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Abstract for:

The Economic Performance of UK Cities: Can Urban and Regional Policy Make a Difference to the North-South Divide

Henry  Overman,  March 2015
Paper No' CEPEA025: | Full paper (pdf)
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Keywords: UK cities; urban economies; recession; #ElectionEconomics; spatial equilibrium; labour; housing market; wages; regional disparities

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There are large variations in economic performance across UK cities and on some measures, they have widened since the global financial crisis. All main parties promise action to reduce them, but there is little difference between them in terms of the policies that they would pursue to meet this objective. Unfortunately, the traditional policy mix is largely ineffective. There is a growing recognition that greater local control is needed to improve policy effectiveness, although there is disagreement about the form this devolution should take. London’s strong economic performance plays a large part in explaining widening disparities. Providing an effective counter-balance to London may require policy aimed at ‘rebalancing’ to be more spatially focused – for example on Manchester. Concentrating resources in this way is controversial and difficult for constituency-based politicians (in both central and local government). It is helpful to remember that we ultimately care about the effect of policies on people more than on places. Efforts to rebalance the economy should be judged on the extent to which they improve opportunities for all, rather than whether they narrow the gap between particular places.