Wolverhampton and Walsall rise into fastest improving cities in the UK

Wolverhampton & Walsall have risen into the top improving UK cities on PwC’s Good Growth for Cities 2019 index.

However, the city is again the lowest scoring city in the overall index of all UK cities due to scoring poorly on variables such as skills, house prices to earnings and work-life balance.

Published today, the annual Good Growth for Cities 2019 sets out to show there’s more to economic well-being than just measuring GDP.

The index measures the performance of 42 of the UK’s largest cities, England’s Local Enterprise Partnerships (LEPs) and ten Combined Authorities, against a basket of 10 factors which the public think are most important when it comes to economic well being. These include jobs, health, income and skills, as well as work-life balance, house-affordability, travel-to-work times, income equality, environment and  business start-ups.

When measured against the priorities chosen by the public, four out of eight cities in the Midlands achieve scores above the UK average.

Wolverhampton & Walsall is ranked as the seventh top improving UK city, scoring above the UK average on transport and income distribution. However, it scored on or below average for all other indicators, including skills, house price to earnings and work-life balance, placing it as the lowest scoring city in the UK.

Coventry is the highest performing city in the West Midlands – placed 13th nationally in the top performing cities. Coventry scored strongly on income and work-life balance, whilst it scored poorly on environment. The city saw the biggest increase in score since 2015-17 in the income measure, and the largest decrease in score over the same period was in health.

Elsewhere in the region, Birmingham is the 14th fastest improving city. After a decade of consistently high performance Birmingham’s performance has slowed as it continues to build on an already high score. The city has seen strong improvements in new businesses helping to drive increases in jobs and income. However, the price of success has been a reduction in housing affordability and a decrease in work-life balance.

This year’s index sees almost nine in ten cities in 2016- 2018 having scores higher than the average for all cities in our base year of 2011-2013, highlighting the rate of recovery since the financial crisis. There is strong employment growth, which reflects the continued decline in unemployment, as well as improvements in work-life balance, perhaps as a result of more flexible working patterns becoming more acceptable.

The long term data suggests that performance over time on the index is not driven by a city’s starting position, but rather by a combination of local and national improvements in the economy. The figure below shows the change in average good growth index scores by variable across all cities since 2005-07 and 2016 – 18. Skills amongst the population of 16-64 year olds, alongside the number of new businesses created have seen the largest improvements in average scores over the period, however housing affordability and owner occupation have deteriorated over the period, alongside rising average commuting times.

The short term data tells a different story, as 11 cities in the index have witnessed a decline in their score relative to the previous index – this is partly driven by the fact that improvement (especially for top performers) has hit a relative ceiling.  However, the price of success has become increasingly evident, with declines in transport and housing highlighting the ongoing infrastructure challenges faced by UK cities. There has also been a decline in skills among young people (16-24) and a decline in overall health.

Midlands region chairman and office senior partner for PwC in Birmingham, Matthew Hammond, said: “It is encouraging to see new businesses and jobs are the variables with the largest improvement across the Midlands in this year’s index. Performing well in these indicators is key to securing long-term growth prospects for the region and for individuals as we attract investment into the region.

“We are seeing many of the cities performing above or around the national average across a range of variables, including new businesses, jobs and owner occupation. It’s testament to the strength of the West Midlands as a destination to live and work that we are seeing cities across the region, including Wolverhampton & Walsall, performing strongly in the index.”

All Local Enterprise Partnerships (LEPs) have seen absolute increases in environment scores but absolute decreases in owner occupation scores since 2015-17. Skills amongst people aged 25+ was the variable that saw the largest improvement compared to the 2015-17 index, whilst house price to earnings measure saw the largest decline.

Coventry & Warwickshire LEP was ranked 12th out of 37 LEP areas, and again was the Midlands best performing LEP with most scores at or above the UK average for all variables except environment.

Greater Birmingham & Solihull LEP saw the biggest increase in its new businesses score, and the largest decrease in income distribution. Black Country LEP scored strongly on jobs but saw a decrease in work-life balance, and Worcestershire LEP scored well on new businesses but saw a decrease in its house price to earnings ratio score.

The West Midlands Combined Authority sits in the middle of all combined authorities across Englands with an index score of -0.01. The West Midlands has high scores for work-life balance, new businesses and income distribution. The authority area, however, has lower scores for skills, income and owner occupation.

PwC partner and local government leader Jonathan House said: “In an era of political, technological and environmental disruption, cities and regions that want to get ahead, need to do things differently. Even with the uncertainty of Brexit, over the last year, local leaders have had significant success in delivering good growth in their cities and regions.

“Local leaders need to take a broad view on what economic success means, focusing on the outcomes they want to achieve in terms of inclusive growth, community resilience and improved experience, and crucially, having a plan to translate those ambitions into reality.

“Skills amongst the working age population, alongside the number of new businesses created, have seen the largest improvements; this is a result of leaders focusing on building new opportunities and investing in the talent of their city and region.

“The UK’s cities are known globally for their skills, innovation and entrepreneurial spirit. Our most successful cities don’t compete against other UK cities, they compete against cities across Europe, the Middle East and the US. As the UK’s position on the world stage shifts, cities and regions will need to reposition themselves too, and consider how they can stand out and compete globally, improve productivity and support innovation, while also creating places that are fair and inclusive. ”