‘Recovery will be unevenly spread’

Economic recovery is likely to be unevenly spread across the country in 2011, with some cities bouncing back from recession and others needing additional financial support from central government, according to the Centre for Cities annual index, Cities Outlook 2011

Economic recovery is likely to be unevenly spread across the country in 2011, with some cities bouncing back from recession and others needing additional financial support from central government, according to the Centre for Cities annual index, Cities Outlook 2011

It says Hull, Doncaster and Northampton, which suffered big job losses during the recession, saw the biggest reductions in unemployment claimant count between March 2010 and November 2010.  These places all saw drops of 1.2 percentage points in the rate of people claiming Jobseekers Allowance, more than twice the UK average (0.5 percentage points).

It identifies Milton Keynes, Reading, Aberdeen, Leeds and Bristol as places to watch as they "will be better-insulated from the economic impact of the spending squeeze, and have high potential to create private sector jobs". It says: "They have lower vulnerability to public sector job losses and spending cuts, and given the right powers and freedoms could make an even bigger contribution to the national economic recovery."

It adds, though, that the performance of the UK’s largest cities will remain crucial since the biggest 11 provide more than one in three (37%) of Britain’s private sector jobs.

It identifies five cities which might need additional help – Sunderland, Liverpool, Birkenhead, Swansea and Newport. "These places will be affected more by Government spending cuts, given they have low skill levels and levels of business activity, more people employed in the public sector, and more people claiming unemployment benefits," it says.  "They will need additional financial support from central government, and a realistic local plan of action."

It adds that some regions will suffer more than others, for instance,  seven out of ten regions facing the biggest welfare spending cuts by 2014/15 are in the North West.

Alexandra Jones, Chief Executive of the Centre for Cities, said: "Buoyant cities like Leeds and Bristol, which have been fast-growing and have lots of private sector jobs, are best placed to lead the UK’s recovery.  It’s time these places had new financial freedoms such as full control over the local business rate, and new powers to raise money.  They could also benefit from having London-style mayors.

“During 2011, the UK cities most dependent on the public sector, and which have seen slower economic growth over the last decade, will find it more difficult to rebalance towards the private sector. These cities will need realistic plans of action to ride out the spending cuts and create jobs – but they will also need additional financial support from central Government.”

Lynn Ferguson, IBM Director for Local Government, said: "Cities Outlook 2011 highlights some of the specific challenges confronting cities today. Leaders will need to act decisively and collaboratively within their cities to achieve competitive advantage and drive economic growth.

"The ‘Smartest Cities’ will be those that have an integrated view of the information associated with city systems such as energy, transport, healthcare and water. Those that do will be best placed to deliver improvements in the quality of public services and in the creation of attractive locations for people and business alike.”





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