought back to life as the Triangle shopping centre, Maxwell
House has been re-invented as the Printworks cinema and leisure
complex and magnificent, award winning, landscaped space has
been created at Exchange Square and Cathedral Gardens. These
public realm works and the construction of a new pedestrianised shopping street, New Cathedral Street, have
made fundamental improvements in the physical environment and the integration of the Millennium Quarter
with the rest of the city centre.

As well as high quality retail developments this area provides a number of educational, cultural and leisure assets
such as Chetham’s School of Music, the Cathedral and the MEN arena. A striking new glass fronted building,
already a well-known city landmark, houses Urbis, an exhibition centre exploring life in the modern city.

The Millennium Quarter is an important regional and local gateway to the city centre and beyond, containing
the Victoria mainline railway, Metrolink stations and the Inner Relief Route, which forms the area’s northern
boundary and links the major highways converging on the city centre. A new bus/tram/car transport
interchange is under construction at Shudehill and will support the regeneration of the Northern Quarter, which
is supplemented by a major redesign and expansion of the Arndale Centre.

The Grainger Town Project – Newcastle upon Tyne


© Newcastle City Council

Grainger Town is the historic heart of Newcastle city centre. Its name is a
testament to the architect Richard Grainger, who, in the 19th century, created
a town based on three elegant streets of ‘Tyneside Classical’ architecture.

In 1992, the area was in a state of serious decline. A bold regeneration strategy
was developed, leading to the commencement of the Grainger Town Project
in 1997, to re-establish Grainger Town as a dynamic and competitive city
centre location.

Grainger Town Project successfully applied a conservation planning approach


designed to complement the historical character of the area. It strengthened
Grainger Town as a mixed-use historic urban quarter, created a high quality environment and identified a new
economic role for the area, which was compatible with the conservation of its historic fabric. Overall, 121
buildings were brought back into use.

Private sector investment weighed in at over £145 million and is predicted to reach £194 million by 2006.
In addition, the project won Single Regeneration Budget funding of £11 million, which, together with grants
and public funding, has bolstered the total investment to around £240 million. There’s still work to be done, but
the mood in the good-looking city centre is upbeat and vibrant. The successes achieved are the result of multi-
skilled project teams, enthusiasm, commitment and broad-based independent partnerships to steer the
regeneration programme and provide ambassadors for change.

A depressing quarter with an uncertain future has been transformed into a thriving central area, as a
demonstration of the role that a high quality historic environment can play in the life of a city.
The Old Market Square – Nottingham
23
© Gustafson Porter

Few cities have a central open space the size and visual importance of
Nottingham’s Old Market Square. It is the symbolic heart of the city, an impressive
civic space and focus for endless activities. The new Nottingham tram-line runs
around its perimeter. However, the current layout is 75 years old and ill suited to
the needs of a modern city centre.

Nottingham believe the Old Market Square can be one of the most stylish public
spaces in Europe and are now in the process of making this happen.

In October 2003, the Nottingham City Council launched ‘Square One’, an international design competition that
attracted some of the world’s finest architectural practices and was won by Gustafson Porter.

A new design has now been created featuring textured water terraces, a new avenue of trees on traffic free
streets, and a dynamic water channel that follows a historically significant line that once separated the original
Saxon and Norman boroughs.

The new Square will be created by December 2006 producing a public space that is an attraction in itself, a
place to meet, and the centre of a thriving new city destination. It will set a new benchmark for public realm
and complement new residential, art and cultural, commercial and retail developments appearing across the city
and in and around the square.

Heart of the City – Sheffield


© Sheffield City Council

Sheffield’s £130 million Heart of the City project is the foundation


stone of the regeneration of the city centre. Its success is crucial for
confidence within and outside the city. High quality design is being
deliberately used to boost commercial activity. The Peace Gardens,
Millennium Galleries, and Winter Gardens are flagship projects that
have already attracted international acclaim. This has raised both
enthusiasm and expectation throughout the city.

Sheffield puts high priority on achieving maximum synergy between public realm investment and economic
improvement. So Phase II of Heart of the City – which is well underway – is specifically designed to attract
investors and retain business in the city centre. All these developments are already increasing the number of
visitors and a new 4-star city centre hotel will be completed by Autumn 2005.

Alongside the hotel, St Paul’s Place is providing the highest quality offices, leisure and retail space and luxury
apartments. These commercial developments are all set within a landscaped environment incorporating new
public squares and unique water features.

The success of the Heart of the City project is fundamental to the wider regeneration of the city centre.
Together with other projects involving the refurbishment of the City Hall, the transformation of Sheffield Station,
the development of the new retail quarter, and the creation of an E-campus, it will have a major impact on the
prosperity and profile of Sheffield as an international city.
24 A strong launch pad for 4. CITY-REGIONS:
economic revival THE KEY ECONOMIC
These exciting and welcome developments are an BUILDING BLOCKS
essential foundation for achieving a step-change
in the competitiveness and productivity of the This chapter describes:
Core Cities. Mobility and choice are two
fundamental features of modern knowledge ■ The nature of the economic linkages
economies. People and organisations have much between cities and their regions.
wider choices about where they can achieve the ■ The challenge of developing matching
best possible lifestyles and business opportunities. institutional relationships.
Until recently the image and reputations of the
Core Cities compared poorly with regional cities ■ Why the performance of regions can
in Continental countries – and particularly poorly become “stuck” at a low level.
with London. ■ Why Core Cities have a unique role in
“unblocking” low performance.
This is now changing in a big way. Core Cities
are becoming recognised as desirable places to ■ How this role is now unfolding in the
live, work and play. For example, on two Northern Way.
consecutive days – 8 and 9 October 2004 –
“The Times” newspaper carried highly positive
Defining the term “city-region”
reviews of northern cities. The weekly property
review was largely devoted to the transformation Cities, regions and city-regions are terms which
of northern cities as places to invest and live. The increasingly appear alongside each other in policy
weekend magazine featured a comprehensive and research publications. It is important to be
analysis of urban renaissance and modern clear about how each is being used.
lifestyles in Liverpool.
Cities and regions are traditionally referred to in
However, these achievements only provide terms of established administrative boundaries.
the launch pad for improving the economic But these boundaries increasingly fail to reflect
competitiveness of Core Cities. As the analysis the dynamics of economic markets.
in the previous chapter showed that is where
the big challenge now lies. The larger cities – and in particular many of the
eight Core Cities – have grown outwards beyond
But before focusing on a competitiveness plan their immediate administrative boundaries. And
for Core Cities it is necessary to examine the the economic reach of the larger cities has
economic relationships between cities and their increasingly spread out to produce mutually
regions – the Working Group’s overall goal has advantageous relationships with large and small
been to demonstrate how cities can drive up communities situated some distance from the
performance in their regions as a whole. city itself. The greater mobility brought by the
knowledge economy and longer distance
commuting has further widened this ‘city-region’
relationship.
‘City-region’ is therefore an economic term which The knowledge based sectors which drive
25

