February 2014
Cities, growth and poverty
Evidence paper 3: Case studies
Duncan Adam, Gaby Atfield, Anne Green & Ceri Hughes
Cities, growth and poverty: case studies
1
Acknowledgements
This paper is part of a wider project focusing on Cities, Growth and Poverty. The research
was commissioned by the Joseph Rowntree Foundation and conducted by a team consisting
of Neil Lee, Paul Sissons and Ceri Hughes from The Work Foundation, Anne Green, Duncan
Adam and Gaby Atfield from the Institute for Employment Research at the University of
Warwick and Professor Andrés Rodríguez-Pose from the London School of Economics. The
research was undertaken in early 2013.
We would like to thank the Joseph Rowntree Foundation for supporting this research, and in
particular the project manager, Josh Stott. The project has also benefited from the insights of
an advisory group, including Alex Jones and Andrew Carter (Centre for Cities), Ed Cox
(IPPR North), Michael Parkinson (Liverpool John Moores University), Tom Aldred (The
Cabinet Office), Tom McInnes (New Policy Institute), Ruth Lupton (London School of
Economics), and Tom Bridges (Leeds City Region). We are grateful for their support and
would like to thank them for contributing to this project.
Cities, growth and poverty: case studies
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About the authors
Anne Green, Gaby Atfield and Duncan Adam work at the Institute for Employment Research
at the University of Warwick. Anne Green is a Professorial Fellow with interests in local and
regional labour markets, the spatial aspects of economic, social and demographic change
and trends in employment and non-unemployment. Gaby Atfield is a Research Fellow. Her
interests include differential access to the labour market and the relationship between
employment and social inclusion/exclusion. Duncan Adam is a Research Associate and his
research has focussed on welfare to work, interactions between market and non-market
activities, and low-paid, insecure work.
Ceri Hughes is a Research Assistant at The Work Foundation. Her research has focussed
on aspects of labour market disadvantage.
Cities, growth and poverty: case studies
3
Contents
Acknowledgements................................................................................................ 2
About the authors .................................................................................................. 3
Contents ................................................................................................................. 4
Executive summary................................................................................................ 5
1. Introduction ........................................................................................................ 8
2. Milton Keynes Case Study ............................................................................... 10
3. Oxford Case Study ........................................................................................... 20
4. Glasgow Case Study ........................................................................................ 24
5. London Case Study .......................................................................................... 34
6. Swansea Case Study........................................................................................ 38
7. Leeds Case Study ............................................................................................ 47
8. Barnsley Case Study ........................................................................................ 60
9. Coventry Case Study ....................................................................................... 68
10. Blackpool Case Study .................................................................................... 81
11. Derry-Londonderry Case Study..................................................................... 86
Cities, growth and poverty: case studies
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Executive summary
The Joseph Rowntree Foundation commissioned The Work Foundation, the Institute for
Employment Research and the London School of Economics to undertake a project on the
links between cities, growth and poverty. The main project report – ‘Cities, growth and
1
poverty: a review of evidence’ – is available from the Joseph Rowntree Foundation . This
report presents a series of city case studies, which explore:

The extent to which the drivers of economic growth and poverty alleviation have
been/can be determined at city level

The extent to which economic growth has been linked to poverty alleviation, and if
so, how this has been/is being done (i.e. the policy levers that have been/ are being
used)
Key findings
The scale of economic change in the 1980s and 1990s has impacted on the geography of
economic growth and poverty at inter- and intra-city scales.
Following the economic crisis and the 2010 General Election the context for policy
action has changed, bringing a disjuncture from what went before. Reductions in public
funding are more apparent in some cities than others, and there are marked differences in
access to European funding.
Although less significant than these economic changes and the associated cutback in
public spending, governance changes are especially marked in England where there
are variations in the extent to which LEPs (concerned solely with economic growth) align
with cities; former multi-agency partnership arrangements (based around MAAs/ LSPs, etc.)
continue to some extent.
Economic growth and poverty alleviation
The extent of consistency in approaches to economic growth and poverty alleviation
varies between cities, although most have a concern with ‘narrowing the gap’ at city level.
Sectoral strategies and cluster approaches are a component in growing ‘high value’
knowledge economy jobs (e.g. in advanced manufacturing). At city level there are also
concerns with helping ensure the viability of sectors that are important locally (e.g. tourism,
health and related, etc.).
1
Link: http://www.jrf.org.uk/publications/cities-growth-and-poverty
Cities, growth and poverty: case studies
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Employment or GVA? Political pressures at city level mean a foremost emphasis on
employment vis-à-vis GVA. Employment growth in low wage low productivity jobs can
depress GVA, but it is these types of jobs that may be most likely to provide employment
opportunities for those moving off out-of-work benefits into employment. Different types of
growth provide different types of employment opportunities.
Strategic approaches tend to mention both economic growth and policy alleviation –
but emphasis varies, including between stakeholders within the same city. In certain cities,
policies to alleviate poverty (e.g. the living wage) may be viewed as counter to promoting a
commercially competitive business environment. Elsewhere stakeholders may argue that
dealing with poverty is likely to have economic benefits.
Anti-poverty strategies, fairness commissions, living wages, credit unions, etc. are
indicative of concerns with poverty and are means of cities showing that they are ‘doing
something’ to address poverty. The rhetoric of poverty intervention varies to some extent
between cities: in some instances tying in with activation themes from welfare reforms, while
in others concerns with social justice appear foremost.
Activity and policy levers
Neighbourhood-based approaches to tackling poverty in the late 1990s and 2000s:
area-based funding (e.g. NDC, LEGI, Working Neighbourhoods Fund, Future Jobs Fund,
etc.) gave scope for targeting particular neighbourhoods/sub-groups. A reduction in areabased discretionary funding reduces scope for such action. Nevertheless a focus on the
most deprived neighbourhoods remains.
Whilst there are examples of ‘good practice’ at the micro level, there is much less
quantitative evidence of success at the macro level. Where policy assessment and
analysis exists it is easier to find examples of ‘what works’ at the level of individuals than to
find a quantitative assessment of the impact of policy interventions in aggregate.
There is widespread recognition that poverty alleviation measures require multiagency working and should take account of health interventions/housing strategies, etc.
Community Budgets have been used to focus on inter-related issues (e.g. worklessness,
substance misuse, parental mental health, etc.).
Employer-led training, in partnership with local FE colleges, has been used to help
align supply with demand for skills. In some cities employers have been involved in the
design of training courses to help workless people train for specific roles – sometimes with
guaranteed interviews. There is scope for continuing this in the workplace with training in
functional Maths and English.
Public procurement and use of Section 106 agreements have been a means of
delivering affordable housing, apprenticeships and jobs (especially in construction) for local
residents.
Cities, growth and poverty: case studies
6
Capital investment in physical infrastructure and the public realm is identified as
important in economic growth, inward investment and business attractiveness - and can be
part of a strategy to boost demand for skills.
Changes in local government funding offer new levers at city level (e.g. New Homes
Bonus), but there is little evidence of use as yet.
There is likely to be greater emphasis in future on local stakeholders guiding, steering
and focusing national programmes and local services.
Cities, growth and poverty: case studies
7
1. Introduction
The Joseph Rowntree Foundation commissioned The Work Foundation, the Institute for
Employment Research and the London School of Economics to review the evidence on the
links between cities, growth and poverty. The research project followed a four-stage
methodology, including the development of a framework, a review of the evidence, data
analysis and case study work in ten UK cities. In addition to this evidence paper, which
considers the links between growth and poverty in ten UK cities, evidence papers relating to
the evidence review (Evidence Paper 1) and data analysis (Evidence Paper 2) are available
at www.theworkfoundation.com.
The case studies are necessarily selective and particularly emphasise human capital issues.
It should be noted that much of the fieldwork for these case studies – interviews and desk
research – was undertaken in early 2013.
1.1 Selection of case studies
Case studies have been selected to include cities with different experiences of average GVA
growth and growth in poverty. Some are more detailed (in depth) than others (light touch).
The final selection also includes representatives from each of the nations of the UK.
Growth in poverty
Declining poverty
Higher than
Milton Keynes (in-depth case
Glasgow (in-depth case study)
average GVA
growth
study)
Oxford (light-touch case
London (light-touch case study)
study)
Lower than
Coventry (in-depth case
Swansea Bay (in-depth case
average GVA
study)
study)
growth
Blackpool (light-touch case
study)
Leeds (close to average
experience) (in-depth case
study)
Barnsley (light-touch case study)
We also include a case study of Derry/Londonderry (Northern Ireland).
1.2 Methodology
The case studies, informed by reviews of documentary evidence, are intended to outline how
the ‘story’ of the city, and the drivers and levers, have contributed to the position of the case
study city. They are also designed to help identify ‘what works’, ‘what does not work’ and
learning points. To elicit further insights on these questions and views on the ‘added value’
Cities, growth and poverty: case studies
8
of city-level policy (if any) interviews with local players (e.g. representatives of local authority
economic development teams, individuals responsible for neighbourhood initiatives, LEP
representatives, learning providers, etc.) have been conducted. (In order to protect the
anonymity of some interviewees who wished to remain anonymous, those interviewed are
not listed or identified).
The case studies outline the geographical and historical context of the cities, and key
features of policies to foster economic growth and to alleviate poverty. Each follows the
same main structure with the following key headings:

Introduction

Economic growth

Poverty alleviation

Linking economic growth and poverty alleviation
Cities, growth and poverty: case studies
9
2. Milton Keynes Case Study
Higher than average GVA growth, growth in poverty
1. Introduction
In contrast to those cities that have had to contend with substantial economic restructuring
and labour market adjustment, Milton Keynes ranks alongside some of the most successful
city economies in the UK.
Following the establishment of the New Town of Milton Keynes in 1967, the Milton Keynes
Development Corporation set out a master plan for the development of the area. Given its
strategic location it is perhaps unsurprising that the vision for the town and the strategies that
supplemented it assumed that Milton Keynes would always be associated with growth. The
vision was highly centralised, and responsibility for delivering growth, house-building,
infrastructure, jobs and community facilities was retained by the Homes and Communities
Agency until recently when they were passed on to Milton Keynes Council.
