Southern cities continue to dominate top of Demos-PwC Good Growth for Cities Index

Southern cities continue to perform strongly when assessed against public priorities for growth according to the latest, according to the annual Demos-PwC Good Growth for Cities Index, which is topped by Oxford while Reading and Southampton also appear in the top 10.

The Index ranks 50 of the UK’s largest cities (generally considered those with populations of at least 350,000 people), plus the London boroughs as a whole, based on people’s assessment of 12 key economic wellbeing factors, including jobs, health, income and skills, as well as work-life balance, house affordability, travel-to-work times, income equality, environment and business start-ups.

For the first time, two new indicators – safety and high street and shops – have been added to the index. The separate GVA analysis included in the report takes into account a city’s sectoral make-up, the impact of the use of the furlough scheme to protect jobs, and rates of Universal Credit claims, Covid infection rates and mobility data to estimate GVA growth for 2021 and 2022.

Oxford, Bournemouth, Swindon, Reading and Milton Keynes make up the top five in the overall index while Southampton sits in 10th, with Brighton just below in 12th and Portsmouth further down the index in 22nd.

The report shows that provincial cities are expected to show stronger economic growth than those that are larger and more metropolitan and there is an increased focus from the public on wellbeing, the environment and income distribution.

Cities including Bournemouth, Exeter and Plymouth, are expected to see the strongest gross value added (GVA) growth rates for 2021 and 2022, as the new analysis shows the sectors most badly affected by the pandemic are showing signs of sharper recoveries than what was originally expected. Cities in the South East are expected to show an average GVA growth rate of 7.9% for 2021 – above the 7.3% UK average. However, Medway and Southend, which placed 40th and 43rd respectively in the Index, are both expected to record below average GVA growth for 2021.

Keith Harrington, South East Regional Market Leader at PwC said:

“As we look forward it’s encouraging to see so many of our cities performing well in the Index, particularly in terms of their expected economic growth as we move beyond the pandemic. It’s clear that inequalities still remain within regions and we need to address this. The progress we’re seeing in these areas, along with the changing priorities among the public, have presented a window of opportunity that won’t be open forever. It is important that we address the areas in which our region falls down, such as in house price to earnings and income distribution.

“This report sets out a series of recommendations for policymakers and businesses which includes developing skills and investments to deliver green growth in a sustainable and fair way. It’s more important than ever for local governments, businesses and communities to work together to address some of these key issues. At PwC, we recognise the huge opportunities that the region brings, and all of us within the region have a role to play in contributing to the future success and growth in the South East.”

Shifting public priorities for growth

The Demos-PwC Good Growth for Cities Index measures cities’ performance against a series of 12 variables, each one weighted relative to how important it is considered by the 1,000 people surveyed as part of the study. In comparison to last year’s report, the importance given to these indicators by the members of the public who have been polled has shifted considerably. Nationally, jobs and skills, two of the most important variables last year, see significant decreases in their importance in the updated Index, most likely as a result of high levels of confidence in the employment market. In contrast, the environment and income distribution have seen significant increases.

Of the 12 variables included in this year’s index, the biggest driver for improvement for cities over the last three years has been better work-life balance. Broad improvements in the skills of older workers, as well as income distribution and life expectancy, have also helped the gap narrow slightly between the highest and lowest ranked cities.

However, several of the scores for several variables – those most likely to have been negatively impacted by the pandemic – have fallen over the past two years, including the number of new businesses opening, the strength of the high street and owner occupation rates.

Justin Martin, devolved and local government lead for PwC, said:

“We’re emerging from the pandemic with a new set of priorities, largely focused around fairness, the environment and work-life balance. It’s likely that the way we have lived over the past two years has led to people reflecting on what they value the most. This appears to be having a significant impact on the fortunes of different places, with the cities that perform well not only having strong local authorities but also being characterised by strong environmental and safety credentials.

“While the vision set out in the Levelling Up White Paper centred primarily around geographic inequality, it did recognise that there are multiple societal disparities which affect people and could hinder the economic recovery. We know from our research that women and people from minority ethnic backgrounds are the most likely to have been negatively impacted as a result of the pandemic.

“Central government, local government and businesses all have a role to play in developing localised plans to address not only the regional inequalities but the societal gaps that also exist within their cities, towns and communities.”