has gained credibility through recent studies of advanced economies – notably ICT, life
the knowledge economy in advanced countries. sciences, high value service industries – are
‘City-region’ reflects the interdependencies heavily concentrated in or near the centres
between cities and the areas around them. of major cities. Therefore the reputation
and attractiveness of major cities has a
There are many ways to draw boundaries round determining influence on the competitiveness
city-regions – reflecting the different ways in of the regional economy as a whole.
which people and organisations access assets
■ Major cities have historically flourished as
such as jobs, shops, cultural activities etc.
centres of trade and exchange. Knowledge
For example, in 2002 the Scottish Executive
creation and application are fundamentally
commissioned a study to examine the areas
tradeable processes – for which the proximity
of economic influence of four Scottish cities –
and connectivity assets of cities are critical for
Glasgow, Edinburgh, Dundee and Aberdeen –
a region’s competitiveness.
in terms of housing markets, travel to work areas,
strategic transport links and retail catchment. ■ Major cities provide clear advantages to other
settlements in their regions – highly paid jobs
The Working Group welcomed the increasing for commuters, sophisticated services to local
significance being accorded to city-regions in businesses, and concentrations of cultural and
modern economic analysis – but contrasted this retail services.
with the relatively limited current understanding
■ But the relationship works both ways. Cities
of the dynamic relationships which drive city-
depend on the assets they themselves cannot
regions. This situation is likely to change through
provide – the larger workforce and skills base,
both the knock-on effects of the research
the space for large physical developments
commissioned by the Working Group and also by
such as airports, the wider range of living
the emphasis being put on city-regions in
choices and specialised retailing, and the
regional policy more widely.
leisure and countryside opportunities.

Economic relations between


The researchers summed up their findings about
cities and their ‘city-regions’
the role of cities in their regions as follows:
In view of the paucity of existing research
evidence the Working Group gave close attention “In our study there were no successful urban
to the following key messages coming out of regions which did not have successful cities at
“Competitive European Cities: Where do the their core. The regions which performed well
Core Cities Stand?”: were those where the core city performed
well – and vice versa.”
■ The majority of economic activity is
concentrated in large cities. Therefore the
pattern of regional economic activity
is dominated by what happens in the
major cities.
26
Their central message for policy makers was ■ Instead individual city-regions across
therefore: Europe are developing a range of informal
relationships and alliances tailored to suit
“If you can improve the economic performance local circumstances.
of cities this will have a major impact upon the
■ There is no single model for these informal
economy of the entire region.”
relationships which can be wholly or mainly
translated for use in Britain. Many researchers
These are powerful and persuasive conclusions.
point to Stuttgart as the best known example
However, the Working Group is very conscious
of a fairly formalised approach which appears
that the research evidence of the actual processes
to be meeting stakeholder expectations.
by which greater competitiveness within cities
is translated into advantages throughout the
Strategic thinking about city-
region is still limited. This has to be a subject for
regions in England
further study.
The Working Group was able to draw on the
The institutional relationship final report from an ODPM research project on
between cities and regions “Evaluating Urban Futures” undertaken by the
Centre for Sustainable Urban and Regional
The increasing economic focus on ‘city-regions’
Futures in 2003. This report was aimed at
throws up the need for new relationships which
“examining the quality and effectiveness of long-
can operate across established administrative
term and strategic thinking about the future
boundaries.
development of city-regions in England.”

The key messages from available research highlight


This report concluded that:
the pragmatic consensus in advanced countries to
work informally across boundaries rather than to
■ Sub-regional partnerships are currently
seek wholesale boundary reappraisals:
developing – but in many places these are
primarily responding to the devolution of
■ The need for public policies to take greater
priorities identified in regional strategies,
recognition of the city-region relationship is
rather than to new forms of distinctive city-
widely appreciated across Europe – Britain is
regional thinking.
not alone in this.
■ Authorities collaborating to ‘upscale’ the
■ Equally, there is recognition of the current
strengths of core cities within sub-regions
asymmetry between established administrative
are learning informally rather than using a
boundaries and the realities of economic
systematic process of longer term thinking.
market dynamics.
■ Experience elsewhere shows that national
■ But the complexities of modern governance
Government has a key role in incentivising
probably mean that there is no single
the development of voluntary institution
structural solution which suits all needs and
building across city regions – but in England
all stakeholders.
the necessary in-depth understanding of
the potential of city-regions has not yet
been developed.
The Working Group concluded that the The evidence shows that these key drivers do not
institutional challenges surrounding city-regions
are critical for economic progress – and this issue
work in isolation. They are fundamentally linked –
regions scoring well or badly on one driver will
27
is specifically included in the action plan later in have similar scores on the others. Actions to
this report. improve overall productivity levels must therefore
recognise these inter-dependencies – Figure 8
Why some regions get “stuck” illustrates this point.
at low performance levels
In drawing up the economic strategies which
The Working Group’s remit focuses on how major
form the basis of their Prospectuses the Core
cities can best improve the performance of
Cities have put priority on the need to create
lagging regions. The Group therefore examined
conditions which will attract and retain a critical
the widest possible research evidence on the
mass of highly productive businesses. For
reasons for lagging performance.
example, this overall objective is fundamentally
reflected in the drive to develop ‘Manchester
It was particularly helpful to be able to draw on
Knowledge Capital’ and in the focus on high
the Regional Performance PSA Team’s evidence
level external Board representation on the
which highlighted the significance of five ‘key
‘Creative Sheffield’ economic agency.
drivers of growth’ – which impact directly on
productivity and collectively account for 60%
This reflects the Core Cities appreciation that in
of the persistent disparities between regions.
any region the overall level of productivity in the
economy is dictated by the levels in the most
These key drivers are skills, investment, innovation,
productive businesses operating in the most
enterprise and competition. They provide a sharp
demanding external markets. For example,
economic focus within the broader range of key
labour markets will not invest in skills at a level
factors which make competitive places identified
higher than those actually in demand locally – to
from the study of successful European cities
do so would simply prompt outward migration by
quoted earlier in Chapter 2.