This partially explains the degree of consistency in the approach to economic development
that has been adopted in Milton Keynes, though the dominance of certain sectors has
inevitably shifted. Developing a large commercial and service sector, attracting and
supporting small businesses, and creating a spacious and attractive environment were key
development priorities from the beginning, with the original investment strategy targeting the
business and insurance sectors, as well as electronic components, packaging and
2
pharmaceuticals .
The success of Milton Keynes is evident on a number of measures:
 Between 1997 and 2009, Gross Value Added (GVA) increased by 96 per cent from
3
£3.5 billion to £6.8 billion and it has been the fastest growing city since 2001,
achieving almost 17 per cent population growth over the decade.
 Median weekly earnings (gross) for residents working full time have been rising
4
steadily from £456 in 2004 to £537 in 2011 .
 In recent years the number of jobs in Milton Keynes has been growing at roughly twice
5
the growth rate of the local labour supply and the current goal is to sustain this
6
balance through the creation of 1.5 new jobs per dwelling .
2
Burrows, B. (1987) Milton Keynes: A Model for Regenerating our Cities? Long Range Planning, 20(1): 57-77.
MKC, Employment Technical Paper: The Milton Keynes Economy 2012
4
Milton Keynes Inward Investment Plan 2013
5
Moore, M. (2012) Note on commuting to and from Milton Keynes, MKC/25
3
Cities, growth and poverty: case studies
10
The city attracts more in- than out-commuters and has more jobs than working-age residents
with the skills to do those jobs, resulting in a local skills gap. Commuters, whether travelling
into or out of Milton Keynes, are predominantly in skilled occupations: figures from 2001
indicate that 60 per cent of those travelling to work in Milton Keynes were managers, senior
7
officials and professionals, compared to 62 per cent of out-commuters .
The Unitary Authority of Milton Keynes covers the main urban area of the city but the
functional economic geography of Milton Keynes lies across a number of administrative
boundaries. In terms of commuting patterns, Milton Keynes is strongly integrated with
8
Bedfordshire and Northampton as well as the rural east of Aylesbury Vale District .
This study considers Milton Keynes in terms of its functional economic geography, or travelto-work area, which includes the local authority of Aylesbury Vale. This area also forms the
heart of the South East Midlands Local Enterprise Partnership (SEMLEP), which includes
the surrounding areas of Bedford, Central Bedfordshire, Luton, Northampton, Corby,
Daventry, Kettering, South Northamptonshire, Aylesbury Vale and Cherwell.
Drivers of growth
There are a number of factors contributing to this strong record on economic growth:
 Infrastructure and transport: Milton Keynes has good transport links and is
strategically located between London and Birmingham, and Oxford and Cambridge.
The attractiveness of this location is testified to by the number of companies that have
9
located their headquarters in the area . The council is also prioritising broadband
investment to ensure that the area remains attractive to businesses.
 Planning and agglomeration: Milton Keynes has functioned as an overspill town for
London since the post-war period. This role in the regional economy was reinforced
10
when it was designated an area for sustainable housing growth in the early 2000s .
There has been a corresponding pro-development approach to planning and housing
policy, demonstrated by an 18 per cent increase in the housing stock between 2001
and 2011.
 Entrepreneurship, innovation and the knowledge economy: Milton Keynes has
prioritised new firm growth, seeing innovation and the knowledge economy as
6
Part of the Council’s Core Strategy, cited in Milton Keynes Inward Investment Plan 2013
Milton Keynes Local Economic Assessment, Refresh 2013
8
For a discussion of commuting patterns in the Milton Keynes South Midlands sub-region see Cobbold, C. &
Ching, C. (2008) Review of the Milton Keynes Long Term Economic Vision: The Architecture of the Economic
Vision, version 2.0, a DTZ report for MKELP.
9
Examples provided in the Milton Keynes Inward Investment Plan 2013, p.9
10
Government’s Response to the Transport, Local Government and the Regions Committee Report: ‘The New
Towns: Their Problems and Future’, Cm 5685 (2002) http://www.officialdocuments.gov.uk/document/cm56/5685/5685.pdf
7
Cities, growth and poverty: case studies
11
11
important to its economic success . The inward investment team within the council
acts as a liaison for businesses considering moving to the area and provides a range
of business support services to facilitate relocation and retention.
Key features of the economy
Milton Keynes has a service-based economy, with large numbers of jobs in banking, finance
and insurance (43,000 jobs, 30.1 per cent of all employees) and the wholesale and retail
12
trade (37,300 jobs, 26.2 per cent) . There has been a shift from production towards these
service sectors, with only the manufacturing sector in decline between 1998 and 2008. Jobs
in manufacturing and construction now only account for a small proportion of total jobs, at 8
per cent and 2.5 per cent respectively. The city also has one of the highest levels of
business start-ups in England, with roughly 54 start-ups recorded per 10,000 members of
13
the population in 2011 .
The employment rate was higher than for the rest of the South East and England as a whole
between 2004 and 2008, but fell below the rate for the South East between 2009 and
14
2010 , suggesting that the local economy, which is dominated by private sector firms, felt
the effects of the recession relatively early. The employment rate has since begun to
recover, reaching 74.9 per cent between July 2011 and 2012.
Milton Keynes has one of the highest proportions of private to public sector employment
15
(with a ratio of 3.8) . Some of the larger employers in Milton Keynes include the Open
University, Santander, GE Healthcare, Volkswagen UK, Mercedes Benz and the Home
16
Retail Group, as well as Milton Keynes Council and the NHS .
2. Economic growth and development in Milton Keynes
The Sustainable Communities Plan (2003) identified and sought to address a range of
strategic challenges in the South East region, including increasing housing supply and
17
making home ownership more affordable . Within this, Milton Keynes, part of the South
East England Development Agency (SEEDA), was to become a key area for growth.
The introduction of the Regional Development Agencies, and the government’s Sustainable
Communities Plan re-specified the strategy for the area around the promotion of growth
11
See Milton Keynes Economic Development Strategy 2011-2016
MKC, Employment Technical Paper: The Milton Keynes Economy 2012
13
Centre for Cities (2013) Cities Outlook 2013. http://www.citiesoutlook.org/summary/coventry
14
Milton Keynes Local Economic Assessment, Refresh 2013
15
Centre for Cities (2013) ibid
16
MKC, Employment Technical Paper: The Milton Keynes Economy 2012
17
ODPM (2005) Milton Keynes & South Midlands Sub-Regional Strategy: Alterations to Regional Spatial
Strategies covering the East of England, East Midlands, and South East of England, London: TSO.
12
Cities, growth and poverty: case studies
12
18
areas and ‘knowledge-driven hubs’ in key areas .
Much of the development of Milton Keynes was shaped through a series of formal policy
networks, or partnerships, where members of the council and other local actors were able to
interact with central government representatives and whose agendas appear to have been
19
largely shaped by the promise of government sponsored growth . For example, under the
Milton Keynes Prospectus, long-term business plans and local area agreements were co20
ordinated with plans for sub-regional and national infrastructure .
The main partnerships concerned with economic and labour market issues were the Milton
Keynes Local Strategic Partnership (MKLSP), the Economy and Learning Partnership
(MKELP) and the Milton Keynes Partnership (MKP, 2004-2011), comprising Milton Keynes
Council, the Homes and Communities Agency and MKLSP representatives. The main
function of the latter partnership was to integrate local interests into the new town
development programme. The partnership was tasked with enabling sustainable growth, and
particularly with ensuring that the house building targets required by the growth strategy
21
were met .
Whilst Milton Keynes has always been a key driver of economic growth within the
surrounding area, this is particularly the case within the South East Midlands Local
Enterprise Partnership (SEMLEP). This contrasts with the RDA approach, which left Milton
Keynes at the intersection of a number of different development agencies.
In addition to co-ordinating bids for the Regional Growth Fund and other sources of funding,
the priorities for the LEP partners are to:

Attract and encourage enterprise and business formation

Ensure that transport and infrastructure planning is aligned with national investment

Tackle the common regional challenges of low skills, productivity and employment,
particularly in disadvantaged neighbourhoods and amongst certain groups, and

Encourage sustainable development through the development of green
infrastructure and climate change adaptation, as well as carbon reductions, and
improving health and wellbeing
Following the development of the Strategic Investment Plan, from 2015 the SEMLEP will be
able to bid for funding from a single planned capital pot that will cover transport, housing and
18
Cooke, P., Davies, C. & Wilson, R. (2002) Ch11: Urban networks and the new economy: the impact of clusters
on planning for growth, in I. Begg (ed.) Urban Competitiveness: policies for dynamic cities.
19
Cochrane, A. & Etherington, D. (2007) Managing local labour markets and making up new spaces of welfare,
Environment and Planning A, 39: 2958-2974.
20
Calcutt, J. Ch. 8 Incentives for Sustainable Communities, in The Smith Institute (2006) Incentives for Growth
21
Cochrane, A. & Etherington, D. (2007) ibid
Cities, growth and poverty: case studies
13
skills.
Local initiatives promoting economic growth
The growth of employment and firms has always been at the core of economic strategies in
Milton Keynes, specifically the transformation of Milton Keynes into a diverse and
22
competitive knowledge-based economy that will offer ‘well-paid employment to all those
23
living within the City’ . However, it is not entirely clear how inward investment strategies
have targeted businesses that would create skilled employment as distinct from a more
generic commitment to facilitating inward investment in general, or whether residents have
managed to secure well-paid employment.
Economic regeneration is also to be achieved by improving access to training and job
24
opportunities, particularly for those with no or low-skills .Relative to the rest of the region,
educational attainment in Milton Keynes has tended to be lower. Skills development is
therefore seen as the main solution to labour market challenges such as unemployment and
low-wage work. This is a long-term strategy, but there have been signs of improvement in
recent years: between 2001 and 2011 Milton Keynes registered one of the largest increases
25
in the proportion of the population with NVQ level 4 or higher .
