IPPR fringe on ‘Rebalancing the Economy: Raising Productivity and Promoting Regional Growth’
Industrial Strategy put a strong focus on the need to drive economic growth throughout the UK’s nations and regions, to rebalance the economy away from London and the South East, and create more high skilled, high paid jobs and opportunities across the UK.
“Good afternoon, and thank you for inviting me to be part of this IPPR fringe event.
My name is Cllr Abi Brown, and I am Leader of the Conservative Group on Stoke-on-Trent City Council, and Deputy Leader of the Council. I hold the Finance and Partnerships portfolio, and a key part of my role over the last 3 and a bit years has been leading big strategic projects.
In 2017, Centre for Cities produced a report on ‘The Role of Place in the UK’s Productivity Problem’, which looked at the geography of productivity and the huge variances acrossed the country.
Their conclusion was that low national productivity was the result of the economic underperformance of cities outside London and the South East (referred to onwards as the Greater South East).
One particular bit of key data is that in 2015, only 12 of Britain’s 62 cities performed above the national average for productivity and 8 of those 12 were in the Greater South East. That means that cities such as Leeds, Manchester and Birmingham all fell below the national average for productivity.
Three main points emerged from the report;
Firstly, that there is weaker productivity in cities outside the Greater South East because they struggle to attract the higher skilled components of the most productive sectors and firms. The workers are not available, and the benefits of agglomeration are missed.
Secondly, that the highly productive sectors of the UK economy have a larger percentage of jobs in the Greater South East area than elsewhere. For example, the IT sector is 7% of the economy in the Greater South East, but just 3% elsewhere.
And finally, that unsurprisingly, highly productive firms are the most productive in Greater South East cities.
My city, Stoke-on-Trent, as part of the report, has the notoriety of being named as ‘the least productive UK city’ with an output of £41,500 per worker. In comparison, the most productive city - Slough - had an output of £82,100 per worker).
Now that report was published in 2017, based on 2015 data, and since then - I would say - lots of things have changed in Stoke-on-Trent.
In fact, in late 2015 several very positive pieces of news came out about the local economy. Oxford Economics published a piece of work outlining Stoke-on-Trent as the second fastest growing economy between 2010 and 2015, with 18.6% growth versus 3.2% nationally. We also had the 6th fastest wage growth.
Around the same time, UHY Hacker Young issued a report that we had the 4th best performing economy between 2009 and 2013, with a 21% growth in the economy.
Now obviously both of these build on a very low base for the city, however started to indicate that there was change happening.
To put these reports into a bit of local context, in 2015 there was a change of control at Stoke-on-Trent City Council, from being a strong Labour council, to an Independent/Conservative-led council. We brought in a change of narrative, and a more positive approach to what was happening locally.
As Secretary of State for Communities and Local Government, Sajid Javid outlined very clearly that ‘the role of government was to provide the conditions for business to thrive’, and this is something we have built on. As a Council, we have really pushed the importance of business to the local economy, particularly in light of changes to local government finance that mean business rates are more important than ever.
In 2015 we bid for, and secured, Enterprise Zone status, and the Ceramic Valley Enterprise Zone has delivered and secured nearly 2000 jobs in its first two and a half years, making it one of the most successful of its kind.
We have also been ambitious in our approach to promoting the value of place, including bidding for and etching the final shortlist for UK City of Culture 2021, a Channel 4 Creative Hub where we reached the shortlist, and most recently the Poppies: Weeping Window from the Tower of London.
As a council, we have provided leadership locally to improve housing, creating our own company to speed up housebuilding locally and to disrupt a moribund local market, and to also bring forward a sharp focus in regeneration, being the catalyst for big transformational schemes. At the moment, a 4* Hilton Hotel is going up in the city centre, next to fully let Grade A office accommodation, which has attracted new businesses into the city.
We have also benefitted from government support in a number of ways; as already mentioned, we have an Enterprise Zone, and in conjunction have been encouraged to develop a ‘sector deal’ around ceramics. We have an ongoing City Deal, and are one of the Government’s Opportunity Areas, receiving £6m of funding to change our position as our of the social mobility ‘cold spots’. In the last week, we have been announced as one of 10 city regions to be shortlisted for the Transforming Cities Fund, potentially in line to receive a share of £840m to improve transport infrastructure in the city, which will in turn help businesses to create more well paid jobs.
Clearly, I believe this is all making a difference; today, Stoke-on-Trent has the 10th fastest growing economy outside that Greater South East region, with one of the most successful Enterprise Zones in the country, and one of the fastest growing housing markets.
What can government do to support this process of improving productivity? From a local government perspective, here are a couple of ideas. It’s easy to withdraw when times get difficult, but the reality is that that is the time when you need to take more risk, show leadership and use the tools at your disposal. We also need to work more with business and education to improve the skills of our workforce. There is also a need to look more at the opportunities around devolution - which is similarly a suggestion for central government. Larger cities have devolution deals, but it’s important to also ensure that smaller cities are given the same tools and rewards to unlock potential. However the challenge for those smaller cities is perhaps how they utilise those opportunities to improve productivity without becoming identikit cities.”