Figure 8: Important linkages between the drivers of growth

Management skills raise


entrepreneurship and business
performanced
SKILLS New firms can create demand for
ENTERPRISE
skilled labour
Skills raise firms’
capacity to develop Entry of new firms
and use new raises competition
technology
Increasing competition
encourages innovation

INNOVATION COMPETITION
Investment in
Increasing competition creates
physical capital
incentives for business
increases firms’
investment
innovative capacity

INVESTMENT
(Source: HM Treasury, 2004)
28
people acquiring skills for which the relevant business start-ups, particularly businesses
jobs do not exist in the local area. based on intellectual capital and with high
growth prospects.
The key to raising productivity in the Core
■ Strengthening and broadening the higher
Cities’ regions is therefore to raise the existing
value end of the economy will have positive
performance ceiling and then use a range of
consequences for both the size and
policy instruments to ensure that the practices
sustainability of economic base overall –
of these more productive businesses set in
thereby increasing employment opportunities
train positive dynamics capable of driving up
for people currently outside the labour market.
productivity at all levels in the city-region
economy – including bringing more individuals ■ A larger critical mass of businesses operating in
into the labour market and instigating more external markets will strengthen the demand
new business start-ups. side evidence for the step change in strategic
transport infrastructure and services which is at
What Core Cities contribute to the heart of the case the Core Cities and the
regional performance RDAs have been putting to Government.

Progressive improvements in the competitiveness


But achieving these benefits will require all the
of the Core Cities’ economies will make the
key players – Government Departments, RDAs,
following direct contributions to the areas of
Core Cities and other public agencies – to
regional economic performance highlighted in
develop new capacity and new relationships
the Government’s strategy:
with each other. As the places where the most
dynamic factors in the regional economies are
■ A critical mass of high productivity businesses
located Core Cities themselves must be prepared
will drive up the demand side of the market
to play formative and pioneering roles.
for innovation.

■ The pool of jobs requiring high level skills will The Northern Way – city-
be larger – encouraging graduate retention, regions in action
generating multiplier effects throughout
For many years policy makers and researchers
the skills pyramid, and providing stronger
have pointed to the potential polycentric
motivation to acquire better skills for the
strengths of the major cities across northern
workforce at large.
England. Parallels have been drawn with the
■ This overall increase in better paid jobs achievements of polycentric alliances in other
requiring higher and intermediate skills – countries such as the Randstadt cities in the
providing it is matched by appropriate training Netherlands and the Ruhr cities in Germany.
opportunities – will significantly increase the
purchasing power available to widen choice Growing recognition of the need for
and increase personal investment in the complementary economic growth poles to the
housing market. south east has further focused attention on the
this northern potential, which Core Cities and
■ A stronger knowledge based economy –
RDAs have been highlighting in their strategies.
both in services and manufacturing – will
create more favourable conditions for new
In February 2004 the Government signalled its 5. ACTION PLAN FOR
own commitment to a full exploration of the
prospects for stronger growth in the North. The
COMPETITIVE CORE 29
Deputy Prime Minister invited the three northern CITIES
RDAs to develop a Northern Way Growth
Strategy as an integral part of the Sustainable This chapter describes:
Communities Plan.
■ The issues covered in the Core Cities
action plan.
The Northern RDAs published their “First Growth
Strategy Report” in September. This report ■ The specific actions to be taken for each
identified the main city-regions – defined from of these issues.
travel to work data – as the key economic
■ How the Core Cities will organise to
building block for a more successful North.
deliver this programme of action.
Specifically the report said:

“We concluded that our eight city-regions are The case for a Core Cities
key to any effort to accelerate the economic Action Plan
growth of the North. Between them these
The central message coming out of all the
eight city-regions house 90% of the North’s
material assessed by the Working Group is that
population and more than 90% of its
the future competitiveness of the Core Cities
economic activity and economic assets. In
will have a fundamental influence on the overall
recent years most of the North’s economic
competitiveness of the regions which are
growth has taken place in these city-regions.
currently under-performing.
The rate of per capita GVA growth in the city-
regions was almost 50% higher than in the
While the message itself is clear, the Working
rest of the North.”
Group fully acknowledges that greater
understanding is still required on some major
The Northern Way encompasses five of the eight
issues. These issues include the need to know
Core Cities. The emphasis on cities and their
more about the ways in which public intervention
regions in the Northern Way Growth Strategy
can be best targeted to improve knowledge
therefore provides a strong synergy between two
functions in city economies, and also about the
high profile policy initiatives.
process by which greater competitiveness in cities
can most effectively drive up performance in all
parts of the surrounding regions.

Given the priority Government now attaches to


improving the performance of all regions, the need
for an action plan to improve competitiveness in
Core Cities becomes urgent. The emphasis in the
Northern Way on the critical role of cities and
their regions adds further importance.
30
At this stage – for the reasons given above – an The case for prioritising each of these themes
action plan cannot produce all the necessary flows from the evidence base already summarised
answers. Early actions need to be combined with in this report, and is further expanded in the
further research – which will lead to progressive expert reports on the Core Cities website.
refinement of the actions. Accordingly the paragraphs below concentrate
on the agreed actions.
There is no ‘quick fix’ on offer!
Transport Connectivity
The framework for action
This work was led by Leeds City Council.
Having considered the emerging evidence base
described in earlier chapters of this report the The analysis emphasises the need for an
Working Group has identified and refined a integrated transport agenda which meets the
specific set of actions which can be expected to economic needs of major cities at three levels
strengthen the competitiveness of the Core Cities. – (a) air links to international business and in-
bound tourism locations; (b) road and rail links
These actions flow from detailed work between major cities and to international airports
undertaken by expert groups led by Core Cities, and ports; and (c) multi-modal links within major
and also from projects commissioned by the cities and their regions.
Working Group.
Identification of these particular needs also raises
The Group members express their thanks to important issues about the overall organisation
all the individuals who contributed their time of transport policy and the linkages between
to this work. transport planning and economic strategy.