The long-term economic vision (2004-2034) is to be achieved through a series of
‘transformational projects’, which include:
 Developing an integrated marketing, inward investment and business support
function: the council aims to provide businesses with one point of contact to facilitate
relocation and start-ups in the area. The function of the inward investment team is to
facilitate relocation and start-up activities by providing business support services, for
example by providing access to commercial property databases and assisting with
recruitment from the local labour market.
 Establishing a new university in Central Milton Keynes: the Open University is based
in Milton Keynes but because it focusses on a distance learning model of educational
delivery the local economy will not benefit to the same extent from the spending power
of the student population. The city is attempting to create a new city university,
opening a University Campus in Milton Keynes through which the University of
Bedfordshire will deliver undergraduate and postgraduate degrees. It is hoped that the
University Campus will provide enterprise-focussed continuing professional
development courses in partnership with local businesses.
 Employer-lead skills strategies: the manager of the Neighbourhood Employment
Programme attends inward investment meetings with companies that are looking to
22
A key priority within the Milton Keynes Economic Development Strategy 2011 - 2016
Milton Keynes Economy and Learning Partnership/SEEDA (2004) From New Town to International City
24
Milton Keynes Economic Development Strategy 2011-2016
25
TWF analysis (2013) http://www.theworkfoundation.com/blog/1075/Census-2011-Skills-are-moving-south
23
Cities, growth and poverty: case studies
14
relocate to the area to ensure that local training initiatives address their skills needs.
Milton Keynes College also offers bespoke training courses and apprenticeships for
local businesses.
3. Poverty alleviation in Milton Keynes
The benefits of economic success have not been universally enjoyed: Milton Keynes
performs poorly relative to the South East region in terms of educational attainment and on a
number of poverty-related measures.
The unemployment rate was 3.6 per cent in February 2013, lower than for the rest of the UK
but higher than the rates for South East England (2.6 per cent) and SEMLEP (3.3 per cent).
This pattern has led to Milton Keynes being designated a regional hotspot for
26
unemployment .
There are also concerns about youth unemployment and long-term unemployment. Young
people made up 22 per cent of the unemployed population in February 2013, whilst 24 per
cent of claimants had been claiming Job Seeker’s Allowance for at least a year, higher than
the rate for the South East.
27
Roughly one in five children in Milton Keynes live in poverty , a rate that is considerably
higher than the child poverty rate for the South East region as a whole. In addition, there is a
correlation between those estates with a relatively high proportion of long-term claimants
and those with high incidences of child poverty.
In light of its economic success and population growth, it is not clear why the poverty rate
has not reduced over the period under consideration. There are a number of possible
explanations:
 Local residents may not be able to access the economic opportunities that are being
created due to skills mismatch; limited access to transport; lack of information; or
other issues associated with disengagement from the labour market. Roughly two
thirds of the employment in Milton Keynes is in senior management, professional and
28
technical occupations, skilled trades and administration . However, this employment
pattern contrasts with the work history and types of jobs sought by claimants, who are
29
predominantly seeking work in sales, customer service and elementary occupations .
26
South East England Development Agency (2009) Milton Keynes Economy: The Impact of the Recession on
Milton Keynes
27
The Milton Keynes Children and Families Partnership (2012) Child Poverty in Milton Keynes: Analysis,
Experience and Action
28
Analysis of ONS data on occupational structure in Milton Keynes Economy and Learning Partnership (2010) A
draft strategy for adult skills in Milton Keynes to 2015; 2011 Census figures confirm these occupational trends
29
In March 2013, 30 per cent of jobseekers were seeking work in sales and customer service occupations, whilst
29 per cent were seeking work in elementary occupations. See Milton Keynes Council, Unemployment and Jobs
Update, Milton Keynes, March, 2013
Cities, growth and poverty: case studies
15
 Milton Keynes could attract people from other deprived areas, perhaps drawn to
30
economic opportunities or the relative affordability of housing in the area . As people
who have moved to the area obtain employment and begin to establish themselves
they may be replaced in official measures of unemployment and social exclusion by
the next set of people that migrate into the area.
 Disparity between the population of (skilled) workers that work in the Milton Keynes
area and drive the GVA per/worker measures of productivity, and the resident
population of Milton Keynes. Whilst the GVA measure considers the productivity of a
large population of relatively skilled workers, local claimant counts describe the
smaller resident population that is slightly more vulnerable to unemployment and low
pay.
 There may be a ‘core’ of poor people who are trapped in persistent poverty in
deprived wards and who have not been reached by national/local poverty initiatives.
However, there is limited evidence on the importance and relative contribution of these
factors.
Despite Milton Keynes’ economic achievements there remain pockets of deprivation across
the city. A number of estates, built in the early 1970s, continue to perform poorly on the
index of deprivation and it is estimated that one in five children in Milton Keynes is living in
poverty.
A relatively high proportion of residents in employment have tended to have low or no skills,
with the proportion of 16-24 year olds with low or no qualifications in 2004 significantly higher
31
than for other areas in the South East . Although performance has picked up on these
measures in recent years, the labour market remains polarised between high skilled and
32
high income jobs and elementary, low income occupations .
Housing policy has favoured a mix of tenures, housing types and occupational groups within
33
the city’s grid squares, with the aim of creating more integrated communities . A broadly
pro-development approach to planning has allowed housing supply to track demand to a
greater extent than in many other parts of the UK. However, one interviewee noted that
demand for social housing can no longer be adequately met, partly because fewer people
have been moving on from social housing or exercising their right to buy, and also because
30
The review of the architecture of Milton Keynes’ ‘Long Term Economic Vision’ (2008) suggests a link between
Milton Keynes’ poor performance on deprivation measures and the large volume of new social housing that had
been built in the area in previous years. See Cobbold, C. & Ching, C. (2008) Review of the Milton Keynes Long
Term Economic Vision: The Architecture of the Economic Vision, version 2.0, a DTZ report for MKELP
31
MKOB LSC, 2004, ‘Milton Keynes skills and economic assessment’, Milton Keynes, Oxfordshire and
Buckinghamshire Learning and Skills Council, Kidlington, Oxon, cited in A. Cochrane & D. Etherington (2007)
Managing local labour markets and making up new spaces of welfare, Environment and Planning A, 39: 29582974.
32
Cochrane, A. & Etherington, D. (2007) ibid
33
Department for Communities and Local Government (2006) Transferable Lessons from the New Towns
Cities, growth and poverty: case studies
16
housing associations have not been able to get loans to build new houses for social rent as
opposed to affordable housing rent levels. There is very little incentive for the council to build
expensive properties that will then be bought under the right to buy scheme. Consequently,
people assessed as a priority for social housing are waiting for longer periods and there has
been an increase in the number of homelessness applications.
There is also anecdotal evidence that the local housing market is being skewed by other
councils that have been re-housing people in Milton Keynes in order to meet their statutory
housing requirements. One interviewee highlighted concern that councils would re-locate
families with extensive and complex needs that would add to the social services case load.
Originally built for the car, those residents of Milton Keynes that have to rely on public
transport to get to work are likely to be at a disadvantage: the bus service is nominally
accessible, but low-density neighbourhoods and the layout of urban estates makes it difficult
to provide a frequent and reliable public transport network. In addition, residents also lack
real-time information about services. As a result, a low proportion of people journey to work
34
on public transport (9 per cent ).
Key features of poverty reduction strategies
A poverty alleviation strategy has been devised to address the issue of child poverty in
Milton Keynes. However, since the majority of poor children live in a household where no
adults work, the strategy also focusses on getting more people (parents) into work and
therefore aligns with the wider economic development strategy.
The strategy devised by the Child Poverty Commission (2011) proposes to tackle child
poverty through: skills development; improving access to childcare; and targeting support in
35
those areas where most poor families live .
Some groups have been campaigning for the living wage in Milton Keynes, but there is little
evidence of buy-in from key public sector employers such as the council. Indeed, from the
perspective of the council, advocating the living wage may be seen to conflict with their wider
role in promoting Milton Keynes as a commercially competitive business environment.
There are also a number of initiatives that are not directly concerned with poverty reduction,
but which seek to connect people with employment in the local area:
 The Neighbourhood Employment Programme (NEP) is delivered by the Regeneration
team and Adult Continuing Education in partnership with other key service providers,
such as Milton Keynes College. The programme built on the success of the Milton
34
Milton Keynes Council, Local Transport Plan 3: A Transport Vision and Strategy for Milton Keynes 2011 to
2031
35
The Milton Keynes Children and Families Partnership (2012) ibid
Cities, growth and poverty: case studies
17
Keynes Future Jobs Fund project; it was originally funded through the Recession
Programme and now attracts additional council funding. The NEP targets people in
receipt of means-tested benefits across twenty two regeneration areas in Milton
Keynes. Employability support is provided through local weekly jobs clubs where
individuals can meet with an employment adviser to create an Individual Learning
Plan. The NEP team also coordinates volunteering opportunities and work placements
with the council’s Inward Investment team and local employers. In addition, the
programme links up with wider support initiatives, such as the Troubled Families
initiative and a DWP/ESF contractor.
 Section 106 obligations have been used to boost the number of apprenticeships that
are on offer and to encourage businesses to offer employment opportunities to local
people.
4. Linking economic growth and poverty alleviation in Milton Keynes
Much of Milton Keynes’ development has been shaped by its strategic location and
designation as an area for growth. This case study has described the governance of this
development and also highlighted some of the local initiatives that have enabled Milton
Keynes’ economic success.
The pro-active approach to attracting inward investment and programmes aiming to connect
people with employment opportunities are important examples of how the council has sought
to facilitate local development and enable people to enjoy some of the benefits of economic
growth.
Certain challenges for the local area can only be addressed in the long-term, such as the low
skills profile of the resident population relative to the types of jobs that are on offer in Milton
Keynes and the skills profile of the South East.
