Several Yorkshire cities amongst fastest improving cities

Improving skills levels and new business formation have been the key long-term drivers of city growth since the financial crisis and Yorkshire cities are among the fastest growing for the second year running.

According to the latest Demos-PwC Good Growth for Cities 2018 index, which ranks cities on a combination of economic performance and quality of life, Preston topped the most improved city rankings since last year’s index, with other big improvers being Hull and Wakefield & Castleford, which had previously been low performers in the index. Doncaster had the fourth highest increase in score for new businesses.

However, much of this new cohort of improvers reflects the impact of substantial falls in unemployment rates reaching out across all parts of the UK.

Analysis shows that the average city in the index improved its good growth score significantly over 10 years from 2005-7 to 2015-17, and has now more than recovered from the recession and downturn triggered by the global financial crisis.

Improving average skills levels for the UK’s youngest workers and driving new business formation have been the strongest drivers of good growth over the past decade, while unemployment levels have fallen back to around pre-crisis levels.

However, this long-term retrospective analysis also highlights areas where there have been structural deteriorations for cities across the UK, particularly around reduced housing affordability and owner occupation rates and steep increases in average commuting times.

The top 10 highest ranked cities in our latest index, which relates to the period 2015-17, and the most improved since last year’s index were:

Source: PwC analysis

The index measures the performance of 42 of the UK’s largest cities, England’s Local Enterprise Partnerships (LEPs) and the nine Combined Authorities, against a basket of ten indicators based on the views of the public as to what is key to economic success and wellbeing.

These include employment, health, income and skills – the most important factors, as judged by the public – while housing affordability, commuting times, environmental factors and income inequality are also included, as is the number of new business starts.

The scores of Combined Authority areas in Yorkshire & North East region are varied. West Yorkshire Combined Authority is the Combined Authority area with the third highest score in the UK, and above the average compared to all LEP areas. However the North East and Sheffield City Region Combined Authority areas are ranked at 7^th and 8^th of a total of 9 across the UK.

Since 2014-16, each Yorkshire and North East city has experienced increases in the jobs and income elements of the index. This is a result of the pick-up in the UK economy between 2013 and 2017 and something which we have seen across the UK.

John Hawksworth, chief economist at PwC, said:“Almost all UK cities have seen improved good growth scores in recent years, driven primarily by cyclical falls in unemployment rates that have now rippled out from the South East of England to regions like the North East that were previously lagging behind.

“But the more interesting perspective is provided when we look at the whole decade from 2005-7 to 2015-17, which covers a whole economic cycle and therefore allows us to identify deeper structural trends. The good news here is that successive cohorts of young workers have higher average skill levels, which is pushing up index scores together with rising rates of new business creation in most cities.

“But the flip side of this success has been worsening housing affordability and consequent falls in home ownership rates precisely for those young people who have invested in acquiring new skills. As they are pushed further from city centres to afford a place to buy or even rent, average commuting times have also risen. Having largely recovered from the financial crisis, addressing the housing and infrastructure supply constraints that drive these negative trends will be key challenges for the next decade for both central and local government, looking beyond the immediate issues around Brexit.”