The action plan covers: The work has strongly emphasised the case for
greater devolution of decision taking to regions
■ Transport connectivity. and to city-regions. Devolved responsibilities
also need to bring about a more comprehensive
■ Innovation.
approach to utilising the various transport modes
■ Skills. in an area. Designing appropriate mechanisms
for this purpose must be an early priority.
■ Leadership and governance.

■ Public realm investment. This issue about better integration of transport at


the city-region level is central to the case the Core
■ Strategic spatial frameworks.
Cities themselves are making to Government.
■ City-region relationships. Perceptions of poor transport currently work to
the economic disadvantage of Core Cities – and
■ Economic linkages between London and the
ultimately to Britain’s disadvantage. Countering
Core Cities.
these perceptions by decisive action to devolve
■ Learning from and with other European cities. and to integrate is one of the highest priorities
the Core Cities take from all the work to date.
Full reports on each area of work can be viewed
on the Core Cities website (www.corecities.com).
There is growing recognition that economic and
productivity growth need to be better reflected in
transport investment decisions – and work has
Inter-regional connectivity
■ Endorse the significance of the RDA-led
31
started on how to achieve this. work to systematically identify Surface
Infrastructure of National Economic
Importance – and seek to establish how
ACTION
Core Cities can best add value to what is
The agreed actions the Core Cities will now being done.
be taking forward with Government are: ■ Strengthen the ability of current
Strategic transport policy and regional transport appraisal techniques to give
economic performance specific attention to wider economic
■ Establish a set of high profile targets for benefits by developing a cost-benefit
improving connections to and within the measure that includes productivity and
Core Cities. Ensure that these goals are agglomeration effects.
recognised as critical to the achievement ■ Develop specific funded propositions to
of the Regional Performance PSA Target. meet the major surface access issues facing
■ Achieve greater alignment between the regional airports from the projections of air
economic, spatial and transport strategies passenger growth set out in “The Future of
at city and regional levels, to ensure that Air Transport” White Paper.
economic and spatial strategies clearly ■ Establish direct representation of Core
articulate anticipated increases in demand Cities in developing the strategic rail
for travel generated by plans and projects investment programme, Route Utilisation
to improve competitiveness. Strategies, and Regional Planning
Assessments – as welcomed earlier this
International connectivity
year by the Strategic Rail Authority.
■ Prepare a comprehensive strategy for
Intra-regional connectivity
stimulating a stronger network of direct
air services from principal regional ■ Devolve greater powers to local
airports to a wide range of business and authorities and PTEs to determine bus
inbound tourism markets in the UK, services within Core City regions – in
Europe and beyond. This should be particular powers to specify networks
achieved within the overarching and to grant operators exclusive rights
framework set out in “The Future of to operate local networks.
Air Transport” White Paper. ■ Explore how bus patronage might be
■ Further develop and refine the potential increased, both through existing voluntary
contribution to air services strategy of and statutory partnership approaches and
current work on the application of Route through the use of Quality Contracts in
Development Funds to air services from appropriate locations.
regional airports (RDAs and DfT), and a ■ Undertake a review of current approaches
more liberalised approach to granting to the development and delivery of tram
fifth freedom traffic rights (DfT, CAA, projects to improve the planning and
Manchester and Birmingham airports). delivery of ‘value for money’ projects.
32
In short, Core Cities are where the Government’s
Decision Making burgeoning range of measures to promote and
■ Identify appropriate opportunities where support innovation must gain real traction if they
direct Core Cities representation on key are to succeed.
national and regional bodies responsible
for determining future transport priorities Core Cities’ innovation strategies must be firmly
would add value. rooted in the needs and interests of business,
■ Strengthen the coherence of and should focus on attracting more innovative
responsibilities for transport by greater investors to the city-region, improving the
devolution of policy-making powers to coherence and profile of support services,
city-regions and more integration of developing long-term policies to communicate
capital and revenue funding streams. the benefits of innovation, ensuring adequate
infrastructure support, using procurement to
incentivise investment, embedding the
Innovation universities in the local economy and providing
training in innovation.
This work was led by Bristol City Council.

“Competitive European Cities: Where do the Core ACTION


Cities Stand?” highlighted the absence of a
The agreed actions the Core Cities will now
localised UK ‘innovation system’ comparable to
be taking forward are:
the, albeit very different, systems existing in
France and Germany which are underpinning the Joint working between Core Cities
knowledge based economies of successful cities ■ Disseminating the conclusions and
such as Toulouse and Stuttgart. agreed actions to all Core Cities – with
the proposition of a seminar for city-
Core Cities contain the greatest concentrations of region policy makers – to ensure a strong
actual and potentially innovative businesses, the start in developing robust innovation
principal research centres, a large labour pool, strategies.
specialist support and advice services, key
■ Joint marketing of the Core Cities and
infrastructure assets, strategic local leadership
their regions to innovative investors,
and growing external profiles.
either generally or on a sectoral basis.

Because they possess these key assets Core Cities ■ Collaboration between universities
are the most logical places in Britain to develop and/or businesses in different Core Cities.
more effective ‘markets’ for innovation – defined ■ Networking and sharing of best practice
for Core Cities purposes as “the successful – as well as seeking out best practice
exploitation of new ideas” – in which better from other places.
information about both demand and supply
is available and the connections across the
innovation market place operate to best
possible value.
an economy struggling to survive in cities
Working with regional partners
■ Developing dialogues between Core
increasingly dominated by low aspirations
and economic exclusion.
33
Cities and the regional organisations to
establish direct Core Cities representation The critical factor for success will be to design
(from either public or private sectors) skills strategies which are robustly anchored in a
on bodies with significant innovation credible demand side audit. Core Cities are best
responsibilities – e.g. Regional Science placed to identify, and provide for, emerging skills
and Industry Councils. on which the city-region’s future prosperity will be
■ Developing a similar dialogue with based. Core Cities must therefore become strong
Government to ensure that the potential shapers of the supply side of the skills market.
contribution of Core Cities is directly
addressed in guidance given to national To achieve these goals it will be essential to have
and regional agencies. appropriate arrangements – which may well
differ in form from place to place – for
determining skills policies and programmes for
Skills each Core City, and to maximise the linkages
between the Core City labour market and the
This work was led by Nottingham City Council.
wider city-region. The work has therefore
concentrated on developing a generic model for
All research – including a study commissioned
a ‘City Skills Board’, drawing on a range of
specifically for this work stream – highlights the
experiences around the country.
huge scale of both opportunity and challenge
which exist side by side in the Core Cities.
While the form in which this generic model may
be applied will differ, the common goal has to be
Core Cities are the places where labour markets
to convince stakeholders that real value is being
are changing fastest as the new knowledge
added and measurably improved results are being
based economy takes root and grows. They are
delivered. In particular these developments must
also the places with the greatest concentrations
be capable of working effectively within the
of people of all ages who are currently least fitted
existing – and still evolving – regional, sub-
to succeed in this form of labour market.
regional and sectoral skills bodies.