Strategies to promote economic growth and those that aim to alleviate poverty share
common objectives: maintaining strong employment growth is seen as both a guarantee of a
successful local economy and a means of reducing poverty. Correspondingly, there is
recognition that ‘skills are needed not just to achieve a more competitive local economy or
36
just to address the social inclusion agenda – they are needed for both’ .
Similar principles also underpin the delivery of both the economic growth and poverty
strategies with the council working to offer a ‘holistic’ service to businesses and service
users alike. Current best practice is to promote communication and information sharing
between teams within the council: for example, there are established links between the
inward investment and regeneration teams.
36
Milton Keynes, Oxfordshire & Buckinghamshire Learning and Skills Council (2002) Skills Audit 2002, Red box
research
Cities, growth and poverty: case studies
18
Yet, despite high-level recognition of the links between growth and poverty, where the two
agendas do not complement each other there is less evidence of priority being given to
social justice considerations.
Some policy levers that could be appropriately coordinated at a city level, and particularly
those relating to reducing the cost of living for residents, have not been prioritised:
 Social housing: the right to buy initiative discourages councils from investing in
expensive social housing developments; meanwhile the building of social housing, as
opposed to affordable housing, has stalled somewhat;
 Initiatives to improve public transport: there is recognition of the need to make the
transport system ‘accessible to all’ but it is not clear how some of the structural
barriers to providing a more accessible public transport system, such as the city’s low
density neighbourhoods, can be addressed;
 The living wage in Milton Keynes: although there has been some campaign activity in
the city, there is little evidence of public sector buy-in. Indeed, the initiative may
appear to conflict with the ‘Milton Keynes offer’ of a competitive business environment.
Cities, growth and poverty: case studies
19
3. Oxford Case Study
Higher than average GVA growth, growth in poverty
1. Introduction
Oxford is a small but affluent city located near the centre of England. It is closely functionally
linked to London, with strong commuting flows to the capital. But it is geographically close to
Birmingham, Bristol and Swindon. It has strong links to the main M4 corridor and the area of
37
economic activity near Heathrow . Surrounding the city is a rural hinterland of villages,
which are linked into the city, and towns such as Bicester.
Oxford has a knowledge-intensive, highly skilled economy focused on the two Universities
and a number of large public sector employers. It has experienced considerable growth over
the past few decades. Yet there are a number of concerns about poverty: resident
educational attainment is low, in the state sector at least; there are significant concentrations
of poverty in outlying estates to the South and East of the City; and housing costs are very
high, with a lack of affordable housing for those on low wages.
2. Economic growth and development in Oxford
Historically, Oxford’s economy had two main drivers – Oxford University in the centre of the
city, and the Cowley car factory in the South East. Since opening in the early 1900s, the car
plant had become a major employer and the driving force behind the development of
Western Oxford. Other industries included publishing and the hospitals located in the city,
with the John Radcliffe, a major teaching hospital, linked to the University.
The importance of the car plant meant that Oxford was exposed to the decline of
manufacturing employment in the UK. In common with other car plants, the Cowley works
began to decline in employment terms in the early 1990s. However, the city saw relatively
rapid growth in a number of other areas at the same time with the University and a number
of other science-based industries taking off, along with increasing commuting to London.
This availability of work meant that the industrial transition in Oxford was easier than in other
cities, with new industries expanding to fill vacancies. Oxford did not suffer from the longterm legacy of unemployment.
37
MM Consulting (2012) Oxfordshire Economic Assessment: Analysis of data and evidence. Oxfordshire County
Council.
http://www.oxfordshire.gov.uk/cms/sites/default/files/folders/documents/business/economicdevelopment/Ox
fordshireEconomicAssessment28Jan2011.pdf
Cities, growth and poverty: case studies
20
Oxford’s economic success over the past thirty years has been underpinned by a number of
factors. Its population was relatively highly educated, with a large number of skilled workers.
Population growth has been biased towards those with high skill levels. As structural change
in the national economy has also favoured those with high skill levels, and the skill levels of
Oxford residents have simultaneously increased, this has been a key driver of growth.
The two Universities have also expanded. Oxford University has seen large increases in
student numbers, but Oxford Brookes University has also expanded in the East of the City
and is one of the leading ‘new Universities’. These universities have been important in the
growth of the skilled population, but have also anchored niche clusters in areas such as
38
biotechnology, space, cryogenics, and advanced engineering. Also important have been
key anchor institutions such as the teaching hospitals and the Harwell Science and
Innovation Campus. These have been important in the development of niche, scientific
sectors.
Oxford’s economy is relatively dependent on the public sector. According to the Oxford
39
Economic Profile around a third of jobs in Oxford are in health, social care, education and
local government – sectors traditionally dominated by the public sector. Alongside this, the
two universities account for a further 20 per cent of employment (although these are not
purely defined as public sector employment). This has led to concerns from the county
council that the public sector is driving much of the growth, and this means the city is
40
vulnerable to further public spending cuts .
However, there are concerns that this growth has happened to Oxford rather than the city
benefiting from an explicit economic development strategy. Local government is relatively
fragmented, with the City Council responsible for a tightly bound urban core, the location of
much of the poverty, but four district councils and a county council responsible for much of
the land available. The city has relatively little land for development given the historic city
centre, flood plains restricting development on many areas and a tight green belt. This has
made it hard to get new development land into use. A combination of resistance to
development and political fragmentation has meant a major housing development at
41
Grenoble Road, to the East of the City, has been stalled for some time .
3. Poverty alleviation in Oxford
At an aggregate level, Oxford has relatively little poverty. The strength of Oxford’s economy
has meant there are few demand side employment problems. However, in-work poverty due
to low pay is likely to be an issue and has been for some time. A study by SQW and
38
MM Consulting (2012) ibid.
Oxford City Council (2011) Oxford City Profile. Available from:
http://www.oxford.gov.uk/Direct/Oxfordeconomicprofilev3.pdf
40
MM Consulting (2012) ibid.
41
See Oxford Mail (2012) City offers to cut Grenoble Road homes bid.
http://www.oxfordmail.co.uk/news/9743227.City_offers_to_cut_Grenoble_Road_homes_bid/
39
Cities, growth and poverty: case studies
21
Cambridge Econometrics in 2004 highlighted a number of poverty-related problems: low
earnings growth, lack of affordable housing, and several areas of highly concentrated
42
deprivation . This problem may have worsened since the recession, with demand for low
43
skilled occupations falling both during the recession and since .
While unemployment is not a significant problem, there are a number of key concerns for the
city. First, there is concern about low skill levels and educational attainment amongst many
of Oxfordshire’s school pupils. Oxford scores poorly on many measures of educational
attainment, despite the high-profile University. One of the four goals of the Local Enterprise
Partnership’s strategy is to improve the skills of those in the labour market or those about to
enter it.
Second, there has been some emphasis placed on housing costs. This is seen as both a
barrier to growth and a problem for residents at risk of poverty.
“Oxfordshire is one of the most expensive places to live in the country. Coupled
with the continued low level of house building in the county access to affordable
housing is an ever increasing problem”
In the City Council’s regeneration framework
44
45
they argue this is both a social problem (a
‘barrier to social progress’) and a barrier to growth, with a lack of affordable housing in the
centre leading to recruitment difficulties, high levels of commuting and, subsequently,
congestion in the city. It is reflected also in overcrowded housing. Estimates from 2010 were
that there were 4,600 households on the City Council’s waiting lists for new housing, 450 in
46
temporary accommodation and over 6,000 over-crowded households .
The division between the different local government structures has been seen as hindering
the link between growth and poverty. Most of the deprived areas fall within the boundary of
the City council. However, most potential employment growth areas are in the outlying areas
of the city, leading to concerns about a divergence between economic growth and poverty.
4. Linking economic growth and poverty alleviation in Oxford
While there was a general concern about poverty in the city, this was reflected in a very
demand side view of how it could be addressed – rather than thinking about job creation
explicitly for groups at risk of poverty, local stakeholders were more concerned about the
general economic health of the city with the assumption this would trickle down.
42
SQW / Cambridge Econometrics (2004) Economic Study of Oxford. A report for Oxford City Council
OCYPT (2012) Oxfordshire children’s and young people’s trust (2012) Child Poverty Needs Assessment.
44
M Consulting (2012) ibid.
45
Oxford City Council (2009) A regeneration framework for Oxford to 2026.
46
Oxford City Council 2011. Housing strategy – consultation. Available from: consultation.oxford.gov.uk/gf2...//78421OCChousingstratOP3web.pdf
43
Cities, growth and poverty: case studies
22
But one concern is that Oxford’s economic success – often based on international staff or
those from outside the region – was not always benefiting long-term residents of the city.
While this was clearest in the high-technology sectors around the University, it extended to
other sectors of the economy. Institutions such as the BMW factory – which may have once
been an employer of large numbers of relatively poorly qualified local residents – attract
skilled staff from across the region rather than just locally.
This led to a focus on skills shortages and the argument that it was important to better link
‘knowledge economy’ jobs with the local skills supply. For example, there is a shortage of
technicians in the city – but this, and other jobs in the supply chain of much of the knowledge
economy of the city – was not always the subject of local training efforts. One interviewee
argued that we needed a “story about the knowledge economy which includes everyone –
not just if you’re the next Stephen Hawking”.
There have been a number of attempts to improve skills amongst local residents. In one
example, major employers have pledged to increase the number of apprenticeships taken in
the city. Nineteen employers, including Oxfordshire County Council and BMW, have taken
on apprentices in a number of areas.
In summary, Oxford has experienced relatively rapid growth underpinned by public sector
assets but with considerable private sector activity developing alongside it. Because of its
strong economy, there are significant employment opportunities for residents. Yet poor
educational attainment and skills amongst many residents mean they are unable to benefit
from growth, with housing costs a significant problem.
Cities, growth and poverty: case studies
23
4. Glasgow Case Study
Higher than average GVA growth, declining poverty
1. Introduction
Glasgow is a major city in the UK. It is the largest city in Scotland. It lies at the western end
of the central belt – the urban area stretching from Edinburgh in the east along the M8
motorway to Glasgow in the west.
