Professional Documents
Culture Documents
Competitive Cities
make
Prosperous Regions
and
Sustainable Communities
November 2004
Office of the Deputy Prime Minister
Eland House
Bressenden Place
London SW1E 5DU
Telephone 020 7944 3300
Internet service www.odpm.gov.uk
Copyright in the typographical arrangement and design rests with the Crown.
This publication (excluding the Royal Arms and logos) may be reproduced free of charge in any
format or medium provided that it is reproduced accurately and not used in a misleading context.
The material must be acknowledged as Crown copyright with the title and source of the
publication specified.
Further copies of this report are available from the ODPM website: www.odpm.gov.uk/corecities
or
ODPM Free Literature
PO Box 236
Wetherby
West Yorkshire
LS23 7NB
Tel: 0870 1226 236
Fax: 0870 1226 237
Textphone: 0870 1207 405
E-mail: odpm@twoten.press.net
Published by the Office of the Deputy Prime Minister. Printed in the UK, November 2004 on material
containing 75% post-consumer waste and 25% ECF pulp.
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
■ Transport Connectivity 30
■ Innovation 32
■ Skills 33
■ City-Region Relationships 37
■ Making It Happen 40
■ Resources 41
■ 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.
■ 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.
■ 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.
■ 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.
■ 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,
1.5%
1.0%
0.5%
0.0%
UK Germany US Canada France Italy Japan EU OECD
(Source: OECD)
£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
£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.
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
But the big picture is clear. Many Core Cities 26 Bonn 34,112
€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
■ 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
■
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.
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
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.
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.
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.
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.
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.
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.
■ 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.
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.
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.
■ 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:
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.
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.