Big cities, big potential: The Spending Review rightly prioritises urban growth

The Spending Review empowers UK city regions with transport and innovation funding to boost productivity and drive national economic growth, says Andrew Carter

The Chancellor’s Spending Review rightly puts big cities at the centre of a plan for broad-based, long-term national prosperity. 

The UK’s big cities’ economies have tended to underperform, costing the country £50bn in lost economic output a year, and lowering living standards everywhere in the country. 

This underperformance is unusual. Big cities in G7 countries like Hamburg and Lyon are typically the driving forces of their national economies but in Britain that is not the case.

So the Spending Review is a welcome shift towards a city region-led plan for national growth. Metro mayors outside of London have been given more capital investment – thanks to the £15bn Transport for City Regions settlements – to spend on public transport network upgrades to unlock the potential of their places.

This tackles one of the big hardware problems in UK cities that is a major obstacle to economic growth. Travel within towns and cities is too slow and disjointed, limiting the opportunities for people to access good jobs and training in their areas. Only 40 per cent of the residents of large UK cities can access their city centre in 30 minutes or less, compared to 67 per cent in large European cities. The respective numbers for Leeds and Marseille are 37 per cent and 89 per cent.

Making progress on bridging this gap will unlock more opportunities for more people and will mean big cities like Manchester, Birmingham and Leeds play the role that big cities in Europe play.

Innovation clusters

The spending review also announced more investment for developing “innovation clusters” in the big cities. This reflects the reality of where much of the innovation economy is located; in big cities. Nearly two thirds of the UK’s new economy firms are based in cities and large towns, and over half of these are in the city centres.  

Innovation thrives there because cities provide access to large labour pools, abundant commercial space and proximity to research-intensive universities and other innovation firms. The centres of the UK’s biggest cities are already nationally significant hotspots of innovation, and there is potential for them to deepen this offer further. Allocating funding for local innovation partnerships to local leaders like metro mayors will ensure it is targeted at the places where it will have the most impact. 

The forthcoming Industrial Strategy, expected before the end of this month, should double-down on the approach outlined in the spending review. Putting our big cities at the heart of the Industrial Strategy will give the government the best chance of achieving its national growth ambitions.

Andrew Carter is chief executive of Centre for Cities