The population of Glasgow City local authority is just under 600,000, which makes Glasgow
the largest city by population in Scotland. The population of the Glasgow travel to work area
is approximately 960,000. When the entire population of the Glasgow City Region is
counted, it totals approximately 1.7 million. This illustrates the relative size of the region,
given the total population of Scotland is 5.25 million.
For the purposes of empirical analysis, Glasgow is defined as the Glasgow travel to work
area. This comprises the local authorities of Glasgow City, East Dunbartonshire,
Renfrewshire and East Renfrewshire.
Of all the cities included in the analysis, Glasgow is the one which, over the period
considered, showed the largest reduction in poverty levels, with a percentage point reduction
of over 3 per cent.
The Centre for Cities’ Cities Outlook (2013) notes that Glasgow is the city with the highest
level of inequality as given by the difference between the highest and lowest JSA claimant
rates at Lower Layer Super Output Area. What this points to is the fact that in Glasgow there
are some areas with incredibly high unemployment, and therefore even higher levels of
worklessness. Centre for Cities note that this is consistent with the finding that larger cities
tend to be more unequal cities.
The report also places Glasgow in eighth place in cities which have the highest percentage
47
of high level qualifications . Again this points to the idea that some areas and some
individuals are doing well, but there is substantial variation.
Key features of the economy
47
As measured by percentage of working age population with NVQ4 and above, 2011.
Cities, growth and poverty: case studies
24
48
The employment rate in Glasgow at June 2012 was 66 per cent , which is lower than
Edinburgh and London, and lower than the UK average of 70 per cent. Glasgow has higher
levels of economic inactivity than for both Scotland and for the UK. While it is correct to note
that Glasgow has a higher percentage of students (31 per cent) compared with 23 per cent
for Scotland and 25 per cent for GB, it should also be noted that Glasgow has higher levels
of long-term sick (32 per cent) compared with 29 per cent for Scotland and 22 per cent for
Great Britain. The issue of long-term sickness and / or incapacity is a policy area which
merits further discussion below, both in terms of these issues being a consequence of
economic failure, but also in terms of being a potential brake on future economic
development.
Drivers of growth
Glasgow, in common with many other British cities, saw rapid population increase through
th
the 19 century. Traditionally Glasgow has been strong in heavy industry and was
particularly associated with shipbuilding. Even though the period of rapid expansion
generated great prosperity for the city, it also generated poor social conditions within the city,
for which Glasgow became notorious.
The city’s fortunes became inextricably linked with the fortunes of these heavy industries.
Deindustrialisation was a major problem for Glasgow and in the 1980s and 1990s the effect
of the contraction of these industries was a huge rise in (particularly male) unemployment.
One interviewee noted that it is “difficult to overstate the impact of that change on the city
and the conditions we now find ourselves in”.
Urban policies pursued in the post war years had a long lasting effect on the city’s
geography of deprivation and exclusion. There were attempts to move people out of the city
centre and to rehouse them into either New Towns or large housing estates on the periphery
of the city. The new towns of Cumbernauld and East Kilbride were able to attract investment
whereas the prospects of those in the peripheral housing estates were less bright. Some of
these estates suffered from being geographically separate from employment opportunities.
2. Economic Growth and Development in Glasgow
Glasgow Economic Forum produced a ten year strategic plan ‘A step change for Glasgow’
48
These statistics are taken from the Glasgow City Labour Market Profile available via Nomis at
https://www.nomisweb.co.uk/reports/lmp/la/2038432136/report.aspx#tabempunemp
49
Glasgow Economic Forum (2006) A step change for Glasgow: Glasgow’s ten-year economic development
strategy, Glasgow, Glasgow Economic Forum
Cities, growth and poverty: case studies
25
49
which intended to mark a step change in Glasgow’s economy. This document noted three
key priorities:
 Move up the ‘value chain’ - because successful cities need to become more
specialised, innovative and productive;
 Shared prosperity - because growth should benefit all Glasgow’s citizens;
 Excellent economic environment - modern cities’ economic success relies on aligning
the business, physical (including infrastructural), cultural and social environment so
that innovation and growth can be supported better.
Glasgow Economic Forum note that the economy is predominantly service based with fewer
than one in ten jobs in manufacturing or utilities despite the continued involvement of
important global firms in these sectors. In common with comparable cities (i.e. those
experiencing issues relating to deindustrialisation) most new job opportunities have been
created in business services, public administration, health and retail.
The Glasgow Economic Commission was established in 2010 by the Glasgow Economic
Partnership to review the city’s “step change” strategy and action plan. This was in response
to the changed economic conditions at the global level. The purpose of the commission was
to review the condition and future prospects for Glasgow City and city region economy, in
light of the changed economic circumstances, and consider the implications for the step
change strategy and action plan. The second part of the remit of the Commission was to
make recommendations for how to deliver the new strategy in the context of limited
resources.
In 2011 Glasgow Economic Commission produced a number of key recommendations for
50
how economic development should be taken forward :

A new private-public leadership body to focus the development efforts of the various
partners. Private sector engagement at senior level to develop sector action plans
for each of the key growth sectors identified (low carbon industries; engineering,
design & manufacturing; life sciences; financial & business services; and tourism &
events)

Private sector development to be encouraged especially around the three key
strategic investment areas of Glasgow city centre, Clyde Waterfront and Clyde
Gateway
As a result of the report’s recommendations, Glasgow Economic Leadership was
established in 2011 to provide independent leadership and direction to economic
development activity and take forward the issue of economic development in Glasgow. One
interviewee thought that these developments represented a much more coherent pro-growth
agenda and that the challenge for the providers of the supply side programmes was to align
50
Glasgow Economic Commission (2011) Final Report, Glasgow, Glasgow Economic Commission
Cities, growth and poverty: case studies
26
their activities to the strategy so that individuals are prepared with the skills required by the
key growth sectors.
Glasgow City Council is a key player in regard to economic development, with the
Development and Regeneration Services department responsible for many of the economic
and social activities delivered by the council.
Local initiatives promoting economic growth
It is undoubtedly the case that Glasgow has undergone much physical regeneration in recent
times. Impetus for physical regeneration came from different sources, but one important
boost to this agenda was provided in 2003, when the Scottish Executive published the Cities
Review documents. These documents set out the framework for the allocation of the Cities
Growth Fund, which was a ring fenced source of funding primarily aimed at promoting
physical regeneration of Scottish Cities. Glasgow’s plans were developed at the level of the
city region.
Glasgow was one of the 15 areas selected to take part in the Department of Work and
Pensions’ City Strategy initiative. The strategy was taken forward by the ‘Glasgow Works’
partnership through the development of a business plan (Glasgow Works, 2007). The
partnership comprised representatives from a range of stakeholder groups including the
council, the health service, Jobcentre Plus and the private sector. One of the aims of the
initiative was to support those furthest from the labour market back to work. It was noted that
Glasgow had a particular problem with worklessness and within the workless population
there was a high proportion who were not considering work. The task therefore was to
engage these individuals in training and preparation for a return to work. Another aim of the
initiative was to simplify and rationalise the welfare to work landscape in the area. In
common with other areas which undertook this initiative, the targets for reductions in benefit
levels were blown off course by the major turnaround in the world economy. There are
examples of good practice and individual case studies in the Glasgow case which show
success in moving people into the labour market, but at an aggregate level there is little
evidence for much effect in terms of job outcomes or of narrowing the gap between the worst
performing neighbourhoods and the rest. There is however evidence of both higher levels of
engagement and of some rationalisation of the welfare to work landscape in Glasgow.
Priorities for economic development
The Scottish Government note that regeneration requires different approaches to address
51
physical, social and economic issues . It is highly sceptical about the employment
opportunities generated through a ‘trickle down’ effect and suggests that tailored support and
skills development offer the most realistic means of tackling worklessness.
51
Scottish Government (2011) Building a Sustainable Future: Regeneration Discussion Paper
Cities, growth and poverty: case studies
27
One of the interviewees made much the same point stating that it was not enough to invest
in the high end type jobs and hope for trickle down to those who would be unlikely to get
those jobs. However, this does not mean that the high level jobs should be ignored.
Prosperity is generally beneficial, whether it provides high, intermediate or lower level
employment.
The issue of different levels of jobs has been analysed by Warhurst
52
who argues that the
polarisation in job quality is partly a result of economic priorities which have been pursued
which advocate the creative clusters on the one hand, and retail employment on the other.
The argument is made that job quality is one of the issues which needs to be thought about
more carefully rather than simply the numbers of jobs. Some of the issues relating to job
quality and reward are touched upon through the new anti-poverty strategy which will focus
on poverty both in and out of work.
The 2006 ten year economic development strategy notes that the City should aim to ‘move
53
up the value chain’ but also that ‘shared prosperity’ is one of the goals . These general
issues of high and low value work and the compatibility between growth and poverty or
inequality have been discussed elsewhere in relation to Scotland more widely
55
Glasgow more specifically .
54
and
Sector focus
The sector focus comes through much more strongly with the publication of the Glasgow
56
Economic Commission report . Key sectors have been identified and action plans drawn up.
57
This moves away from some of the emphasis of previous economic strategies , which
identified the public sector as having a key role in shaping economic growth.
Area focus
The issue of polarised JSA claimant counts (see above) points to the fact that some areas in
Glasgow suffer particularly high levels of deprivation.
Local economic development has been a priority in Glasgow since the mid-1980s. Glasgow
52
Warhurst, C. (2011) Rethinking good and bad jobs in Glasgow, A whose economy seminar paper
Glasgow Economic Forum (2006)
54
Mooney G & Wright S (2009) Wealthier and Fairer? Reflecting on SNP Proposals for Tackling Poverty,
Inequality and Deprivation in Scotland, Scottish Affairs (67), pp. 49-56.
