Study finds cities need a bespoke growth strategy to win fair share of funding

Manchester aerial view

A new study examining the growth and performance of 11 regional cities in the UK has declared that Manchester is a ‘booming city’, while Liverpool is a ‘solid performer’.

The research is by Belfast-based OCO Global, which works with companies to help international business thrive and with governments to design and deliver growing, sustainable, future-focused economies.

The cities were marked on a range of 37 data points over a decade that highlight strengths or challenges in each city.

It resulted in four groups emerging when cities were clustered by overall scores.

Edinburgh stood apart as a Top Tier city that performed strongly across all areas.

Close behind were the three Booming Cities of Belfast, Bristol and Manchester which were leaders in many pillars but still had areas for improvement.

The third group of Solid Performers typically ranked in the top five in their strongest pillars but were ranked lower in other areas. These included Cardiff, Leeds, Liverpool, and Newcastle.

The final group of Moderate Performers (Birmingham, Nottingham, and Sheffield) ranked towards the bottom of pillars, although all had at least one stronger performing pillar.

A key finding from the analysis was how cities excelled in different areas and arrived at their final score in different ways. For example, Bristol scored highly for education and prosperity, while its fellow booming city, Manchester, scored highly on economy, wellbeing, and property.

A key fact that central government has failed to realise is that cities tend to excel in different areas, and there is no one model of successful city growth that can be imposed on cities.

Greater Manchester won the most FDI projects (449) and was ranked first for GDP growth. The city also stood out as one of the best cities for wellbeing, with the highest rates of improvement in healthy life expectancy and air quality. Economic growth and investment, however, have not always been reflected in the prosperity of citizens, with unemployment and wage rate growth ranking lower than other indicators.

Meanwhile, strong employment and wage growth helped Liverpool improve the prosperity of its citizens, but wellbeing remained sluggish due to lower healthy life expectancy and fewer people in good or very good health.

Overall, the city’s economy didn’t perform as well as other cities in the study, with GDP growth and FDI projects won towards the bottom of the rankings. Liverpool, however, remains attractive with lower house prices and office rental prices.

The report found wide disparity in the amount of money each city received from Levelling Up, City Deals and Shared Prosperity funds.

Of the £6bn allocated from these sources, ‘Boomers’ received on average £748 per head compared with £420 for Solid Performers and just £133 for Moderates. Edinburgh received £616 per head, due primarily to less money being provided through the Levelling-Up fund.

Mark O’Connell, Executive Chairman of OCO Global, said: “Levelling-up policies are meant to redress decades of structural imbalance between UK regions, but the study suggests that the way funding is allocated is actually helping exacerbate those inequalities.

“Funding tends to go to cities which are best at applying for it rather than those with the most need. It gives a further advantage to already booming cities which can demonstrate they are successful at spending funds.

“This centralised funding system isn’t giving enough consideration to unique local challenges, or the different areas different cities excel in. If we really want to unlock cities’ potential, we need to match political devolution with economic devolution and give elected mayors the authority and resources to make long term plans to meet the needs of their economy and citizens. A good example of this is Manchester’s decision to successfully take the city’s transport system back into public hands.”

He added: “While there is undoubtedly a strong correlation between funding and success, cities also have their own agency. Although they need to ask why funding isn’t being distributed equally, cities with proactive policies to improve connectivity and wellbeing, enhance skills and inclusiveness in the workplace, and promote themselves as investor-friendly can succeed.

“All of the cities in the report grew, but they excelled in different areas. Consequently, there is no one-size-fits-all-strategy to deliver growth. Rather than wait for Westminster to provide a lead, city authorities need to identify their own regional strengths and weaknesses, ensure that elected mayors have more discretion to allocate money locally, and develop bespoke growth strategies.”