Big shot or long shot?

Can elected mayors can help drive economic growth in England's cities

Joanna Averley Interim Chief Executive Centre for Cities Bristol Festival of Ideas 2 December 2011

Challenging times
National economy continues to struggle Unemployment highest since the mid 1990s Living standards squeezed Cities drive economic and job growth and are home to the majority of UK's businesses but considerable variance between them Over the next 24 months some of our cities will experience growth, some recession and some stagnation Government and city leaders keen for ideas that will stimulate economic and job growth in the short and long-term

The recession was deep and the outlook is poor

but Bristol has fared better than most

Core City

Employment Rate, April 10March 11 (percent)

Increase in claimant count rate (Feb 08 Oct 11)

Claimant Count rate (Oct 11)

1
2 3 4 5 6 7 8

Bristol
Leeds Newcastle Sheffield Manchester Nottingham Birmingham Liverpool

76.7
69.0 67.0 66.8 66.3 64.3 62.1 62.1

2.0
2.1 2.0 2.5 2.3 2.3 2.7 2.0

3.3%
4.3% 5.1% 4.8% 4.7% 4.9% 6.8% 6.4%

Source: NOMIS 2011, Annual Population Survey, Claimant Count

How to deliver economic growth?

Private sector business & jobs growth

Targeted infrastructure & housing investment

Careful Investment, more responsibility, greater risks

A skilled & active workforce

Cities need to constantly adapt to long-terms trends

200 years of population change in the UK

Need different sources of job growth over the next decade compared to the last

Average net fall in manufacturing employment among English cities between 1998 and 2008 was 33%.

London dominates

38% of net additional private sector jobs between 1998 and 2008.

But other cities have also done well

Skills matter in good times and bad

The knowledge economy in Englands Core Cities & London

Source: Nomis, Annual Business Inquiry; Nomis, Annual Population Survey. City region data is for MAAs.

Niche sectors are important but not the only answer

There is a clear spatial pattern to unemployment

Hardest hit cities

Geography matters
People living and working in the same local authority area

Typically people only travel a short distance to work (45mins)

People working in low skill, low wage jobs tend to travel even less

Individuals access to work is affected by a range of factors

The nature of jobs is changing

Change in the number of jobs and resident population by qualification, 2004 to 2010 Changes in the use of generic skills, 1997 to 2006

The skills challenge is greater in struggling cities

Qualifications across city groups, average 2004 to 2010

Patterns being reinforced through the skills system - at school level

Youth unemployment, 2007/10 average GCSE attainment including Maths and English, 2007/10 average

Can property markets sustain TIF?

What should city leaders be focusing on?

We need to think about cities in a different way

Old view Place is not important and cities are invisible (focus on problems) Individual places (Places as islands surrounded by open sea) Emerging view Places are distinctive and different (focus on opportunity) Inter-dependent places

Particular geography (e.g. neighbourhood)

Static analysis No principles about how places work

Overlapping geography (e.g. functional economy)

Dynamic analysis Developing framework about how places work

How are current policies supporting economic growth?

TIF: positive step towards financial freedoms needs to happen as soon as possible;
Local Government Resources Review: good that seeking to increase autonomy of cities but challenges around incentivising growth and responding to need; Enterprise Zones: mixed evidence from the past and learned some lessons. Very positive that fast-track TIF no magic bullet on their own; Regional Growth Fund: very wide remit about growth or mitigating public spending cuts? Local Enterprise Partnerships: positive that (mostly) over functional economies but questions about powers, funding, capacity. Localism in general regarded by many in private sector as confusing; Mayors: questions about powers, funding and geography.

We need to manage cities in a different way

Old view Emerging view

Wait for the centre to give out money tied to specific programmes and outputs
Regional and local public sector strategy and action

Use limited money wisely, define the local priorities and shape funding and investments to fit
New city region institutions and partnership with business, alongside local and neighbourhood strategy and action Local authorities as development facilitators, receiving financial incentives to grow Collaborate with neighbours to establish growth ambitions and delivery Risk and funding managed by cityregion and local authority

Local authorities as development managers Act on the basis of national targets

Risk and funding taken at the centre

Mayors the caveats

Mayors will not be silver bullets Current proposal for mayors limited

Other city leadership models exist (e.g. Manchester) Not all mayors will be good (many examples of bad mayors)

Few formal powers compared to international counterparts Local authorities instead of city regions

City leadership

City leaders should focus on:

City leadership needs:

City leaders need to be effective in:

Transport Planning & Housing Skills

Formal/hard powers Informal/soft powers

Decisionmaking

Representing
Coherence Collaborating

Mayors can increase the emphasis on these attributes

Decision making

The problem

How mayors could help Can take strategic decisions because: Elected by all residents, not wards Mandate to implement manifesto Security of tenure

Current structure makes it difficult to take tough decisions: Accountable to wards Election by thirds Leadership churn Example: planning

Representation

The problem Central government still controls key policy levers Businesses need single point of contact Example: transport spending

How mayors could help Direct election gives mayors higher visibility for Central government Private sector

Coherence

The problem Overlap in public sector organisations is costly and inefficient

How mayors could help

Power to convene using Formal powers Informal (soft) powers

Example: skills provision

Collaboration

The problem Economic areas not aligned with administrative boundaries Example: transport policy

How mayors could help

Can use soft powers to encourage cross-boundary coordination Metro mayors would be better placed in this regard

Recommendations: for mayors

Mayors should use their powers, visibility, and mandate to:
Focus on taking long term strategic decisions Lead negotiations with central government and business

Mayors should support growth through:

Decisionmaking Representing Coherence Collaborating

Influence and convene partnerships of public sector bodies to promote coherence Encourage collaborative working across local authority boundaries

How to deliver economic growth?

Private sector business & jobs growth

Targeted infrastructure & housing investment

Careful Investment, more responsibility, greater risks

A skilled & active workforce

Any Questions?
Joanna Averley
Email: Twitter: j.averley@centreforcities.org @joannaaverley