55
Turok and Bailey (2004) Twin track cities? Competitiveness and cohesion in Glasgow and Edinburgh, Progress
in Planning, 62, pp135-204
56
Glasgow Economic Commission (2011) Final Report, Glasgow, Glasgow Economic Commission
57
Glasgow Development Agency (1999) Glasgow’s Renewed Prosperity – A joint economic strategy for Glasgow,
Glasgow. Glasgow Development Agency
Glasgow Economic Forum (2003) Glasgow’s Continuing Prosperity – A joint economic strategy for Glasgow 2003
– 2005, Glasgow, Glasgow Economic Forum
53
Cities, growth and poverty: case studies
28
City council work to the core aims of improving the physical environment of the city,
minimising population loss from the city and increasing economic investment and the
numbers of jobs. Over the years various Local Development Companies (LDCs) were
formed across the city to deliver substantial economic development programmes on behalf
of the council and Scottish Enterprise Glasgow within some of the most deprived areas of
the city.
The council is one of the key actors in delivering local economic development. Two particular
tools which may be used to help development are:
 Use of the development management function to determine and enforce development
decisions in support of City Plan 2 aims and to deliver developer contributions where
required;
 Giving consideration, where appropriate, to the use of Compulsory Purchase Powers
58
to facilitate development”
Glasgow enjoys a unique position as Scotland’s largest city and because of that privileged
position is able to exert greater influence than other urban areas with the Scottish
Government.
Funding pots
Since the financial crisis, funding has become more difficult to obtain so that public sector
funding and capital grant models along with debt financing are no longer seen as viable
options and therefore new financial models are required (Scottish Government, 2011). This
is undoubtedly true across the piece. Glasgow’s response has been to encourage the private
sector to play a more prominent role in infrastructure investment. This is especially the case
in the three key strategic investment areas (Glasgow Economic Commission 2011). The
options under consideration for funding infrastructure investment are large and small scale.
Under the former, enterprise zones, accelerated development zones and simplified planning
zones are marked out as being worth further consideration. At the smaller scale, options are
tax increment funding, business improvement districts, local asset backed vehicles, the
derelict land fund and the city growth fund.
3. Poverty Alleviation in Glasgow
In common with approaches in other cities, policy makers in Glasgow have tended to adopt
strategies which look at different ways in which poverty can be reduced, with the
understanding that the most effective method by which this can be achieved is through
participation in the labour market.
However, it must also be noted that this approach is dependent on economic circumstance.
58
http://www.glasgow.gov.uk/index.aspx?articleid=6005
Cities, growth and poverty: case studies
29
A point which was made by more than one interviewee was that one of the responses to the
rapid deindustrialisation and economic problems of the 1980s and 1990s was to pursue a
policy of income maximisation for citizens, through moving people from active job seeking
benefits onto passive health related out of work benefits. This policy is no longer one which
is practical, nor desirable. More recent policies have focussed on attempting to connect
these groups with the labour market.
Key features of poverty reduction strategies
Poverty has historically been a major issue within the city and throughout the 1980s and
1990s policies were developed to tackle the problem. An interviewee made the point that the
discussions which occurred in the 1980s and 1990s have long-informed the city’s approach,
so understanding of the current approaches requires some understanding of the types of
debates and arguments which were being made during that time.
An interview picked up on the point of incentives and noted that anti-poverty strategies need
to be more and to do more than simply incentivise work. For this interviewee it was not just a
simple case of jobs pay and benefit does not and therefore any solution is primarily
dependent on striking the right balance between the rewards on offer. It is more important to
recognise that people who suffer from poverty are affected by a whole range of issues which
sometimes require long-term and intensive support.
Glasgow Council has recently launched a new anti-poverty strategy which brings together a
range of organisations, as well as individuals who have been affected by poverty to work in
59
partnership with the aim of “making poverty a thing of the past” . The strategy will focus on
six main themes – attitudes to poverty, child poverty, credit and debt, welfare reform, work
and worth, and involvement of people with direct experience. The aim is to set goals under
each of these themes and policies will be developed to achieve these goals. For the local
elections in May 2012 the leader’s office in the council drafted a manifesto which contained
100 pledges. The commitment to tackling poverty was one of those and forms part of the
60
City’s strategic plan . It was recognised that the city did not have a poverty action plan and
this was something which needed to be rectified.
The panel is to be chaired by the leader of Glasgow City Council and co-chaired by a
community activist from Govanhill indicating the importance which the panel places on
hearing the voices of those directly affected by the issue of poverty. It is thought to be
important to include the users of the services in the decision making structures, so that the
service is one which works with people rather than is something which does things to or for
them. The strategy is very much in the early stages of development. At the moment there is
no budget associated with the work, though this will come in time. The current priorities
revolve around achieving buy-in and support. Although there will be a budget, it would be
59
60
Press release on the Glasgow City Council website http://www.glasgow.gov.uk/index.aspx?articleid=9971
Glasgow City Council (2012) Strategic Plan 2012 to 2017, Glasgow, Glasgow City Council
Cities, growth and poverty: case studies
30
naïve to expect a large amount of resource to be devoted by Glasgow City Council to this
work. The council will lead on this strategy, but will not be the sole driver and will work in
partnership with a range of other service providers and organisations in order to move this
forward. The key therefore will be making use of partners’ resources and expertise. This is
partly a response to the changed economic circumstances and also the need to achieve
more with the same resources. The solution may not be more resource, but allocating the
resource along different lines.
Using partners’ expertise is an approach which can lead to efficiencies. For example the
NHS has expanded the role of the community midwifery service to include passing on advice
and guidance relating to benefit rights for mothers. This is an effective way of delivering a
useful, practically helpful service at low cost.
Glasgow City Council also promotes a living wage campaign. The campaign launched in
March 2009 with and set a minimum level of pay for Council workers at £7.20 per hour. The
campaign does not only apply to council employees, the aim is to encourage other
employers across the city to raise wage rates and to sign up to the campaign. The campaign
attempts to “sell” the concept to employers noting the good publicity that the commitment to
building a better Glasgow generates, as well as the benefits in terms of recruitment,
retention, productivity, motivation and loyalty which being a living wage employer can bring.
The campaign is keen to base the claims which it makes on sound empirical evidence and
uses the Joseph Rowntree Foundation methodology to calculate and update the rates. Over
150 employers city-wide have signed up to the campaign, covering a range of public and
private sector employers, and according to the campaign its introduction in 2009 “increased
61
the salary of almost 700 employees of Glasgow City Council and its partners” .
The council is able to use its position as a procurer of employment to exert influence on its
contractors to pay the living wage. The council is keen to maximise the impact of the
campaign and “will work within the current legislative framework to encourage contractors to
pay the Living Wage. It is important that companies who benefit from public money can
demonstrate that they are putting something back into their communities and we intend to
62
use our procurement to raise standards of pay across the city” . There are however limits to
this approach and the language used by the council on this point is instructive. In truth it is a
weak mechanism as the council has been unable to state definitively whether paying a living
wage can be taken as a consideration in the procurement process. The issue has been
complicated by the problem that it is not clear as to under whose jurisdiction a ruling on this
could be made.
The limits of the living wage approach are also shown by the limits to which the economic
arguments about benefits to business appear to be being heard by the wider business
61
Taken from the Glasgow Living Wage Campaign Website
http://www.glasgowlivingwage.co.uk/index.aspx?articleid=1760
62
Glasgow Living Wage Campaign, ibid.
Cities, growth and poverty: case studies
31
community. There is little robust evidence to support this view, rather it is informed by local
intelligence. There is a feeling that it is difficult to make the case for the living wage beyond
the employers who probably would have paid anyway, and without any regulatory power it is
difficult to see how the living wage can make further gains.
4. Linking Growth and Poverty Alleviation in Glasgow
As noted above there are approaches to boost economic growth and create jobs which
operate within Glasgow and there are also policies which seek to maximise income for
citizens, though the focus of these has shifted over the years in response to various issues –
namely labour market conditions and “big P” politics.
One interviewee noted that the approach shifted from policies of income maximisation
through the benefits system to one which attempted to link people to new job opportunities.
This is exemplified through some of the regeneration activity which sought to provide a more
holistic approach to regeneration through linking physical, social and economic elements.
Community benefit clauses have also been utilised to good effect to link people to new
openings and this is the case with the work which is being done for the upcoming 2014
Commonwealth Games. These clauses have been used to guarantee apprenticeship
opportunities and job opportunities to local residents who are from deprived parts of the East
End. The clauses are contractually binding so that employers have to demonstrate that they
have offered such placements. Internal evaluation of these clauses on the Commonwealth
Games contracts has taken place within Glasgow City Council and the policy is regarded as
incredibly successful. Post codes from those gaining apprenticeships or jobs have been
collected and mapped which shows the grouping from the most deprived areas in Glasgow’s
East End. The policy has been successful because alongside the contracts, the Council and
partners who have let the contracts have worked with the contractors to ensure success.
Contractors were put in contact with local agencies who were then able to help them liaise
with likely candidates. In other words, the support was there to enable contractors to be able
to meet the aims, rather than it just being a contractual requirement.
One aspect of policy which has been very much to the fore in the Glasgow context is the
issue of linking policies to tackle poverty through getting people into work with policies which
look at issues of ill-health and limiting health conditions.
This suggests that successful anti-poverty strategies cannot be concerned solely with issues
of increasing or promoting economic growth. Rather the policies have focused more widely
on wider concepts of employability encompassing issues such as health and housing in
addition to the more usual human capital type approaches.
Glasgow has pursued an agenda which aims to secure economic growth and has developed
a strategy which identifies high value sectors which are ones which will drive up GVA.
The developments associated with the upcoming Commonwealth Games have allowed
Cities, growth and poverty: case studies
32
community benefit clauses to be operated with some success so that jobs and
apprenticeships have been linked to people from the more deprived areas of the east end.
Glasgow is clearly fortunate in the sense of having this opportunity, but the approaches
adopted illustrate that Glasgow has taken steps to think more strategically about how the
benefits of the games can be shared.
Glasgow has additionally given some attention to the issues of in-work poverty and job
quality through its living wage campaign and this has had some success. However, the
campaign also illustrates some of the limitations of the approach; the voluntary nature of the
scheme means that it cannot be extended to sectors where pay is at the minimum rate.