Effective delivery of public policies in Core Cities


The plans to engage RDAs in Regional Skills
can therefore make a very significant difference to
Partnerships share the common goal with Core
both economic and social objectives – achieving
Cities of bringing the demand side of the labour
the really worthwhile prize of an increasingly
market more effectively into the skills planning
thriving and inclusive economy. But if policy
process. It will be important to gain maximum
implementation fails to link effectively with
advantage from these developments at all levels
the dynamics and rhythms of the demand side
in the regions.
of the labour market the consequence will be
34
reflects the longstanding emphasis of local
ACTION government policy on improving service delivery
The agreed actions the Core Cities will now and tackling social issues.
be taking forward are:
As a result the Core Cities score poorly on
City Skills Boards
‘joined-up’ economic governance and on
■ Further refinement of the generic model ‘foreign policy'.
for City Skills Boards – building on the
case study examples from Nottingham, Economic responsibilities – skills, innovation,
Manchester and Newcastle described in transport, employment, business support etc –
the report of the work to date. The are spread across a range of nationally designed
generic model needs to take full account bodies with different spatial responsibilities.
of experience in establishing credible
demand side linkages, developing The aim of the work has been to develop a
mutually supportive relationships with generic model of leadership, strategic planning,
other public agencies, acknowledging delivery and implementation capabilities to
different spatial expectations, and raising enable a modern Core City to close the gap
aspirations among people outside the on leading Continental cities and optimise
labour market. its contribution to national and regional
■ Systematic dissemination of the case for economic performance.
City Skills Boards, and how the generic
model might be successfully adapted to Potential freedoms and flexibilities will have
different local circumstances, among all to fully reflect the unique economic roles of
Core Cities and other regional and city- Core Cities within their regions. There must
regional stakeholders. be a clear and strong connection between
Core Cities in national policy changes in governance and improvements in
competitiveness. Core Cities and Government
■ Early engagement with DfES officials and
will need to determine how best to utilise new
the Minister for Skills to consider how
developments such as retention and reinvestment
the opportunities and challenges in Core
of Business Rates, and collective actions between
Cities can best be reflected in national
public agencies in the unique circumstances of
policies and how the contribution of
Core Cities.
Core Cities to national learning objectives
can be optimised.
Any generic model must be capable of
adaptation to the needs and circumstances of
Governance and Leadership individual Core Cities – successful cities are
distinctive cities. Such a model must also work
This work was led by Liverpool City Council. with and reinforce the emerging outcomes of
the parallel work streams described in this section
Comparisons with major Continental cities shows of the report.
that the Core Cities currently have a deficit in
economic governance and leadership. This
The work has not addressed the issues of regional
government (strong core cities are needed
whatever arrangements operate regionally) or
■ Develop a mutually supportive
programme of training and capacity
35
local government boundaries (Continental building within the Core Cities and their
experience points to the advantages of building city-regions to enable them to address
voluntary alliances across boundaries). the strategic economic agenda with
confidence and credibility.
■ Seek the support of Government and
ACTION the Regional organisations to develop a
The agreed actions the Core Cities will now systematic, high profile and professionally
be taking forward are: respected programme of staff
secondments between national, regional,
National design experiments
and city levels with the aim of achieving
■ Identify in collaboration with a step change in the ability of these key
Government and RDAs the critical spatial levels to align policies to best
‘market failures’ in current Core Cities’ mutual advantage.
economic performance where
governance and structural constraints are
held to be significant causal factors. Public Realm Investment
■ Develop and implement a programme of This work was undertaken by Frontier Economics.
national design experiments which test
alternative governance and structural Given the weight of evidence that perceptions
arrangements against rigorous targets for about ‘quality of place’ play a significant part in
improved economic performance – the overall success of modern cities and their
utilising but stretching the existing regions the Working Group and the Regional
framework of central-local relationships Performance PSA Team commissioned a specific
in terms of devolved responsibilities, study on:
incentives, and the sharing of savings
achieved. ■ Whether there is a link between quality of
■ Feed the early results of this programme place and regional economic performance.
into the analysis of progress towards the ■ If so, whether policies related to quality of
Regional Performance PSA Target and the place can play a role in meeting the Regional
preparation for Spending Review 2006. Performance PSA Target.
Improving the governance context
■ Engage with Government to develop a The researchers concluded that:
more systematic prioritisation of the
unique balance of need and opportunity ■ There are strong theoretical arguments for
which exists in Britain’s major cities – supporting investment in quality of place. In
countering both the low profile regional many cases the necessary investments are in
cities currently have in national policy the public realm and would be under-provided
overall and their equally limited if left to private markets. There are often co-
recognition from major investors. ordination challenges where returns on one
36
investment depend on other investments A lot has changed since then. In particular:
being undertaken at the same time.
■ The Sustainable Communities Plan now
■ Investment in central urban areas to
provides an overarching policy framework
reinvigorate public space appears to be
at national level.
the most promising policy.
■ Within the Sustainable Communities Plan
■ The research points to a practical checklist for
the Government has prioritised several key
decision makers which focuses on the need
spatial areas which transcend established
for a long term viable investment vision for
administrative boundaries. Of these the
the area, identification of the barriers which
Northern Way and the Midlands Way
have precluded this investment happening to
particularly involve the Core Cities and it is
date, making robust plans to overcome these
already clear that city-regions will be central
barriers – and testing the willingness of
building blocks for economic growth.
private investors to come in if the barriers
are overcome. ■ Local Strategic Partnerships and Plans
have become established as the principal
overarching mechanisms for discrete
ACTION communities, and particularly for larger
The agreed actions the Core Cities will now urban communities. The Core Cities have
be taking forward are: been in the vanguard of these developments,
demonstrating the value to be gained from
■ Provide full support to the Regional
comprehensive and joined up strategies
Performance PSA Team’s plans for an
covering complete economic and social entities
autumn seminar to publicise the Frontier
rather than simply local neighbourhoods.
Economics report and its implications for
policy – maximising stakeholder ■ Each Core City has produced a Prospectus
engagement will be important. describing its distinctive economic and
■ Engage with Government to establish renaissance identity and demonstrating
authoritative guidance on how public its contribution to regional growth. This
realm investment plans should in future development begins the process of ‘foreign
become pivotal features of spatial policy’ which featured so strongly in the
economic strategies. characteristics of successful European cities.