Cities, growth and poverty: case studies
33
5. London Case Study
Higher than average GVA growth, declining poverty
1. Introduction
London is a unique city. As the capital city of the UK, it is the home of many national
institutions and government departments. Most domestic transport networks and many
international ones focus on London, and people commute into the city from across the South
East. It is also an example of devolution, with a Mayoral model introduced in the late 1990s
leading to more powers than in any other city in the UK.
London’s economy has been highly successful. In the early 1980s, London was thought to
be in decline. But since then, the economy has been turned around – driven by a skilled
population, the diverse migrant population and strengths in growth sectors such as financial
and business services. Output growth in London has exceeded that of the rest of the UK
63
since the late 1990s and the economy was relatively resilient in the recession.
Yet despite this economic dynamism, London has one of the highest rates of poverty of any
UK city. Economic growth led to increased inequality, with significant gains at the top of the
wage distribution. Those in, or at risk of, poverty benefited less. An extremely high cost of
living – in particular housing costs, but also childcare and transport – represent significant
drags on the real incomes of workers. While the poverty rate has remained largely static
over the last decade, the geography of poverty has changed. As the central areas of London
gentrified over the 2000s, poverty became an increasing problem in outer London.
2. Economic growth and development in London
London has not always been seen as a successful economy. In the 1970s, the economy
began to lag behind other parts of the country. The city’s economic resurgence began in the
1980s. The population began to increase from about 1981, with both inner and outer London
64
growing steadily since.
The economy has subsequently outperformed that of the UK, and London’s lead has been
growing in terms of GVA. In 1997, London’s economy was 154 per cent of the UK average;
by 2010 it was 165 per cent.
65
London accounted for around 37 per cent of total nominal
63
Lupton et al. (2013) Prosperity, poverty and inequality in London 2000/01 – 2010/11.
MacInnes, T. Parekh, A. and Kenway, P. 2012. London’s poverty profile 2011. London, New Policy Institute.
65
Office of National Statistics, Sub-regional GVA Estimates
64
Cities, growth and poverty: case studies
34
GVA growth that occurred across the 60 cities over the period 2001-2008.
There is no consensus on the reasons behind the resurgence of London, but there are likely
to have been a number of causes. The first is the skills of the population. The city has
experienced a long-term increase in the share of the population qualified to degree level: in
2010, 42 per cent of working age Londoners had a degree, compared to 32 per cent in the
66
UK.
Related to this, London has an extremely diverse population and is home to a uniquely large
number of international migrants, who bring skills, start new firms and create innovation in
the capital. The 2011 Census showed that 37 per cent of residents in London were born
67
outside of the UK. This is the highest share of any city in the UK.
The strength of many of London’s core industries has also been important. Following the
“big-bang” in the mid-1980s employment in the financial services sector increased
significantly, with many foreign-owned banks siting their European headquarters in the city.
London now has roughly double the share of employment in financial services than the rest
of the UK, and the sector in London is around 55 per cent more productive than elsewhere.
68
However, financial services are only one of many significant industries in the capital.
Business services – a term which includes a variety of different industries – is also a
strength, and London has significant employment in this sector which includes IT services,
69
consulting, advertising, law and accountancy. While this sector is related to financial
services, it has become a significant driver of the economy in its own right.
Between them, the financial and business services sector experienced strong output growth
in the period before the financial crisis – around 6 per cent a year from 1998 – 2008, faster
70
than most other economies. The financial and business services accounted for around 35
71
per cent of employment in London in 2010. Other strengths of London’s economy include
Tourism, the Creative Industries and the capital’s Higher Education Sector.
London is often where firms locate their most knowledge based functions, such as design
and other creative occupations. Estimates suggest, for example, that in 2010 there were
386,000 workers in the creative industries. However, 411,000 people worked in creative
occupations – such as Design or Publishing – in other sectors of the economy.
72
The
66
Greater London Authority (2012) Skills: A degree of qualification. London, Greater London Authority.
Office of National Statistics (2012) International migrants in England and Wales, 2011.
http://www.ons.gov.uk/ons/rel/census/2011-census/key-statistics-for-local-authorities-in-england-andwales/rpt-international-migrants.html
68
Ian Gordon et al. 2011. London’s place in the UK economy, 2008/9. London, City of London Corporation.
69
Gordon et al., ibid.
70
Oxford Economics. 2011. London’s Competitive Place in the UK and Global Economies. London, City of London
Corporation.
71
Oxford Economics, ibid.
72
Freeman, A. (2010) London’s Creative Workforce: 2009 Update. GLA Economics Working Paper, London:
67
Cities, growth and poverty: case studies
35
expense of locating in London means that firms are more likely to locate their skilled,
knowledge intensive functions in the capital. This provides an incentive for highly skilled
workers to live in the city.
London has a unique local government structure. Basic services, such as social services,
roads and waste collection, are run by the 33 boroughs (including the City of London). The
Greater London Authority, led by the mayor, is responsible for strategic services across the
capital, such as transport, policing and some economic development functions.
3. Poverty alleviation in London
Despite its economic success, London has extremely high levels of poverty. It has the
highest rate of child poverty and more children living in workless households than any other
region of the UK. Changes in poverty have varied across different groups, between 2000/1
to 2010/11 there were falls in child poverty but working age poverty rose.
73
Deprived boroughs such as Tower Hamlets, Hackney, Newham and Islington are – despite
their proximity to the financial heart of the city – four of the ten most deprived local authority
areas (or, in this case, Boroughs) in the country.
However, the geography of poverty in London has changed. Economic growth has been
accompanied by gentrification in inner London, with more affluent residents moving in as the
74
composition of the population changes. This has led to a suburbanisation of poverty in the
capital, with outer boroughs seeing increases in their poor population. Right to buy meant
that much of the social housing in the centre was bought up. Private rented housing outside
of the centre was cheaper and those at risk of poverty moved out.
There have also been changes in poverty in London since the recession, in which London
75
was more resilient than other parts of the country. Employment rates for Black / Black
British people where worse affected outside of London, and so rates converged. Similarly,
while youth unemployment rose in the recession it did not increase by as much as other
places.
London does retain significant barriers to employment for certain groups which are different
to those found elsewhere. Traditionally transport has been seen as an issue for some
groups, with relatively high costs reducing the wage gains from working. However, London
does at least have relatively accessible transport. Similar barriers to employment include
childcare and housing – the costs of both can be significant disincentives to work.
Greater London Authority.
73
New Policy Institute (2012) London’s poverty profile 2011. New Policy Institute, London.
74
Fenton, A. (2012) Falling poverty rates in inner London raise questions about inequality and segregation for a
growing city in transition. British Politics and Policy at LSE (18 Apr 2012) Blog Entry.
75
Lupton et al. (2013) Prosperity, poverty and inequality in London 2000/01 – 2010/11.
Cities, growth and poverty: case studies
36
4. Linking economic growth and poverty alleviation
London has experienced strong economic growth, but there are concerns that there remains
a core of residents who lack the required skills – in particular soft-skills and employability
skills – which will allow them to take available employment in the capital.
The GLA operates policies in a number of areas to address poverty. These include having
been behind a significant increase in the number of apprentices, championing the London
living wage and a policy of ensuring that contracts for major projects (such as Crossrail)
include commitments to employ the resident population and supply apprenticeships.
Similarly, major efforts have been made to regenerate East London – particularly through the
Olympics, although whether the long-term legacy will benefit disadvantaged groups has
been questioned.
76
There have been concerted efforts to improve conditions for many of those in London.
Alongside this, driven by the London Challenge programme there has been a dramatic
improvement in the qualification-levels of those coming out of London’s schools. In
1999/2000 only 45 per cent of school pupils in London obtained five GCSE A*-C grades
compared to 81 per cent in 2010/11. London now has a lower share of residents without
qualifications than the UK as a whole.
77
In the long-term, it is the increased educational
attainment of residents which is likely to have the largest impact on poverty reduction.
76
Anne Power (2012) The Olympic investment in East London has barely scratched the surface of the area’s
needs. Available from: http://blogs.lse.ac.uk/politicsandpolicy/archives/26022
77
Greater London Authority, ibid.
Cities, growth and poverty: case studies
37
6. Swansea Case Study
Lower than average GVA growth, declining poverty
1. Introduction
During the eighteenth and nineteenth centuries, Swansea’s strategic coastal location and
78
proximity to a variety of natural resources made it a thriving industrial centre . The decline
of heavy industry brought a long period of economic decline and necessitated diversification
into the manufacturing and service sectors. Though it is connected to Cardiff and other key
conurbations by a mainline railway and the M4 motorway, the city is now a largely peripheral
79
economy within the UK with significant implications for its economic success .
The main sources of employment in Swansea now lie in the public and service sectors,
including government offices (the DVLA, and the Department for Work and Pensions),
educational institutions (such as Swansea University), and insurance and banking services.
In contrast, in the neighbouring area of Neath Port Talbot the economy is much more
dependent on mining, quarrying and utilities, and the manufacturing sectors, which account
for 24 per cent of employment. This is largely explained by the continued presence of large
industrial employers, particularly TaTa Steel.
Swansea is the second largest city in Wales both in terms of area and population. More than
239,000 people live in the City and County of Swansea unitary authority area and the
80
population has been growing steadily since 2001 . Meanwhile, the number of single-person
households in Swansea is estimated to have increased by more than 40 per cent between
81
1991 and 2010 , accounting for about a third of all households in the area.
82
Swansea is also the main driver of economic growth in the south-west region of Wales ,
which includes a number of smaller urban settlements. For the purposes of this analysis,
Swansea’s economic performance and poverty rate has been calculated by combining data
for the local authorities of Swansea and Neath Port Talbot, as a proxy for the travel-to-work
78
Key economic activities included various sorts of metalwork (including lead, copper, iron, steel and zinc) as
well as coal mining, and tinplate manufacture.