■ The replacement of non-statutory Regional


Planning Guidance by statutory Regional
Strategic Spatial Frameworks Spatial Strategies – and more formal links
From the outset the Working Group agreed on with Regional Economic Strategies – will
the need for robust alignment of spatial further sharpen the connections at regional
economic frameworks in order to ensure optimal and local levels.
synergy between them. At that time this position
did not exist. Regional Economic Strategies were
in place, and many initiatives at local level
focused on strategies for neighbourhoods.
But otherwise there were gaps.
City-region relationships
ACTION

Against this positive background the agreed


The economic focus on city-regions is relatively 37
recent. The subject is still largely unexplored.
actions Core Cities will now be taking
The Working Group has highlighted the
forward are:
importance of early action to further refine
■ Continue to develop the rigour of the collective understanding about the economic and
Core City Prospectuses to demonstrate institutional dynamics of city-regions. Without
how public initiatives and investments this action the situation described by the Centre
are catalysing larger changes in the for Sustainable Urban and Regional Futures (see
behaviour of investors and markets to Chapter 4) – i.e. sub-regional relationships
the advantage of both the city and developing primarily to respond to devolved
the region. regional priorities – will become embedded and
■ Work closely with the RDAs to it will be more difficult for all partners to take
strengthen the evidence base showing advantage of the unique and distinctive strengths
how Core Cities contribute to the of individual city-regions.
achievement of targets in the Regional
Economic Strategies and, where Accordingly the Group welcomes and endorses
appropriate, the Northern Way and ODPM’s commitment to develop a strategic set of
the Midlands Way. questions around the city-region challenge and
bring key stakeholders together to advance this
■ Develop effective Core City contributions
critical agenda.
to Regional Spatial Strategies, and share
these experiences across the Core Cities.
Although this work is only at the start line the
■ Highlight within Government the Group would expect it to include developing
importance of continuing to develop an stronger evidence about the dynamics of urban
effective and integrated economic and economies, the practical processes of the
spatial planning process – and make a relationship between city and regional
distinctive Core Cities contribution to economies, the evidence about approaches to
this work. governance and potential governance models,
the range of economic models contained by the
city-region concept, the most appropriate policy
framework and instruments to foster city-regional
collaboration, and the lessons to be learned from
international experience.

The Group attaches importance to the Core Cities


being directly represented in the arrangements
for taking forward the city-region agenda.
38
■ Although internationally traded Business and
ACTION Financial Services will continue to be highly
The agreed actions the Core Cities will now concentrated in London their domestic
be taking forward are: equivalents are also important and must be
developed further in some of the Core Cities.
■ Developing distinctive city-region
frameworks at the heart of their ■ Construction and Communications are not
strategies and Prospectuses. so tied to London bases. Communications
■ Building strong relationships with all is a key knowledge based sector with fast
key stakeholders in their city-regions, growth forecast and considerable export
focussing on the goals to be won potential. All Core Cities are well placed to
through mutual collaboration. gain market share.

■ Collaborating across the Core Cities ■ Most Core Cities are well placed to grow their
to develop common themes to input market shares in the Machinery, Equipment
to the ODPM-led work programme on and Electronics sectors – which are not
city-regions. dependent on London locations. These are
knowledge based high tech sectors with
possible generic local linkages to the
Economic linkages between Communications, Financial and Business
London and the Core Cities Services sectors.
This work has been led by Manchester City
■ Some sectors with relatively high growth rates
Council.
also show evidence of decentralisation from
London and the South East since 1998.
A new research study was commissioned from
These include some elements of Financial
a team led by Professor James Simmie to throw
and Technical Services, Electronics, ICT
further light on the current and potential
Consultancy, Telecommunications, Printing,
economic linkages between London and the Core
and Research – all of which could contribute
Cities. This goes directly to the heart of the
to the development of more knowledge
Working Group’s commitment to developing the
based economies in the Core Cities and
Core Cities and their regions as “additional
their Regions.
cylinders to the UK’s economic engine, giving
London more space to excel in the functions only ■ Relocation of more highly qualified public
a global city can bring to the UK”. sector staff to Core Cities – on a larger scale
than currently being planned in the wake of
In very brief summary, the Simmie report – the Lyons Review – could bring similar moves
“Realising the Full Economic Potential of London from private sector services, so strengthening
and the Core Cities” – concludes that: the Core Cities profiles as alternative decision-
making magnets to London.
■ The most competitive UK sectors in external
■ The key challenge for the Core Cities is to
markets to 2010 are expected to be
develop strategies which will attract clusters
Communications, Business Services, Financial
of these potential ‘new’ sectors on a scale
Services, Construction, and Distribution,
sufficient to compensate for the forecast
Catering and Hotels.
further decline of uncompetitive Learning from and with other
manufacturing functions. European cities 39
■ The main competitors to London are New This work has been led by ODPM and Sheffield
York and Tokyo – and London will need to City Council.
continually monitor the strength of its
competitive edge over these cities in key A constant theme of this report has been the
functions. London has a unique time zone perceived performance gap between the most
advantage which enables it to trade with both successful European cities and the English Core
New York and Tokyo on the same day. Cities. The detailed analysis contained in the
research report “Competitive European Cities:
■ London and the Core Cities have a potentially
Where do the Core Cities Stand?” has greatly
large agenda of common interests – at the
enhanced understanding about the nature and
head of which is the improvement of
scale of this gap.
transport connections which could open
up much more high level interchange of
There is now a determination in the Core Cities,
economic strengths.
reflected also among their colleagues in the
Working Group and the Regional Performance
This report came at a very late stage in the
PSA Team, to develop a learning relationship with
Working Group’s timetable. It raises very
a range of European cities to promote wider
significant issues and opportunities, which now
understanding of the factors which underpin
need to be collectively examined by London and
successful, competitive cities. Such an initiative is
the Core Cities in depth.
timely as it can build on the involvement of many
EU cities in the recent research project.
ACTION
Accordingly a project has been designed, and
The agreed actions the Core Cities will now
has successfully bid for EU funding under the
be taking forward are:
INTERREG 111C Programme.
■ Establish arrangements for a detailed
analysis of the Simmie report to identify a The main features are:
set of issues which can be systematically
pursued between all the Core Cities ■ Project title is ‘COMPETE – European Network
and London. for City-Region Competitiveness’.
■ Each Core City to reflect on the report’s
■ The key partners are the eight English Core
propositions about sectors in which the
Cities (Sheffield acting as lead partner),
Core Cities could achieve higher market
Munich, Dortmund, Helsinki, Barcelona,
shares and factor this analysis into their
Rotterdam and Lyon.
own economic strategies.
■ The core objective is for the partners to work
together to develop a stronger evidence base
which can underpin robust and transferable
models relevant to building competitive city-
regions across Europe.
40
■ Actions will cover three main areas – a Core Cities have now developed a new and
programme of trans-national dissemination higher profile as both policy makers and policy
events, development of a new ‘knowledge deliverers. They expect to take a more pro-active
resource centre’ as a focus for the city-region role in the next stages of the work – and their
evidence base, and finally identification of partners share this expectation.
opportunities to link into key urban regional
and economic policy initiatives. In addition to the specific actions agreed by the
Working Group – described in this chapter – Core
■ The project will run for three years from
Cities, individually and collectively, now need to
October 2004.
address the following overarching agenda:

ACTION ■ Prospectuses. Developing their individual


Prospectuses to become recognised as
The agreed actions the Core Cities will now systematic business plans detailing the Core
be taking forward are: Cities’ contribution to economic growth in
■ Sheffield City Council to put in place their city-regions, regions, and supra-regions
the capacity necessary to function as – and to national economic performance.
‘lead partner’. The growing focus on city-regions and supra-
■ Build a vibrant and committed network regional strategies means that the role of and
involving all the partner cities. audience for these Prospectuses is continually
evolving – and Core Cities will need to plan
■ Begin the team building process by
their work accordingly.
inviting the Continental cities to
participate in the Sustainable ■ City-regions. Building effective city-region
Communities Summit in January 2005. partnerships which ensure that the city-region
■ Develop a comprehensive plan for taking becomes the critical building block for
forward the project’s core objectives. regional, and supra-regional economic
growth strategies.
■ Ensure that this project develops in ways
which clearly add value to existing ■ Regions. Building effective relationships with
networks – such as Eurocities – and RDAs, Regional Assemblies, and Government
avoids duplication or re-invention. Offices which formally recognise the
contribution Core Cities make to regional
strategies and the levels of support Core
Making It Happen Cities require for this purpose.
Taken together with the Government’s
■ Sustainable Communities. Ensuring
announcements about the future direction of
effective Core Cities’ representation in the
regional policy overall these specific actions to
development and implementation of supra-
strengthen Core Cities represent a unique
regional economic strategies so that the Core
opportunity to transform Britain’s economic map.
Cities and their regions make an optimal
But this will require a continuation of the
contribution. The key role which the largest
collaboration and mutual support between key
cities must play in creating conditions for
partners at national, regional and local level.
sustainable communities throughout their
regions requires Core Cities to have a major Core Cities will progressively strengthen their
41

input to the future development of national own collective resources in order to engage
policies on these issues. with Government and national agencies –
which will in turn assist in the development of
■ Research and good practice. Collaborating
reciprocal arrangements within Government
across the Core Cities Group to press forward
and its agencies.
robust development of the existing evidence
base about the economic role of cities –
During the summer of 2004 ODPM Ministers
including building learning partnerships
undertook a programme of visits to the Core
with cities in other EU countries.
Cities to see first hand the progress of urban
■ Policy formulation. Collaborating with renaissance and to hear about the challenges
Government Departments, regional and ahead. These visits have played an important role
specialist partners to take forward – and as in strengthening links between Core Cities and
necessary to lead – a systematic and Ministers and raising the profile within
distinctive ‘cities policy agenda’ aimed at Government of the common agenda which now
optimising the contribution the larger regional needs to be addressed.
cities make to national and regional life.
Resources
To carry forward this large and demanding
This is fundamentally a strategic report. Its key
agenda new arrangements will be required,
task has been to chart a well evidenced path
reflecting the need for inputs from all partners.
from a position where cities have traditionally
featured in policy debates as priorities for
In particular:
remedial action to a forward looking agenda
where cities are recognised as the principal levers
■ ODPM and the Core Cities will jointly organise
for driving up competitiveness.
quarterly seminars to review progress and
address key issues on the city and city-region
This has been a substantial journey to undertake
agendas, including assessing the impact the
in a single exercise. Accordingly, the action plan
Government’s measures for supporting
described in this chapter is specific in identifying
economic growth and sustainability in the
a wide ranging set of priority tasks – but cannot
regions. These seminars will widen the range
at this stage spell out the eventual implications
of stakeholders having direct involvement
for resources.
with this work. They will also ensure that
emerging opportunities are spotted and The context of this report therefore has much in
exploited and emerging roadblocks are common with the recently published Northern
tackled quickly and effectively. Way Growth Strategy.
■ With encouragement and support from
However all members of the Working Group have
ODPM, the Core Cities will develop senior
shared a common expectation that this report will
bilateral relationships with relevant
provide powerful evidence for ensuring that
Government Departments to take forward
future spending decisions – involving both
the action plan described in this report.
existing and new resources – are better informed
in terms of achieving stronger competitiveness.
42
The outcomes of the 2004 Spending Review renewal – is a goal long shared by Government,
have already demonstrated the Government’s Core Cities and RDAs. The Government’s 2002
willingness to raise the profile of regional policy. announcement of the Sustainable Communities
For example, the new resources for science and Action Plan has therefore been widely welcomed
technology promised to RDAs address precisely as a helpful focus for channelling the wide range
the challenges of creating stronger local markets of policies and actions which support this goal.
for research which are highlighted in the
innovation section of this chapter. Similarly the The Core Cities have consistently argued that
recent announcement of a £100 million growth competitiveness is a pivotal element of
fund for taking forward the Northern Way sustainability. Uncompetitive economies are
provides an important opportunity to strengthen unable to generate the surpluses which permit
competitiveness in the northern city-regions. either corporate or individual investment in the
factors which make for sustainability. In such
Core Cities now need to develop well-evidenced economies outdated industrial practices work
cases for targeting expenditure in ways which against sustainability by increasing current
maximise the advantages their economic assets pollution while also falling further behind the
can bring to their regions. Government and levels of competitiveness elsewhere. Individuals
RDAs now need to demonstrate by their actions are unable to fulfil their potential in terms of skills
that their commitments to achieving the full and earnings – leading to high levels of out
potential of Core Cities are “for real”. migration leaving weakened and less sustainable
communities behind.

6. CREATING Similarly economies subject to overheating


SUSTAINABLE produce threats to sustainability from congestion
and consumption of resources beyond the rate
COMMUNITIES of renewal.

This chapter describes:


Accordingly, the Government’s Sustainable
■ How economic growth is central to the Communities Action Plan goes with the grain of all
Sustainable Communities Plan. the partners represented on the Working Group.
The programme of high level spatial strategies –
■ How competitive cities can be models
Thames Gateway, Northern Way, Midlands Way –
of sustainable communities.
is driven by the need to optimise the relationship
■ How far the policy context for cities has between economic competitiveness and the social
changed since 2002. and environmental agendas. The focus of these
strategies differs in their reflection of the regional
economic disparities highlighted at the beginning
Competitiveness is at the heart of this report – Thames Gateway is about
of sustainability responding to the high levels of overall growth
The creation of ‘sustainable communities’ – in the South East; the Northern and Midlands Way
communities which contain or can access all the are about strengthening growth in under
factors which make for continual and beneficial performing regions.
As the Deputy Prime Minister put it in his Foreword A tolerant culture which encourages different
43

to “Making it Happen: The Northern Way” lifestyles and points of view.

■ A creative and innovative milieu which


“I want to see us build on these assets and
constantly draws on all the community’s
successes and look at how the North can
talents to provide a melting pot for new ideas.
become more prosperous, more competitive
and more dynamic.” ■ A commitment to excellence in the city’s
institutions and public realm.
This report has already highlighted the
■ A continual inflow of visitors and new
importance the Northern Way Growth Strategy
residents which constantly refreshes and
has placed on the city-regions. There are
extends the existing stock of knowledge and
particular responsibilities for the five Core
range of lifestyles.
Cities in the North.
■ Matched by a similar outflow of people, to
Competitive cities create the the region and much more widely, who act as
most sustainable communities ambassadors by spreading ideas developed in
the city and enhancing its reputation.
This report has brought together the evidence
demonstrating that core cities contain the assets
The scale and diversity of core cities makes them
which are fundamental for success in modern
unique in their ability to blend together these
knowledge based economies. The report has
social attributes to place the city and its region on
also highlighted the level of influence core cities
a platform which commands attention nationally
have over the economic performance of their
and internationally.
regions.

But sustainable communities


Sustainable communities fundamentally depend
require successful core cities
on strong economic performance. Therefore core
cities which are economically successful provide a Successful core cities can use their assets to
strong base for creating sustainable communities make truly sustainable communities. But the
both within the city itself and also in the wider assets have to be systematically and coherently
city-region. developed before the model becomes genuinely
sustainable.
But sustainable communities require more than
simply economic success. Core cities which have poorly performing
economies are vulnerable to ‘asset
Again, successful core cities bring the necessary fragmentation’. In such situations the city lacks a
additional, often intangible, assets for community widely held sense of purpose and direction and its
sustainability. These include: assets, instead of creating synergy, pull away from
each other. People from different backgrounds
■ A resident population comprising a wide retreat into the perceived security of the past and
range of ethnic and cultural backgrounds the familiar – and lack the confidence to embrace
and talents. the new and the unfamiliar. Inflows of visitors
and newcomers slow down and the city becomes
44
progressively less able to generate new ideas and Working Group have produced robust evidence,
project itself outwards. Ambitions, confidence the overall value of which is much greater than
and esteem all suffer. the sum of its parts.

These negative dynamics quickly communicate Other influential organisations are now putting
themselves to the city-region as a whole, which increased emphasis on the economic agenda for
can then become locked into a low performance cities. For example the Institute for Public Policy
equilibrium in both economic and social terms. Research followed up its regional disparities study
by announcing the formation of a new centre to
As this report has emphasised throughout, the focus on research about cities.
clear message from the most successful European
cities is that economic competitiveness is the Policy packages to improve regional performance
critical factor which can bind communities and the competitiveness of Core Cities are now
together and create sustainability. both in play – and there is wide recognition of
the synergy between them.
A strong policy base on which
to build Core Cities have emerged as natural key
building blocks for the growth strategies now
In tackling this challenge the Core Cities
underpinning the Sustainable Communities Plan.
will be starting from a policy base which is
unrecognisable from that which existed when
That is worthwhile progress for two years’ work,
the Working Group first met in 2002.
an appropriate point for the Working Group to
thank all those who have contributed time and
At that time the economic role of cities was,
effort to developing the evidence base and the
at best, on the margins of policy. The
action plan which can deliver competitive cities
overwhelming focus of urban policy was on
and sustainable communities.
combating social exclusion in declining
neighbourhoods. Most cities themselves had
little feel for the need to compete in external
markets. The economic concept of the ‘city-
region’ did not feature on anyone’s radar screen.
And – as research carried out for ODPM showed
– cities had virtually no profile in Government
Departments and national agencies.

That position has now changed fundamentally.

The competitiveness factors which underpin


regional economic performance are now much
better understood – as are the distinctive roles of
major cities in their regions. Landmark research
projects undertaken separately by the Regional
Performance PSA Team and the Core Cities