79
For a discussion of productivity gap see Boddy, M., Plumridge, A. and Webber, D. (2010) Productivity in
Wales: analysis of the impacts of peripherality on spatial patterns of productivity, Final Report to the Economic
Research Advisory Panel, Welsh Assembly Government
80
City & County of Swansea, Profile: April 2013; and 2010 Mid-year estimates of population, Research and
Information Unit, Briefing Note
81
Outlined in Peter Brett Associates LLP for Neath Port Talbot Borough Council and City & County of Swansea
Council (2012) Final Report: Economic Assessment & Employment Land Provision for Swansea and Neath Port
Talbot.
82
See the Update to The Wales Spatial Plan: People, Places Futures (2008)
Cities, growth and poverty: case studies
38
83
area . Though strongly linked to Swansea, Neath Port Talbot also has to contend with the
economic challenges associated with population decline, as well as dependence on
industrial sectors that are forecast to continue to decline.
Drivers of growth
Some of the productivity gap in Swansea has been attributed to the ratio of full- to part- time
84
employment, with just under a third of the working age population in part-time employment .
In addition, factors such as the industrial structure, the available capital stock, local skills
levels and population density are likely to have impacted on levels of productivity in the city.
Some of these productivity challenges are more amenable to intervention than others, and
some are unlikely to change significantly in the short-term.
Despite successfully boosting employment provision in the region, the approach to attracting
inward investment in Wales has been criticised for failing to sufficiently differentiate between
sectors and types of businesses, and the kinds of employment being created. The result, on
some counts, is a “branch plant” economy where
“inward investment became synonymous with external ownership, low skilled
employment, standard end of life cycle products, mature technologies and
85
restricted management opportunities” .
Due to these low productivity levels, the Swansea Bay and Western Valleys region has
qualified for European Structural Funding since 2002. However, it is not clear how
successful these initiatives have been and GVA remains below 75 per cent of the EU
86
average .
Regeneration and development projects have sought to enhance former industrial sites,
such as the Enterprise Zone in the Lower Swansea Valley, and stimulate new leisure and
service economies. They include the SA1 project, which developed the waterfront in
Swansea, the Liberty Stadium and Morfa redevelopment and, most recently, the
development of a new second campus for Swansea University.
Key features of the economy
The struggle to attract high value added businesses is perhaps symptomatic of a number of
83
Welsh Government, Statistics on Commuting in Wales (2012) SB 124/2012
Boddy, M., Plumridge, A. and Webber, D. (2010) Productivity in Wales: analysis of the impacts of peripherality
on spatial patterns of productivity, Final Report to the Economic Research Advisory Panel, Welsh Assembly
Government.
85
Written evidence on Inward Investment in Wales submitted to the Welsh Affairs committee by Dr John Ball,
Swansea University, March 2011,
http://www.publications.parliament.uk/pa/cm201012/cmselect/cmwelaf/writev/inwardin/iiw11.htm
86
Robinson, C., Carey, J. & Blackaby, D. (2012) Firm performance in Wales – An analysis of productivity using
company accounts, Working Paper Series 007
84
Cities, growth and poverty: case studies
39
the challenges facing Swansea:
 Reliance on public sector employment: this means that Swansea is particularly
vulnerable to public sector cuts and it is not clear how these jobs would be replaced.
 Economic inactivity rates in the area are high: in addition to having a large student
population, Swansea has a higher proportion of people claiming long-term sickness
benefits than for Wales or the UK as a whole. This represents more than 9 per cent of
87
the working age population, and over 2.8 times the number of JSA claimants . There
are also stark health inequalities between more and less deprived communities.
 Ageing and migration: there is net migration of young people in their 20s who leave to
seek education and employment opportunities elsewhere, reducing the size of the
workforce and leaving an ageing population with attendant implications for health and
social service provision.
 Welfare reforms: given the high proportion of the Welsh population claiming certain
benefits and the challenges of creating further employment opportunities in difficult
economic circumstances, estimates for the direct impact of welfare changes on
household incomes in Wales suggest that there could be a significant impact on the
economy in both the short and long-term. For example, total annual income losses in
2011-12 have been estimated at £90 million, rising to £600 million between 2015 and
88
2016 .
89
Productivity and wages remain low :
 Between 2006 and 2011, GVA growth per head in Swansea was 6.6 per cent, lower
than the rate for the West Wales and the Valleys region, Wales and the UK.
 Median weekly full-time earnings for Swansea residents were £471, which is 7 per
90
cent below the UK average but above that for Wales . Median weekly earnings per
resident are roughly £30 higher than for workers.
2. Economic growth and development in Swansea
To address some of the economic challenges posed by the decline of heavy industry, from
the mid-twentieth century regional development policy in Wales focussed on attracting
inward investment. In order to facilitate the diversification of the local economy, government
87
Analysis of figures from November 2012, Swansea Economic Profile: May 2013, City and County of Swansea
Research and Information Unit
88
Welsh Government, Analysing the impact of the UK Government’s welfare reforms in Wales – Stage 2
analysis: summary of the key findings
89
See Swansea Economic Profile: May 2013, City and County of Swansea Research and Information Unit
90
Figures for April 2012, ASHE data cited in Swansea Economic Profile: May 2013, City and County of Swansea
Research and Information Unit
Cities, growth and poverty: case studies
40
resources – such as regional aid and infrastructure spending – were offered to attract foreign
direct investment to Wales. Foreign enterprises brought employment and there is some
91
evidence that they engaged in more high-tech operations than domestic firms . However,
Wales could not compete with global production centres, and lost large numbers of jobs to
China, South East Asia and Central and Eastern Europe between 1998 and 2008.
Attention shifted to enterprise and skills development from the mid-1990s
92
as foreign direct
investment became harder to secure. Throughout this period efforts were also made to
revitalise the local area, for example by improving transport links and undertaking a number
of physical regeneration projects, such as the redevelopment of the Swansea docklands into
the ‘Maritime Quarter’.
93
Another important project was the Swansea Enterprise Zone , established in 1981, which
offered financial incentives to attract new businesses to the area. Although the initiative
assisted in the physical regeneration of the valley, the evidence for its economic impact is
mixed, with some studies suggesting that it displaced business activity from elsewhere in the
94
city instead of generating new employment opportunities . One legacy of this project was
also the creation of a large, peripheral retail park: whilst this now has regional economic
significance it also serves as a competitor to the city centre. More recent development
95
plans have sought to address this tension by focussing on the regeneration of the City
Centre.
It is currently estimated that the European Regional Development Fund (2007-2013) has
enabled the creation of 468 enterprises and 1952 jobs (gross) in Swansea and Neath Port
96
Talbot . Meanwhile, European Social Fund programme indicators suggest that the
programme has supported a large number of participants into employment and further
97
learning and has enabled many to gain qualifications . But the performance of the projects
funded varies significantly. For example, the ESF-funded Genesis Cymru 2 project, which
was setup to enable 20,000 people to return to work in 2008, is likely to be closed early
following an internal review which identified under-performance issues.
91
See Evans, P., Holz, R., Roberts, A. (2008) Empirical Investigation of Foreign Direct Investment in Wales,
Report sponsored by Welsh Assembly Government research unit.
92
See Morgan, K. (1997) ‘The Learning Region: Institutions, Innovation and Regional Renewal’, Regional Studies,
31(5): 491-503; and also Pickernell, D. (2011) Economic Development Policy in Wales since Devolution: From
Despair to Where? CASS.
93
For an outline of the different phases of development in Swansea see Tallon, A., Bromley, R., & Thomas, C.
(2005) City profile: Swansea, Cities, 22(1): 65-76.
94
See Bromley, R. & Morgan, R. (1985) The effects of Enterprise Zone policy: evidence from Swansea, Regional
Studies, 19: 403-413; for an overview of the Enterprise Zone initiative see Tallon, A., Bromley, R., & Thomas, C.
(2005) City profile: Swansea, Cities, 22(1): 65-76
95
Such as the Swansea Unitary Development Plan (2008)
96
Source WEFO (15-02-13), in ‘ERDF Convergence 2007-2013: West Wales and the Valleys Programme
Monitoring Report’, March 2013
97
Breakdown of ESF convergence achievements based on key programme-level indicators p.21, source WEFO
(15-02-13) in ESF Convergence 2007-2013: West Wales and the Valleys Programme Monitoring Report, March
2013
Cities, growth and poverty: case studies
41
Despite efforts to revitalise the economy, and the fact that Swansea has had access to EU
funding for more than a decade, the local economy continues to be characterised by
relatively low productivity rates. Current development strategies have turned their attention
to the development of specific sectors of strategic value and with links to local activity.
In light of its declining population and the loss of services and jobs in local communities, the
local development plan for the neighbouring authority of Neath Port Talbot (2011) identified
enterprise growth as a key means of counter-balancing decline and enabling growth in the
local economy. Economic opportunities are also afforded to the authority by its proximity to
the M4 corridor.
The Wales Spatial Plan, which discusses some of the challenges for achieving sustainable
economic growth in Wales, envisages the Swansea Bay area as ‘a network of
interdependent settlements with Swansea at its heart’. Urban centres such as Swansea are
98
expected to spread prosperity, offering employment to the wider population of the region .
Partnership working is well-established and exists at a number of spatial levels, ranging from
the Swansea Bay area partnership, which includes the neighbouring unitary authority of
Neath Port Talbot (NPT), to regional partnerships working with the local authorities of
Carmarthen, Bridgend and NPT. Swansea also attracts EU funding because it lies within the
99
West Wales and the Valleys convergence area, which spans fifteen local authorities .
The Welsh Government is currently consulting on the creation of two city regions in the
South of Wales. The consultation report makes the case for a city region on the basis that
the Welsh regions do not tend to reflect functional economic geographies, having been
100
shaped to maximise opportunities to access EU funding opportunities , and because Welsh
local authorities are often small. Swansea would feature in the proposed Swansea Bay City
region.
Local initiatives promoting economic growth
The long-term regeneration strategy, ‘Swansea 2020’, emphasises the need to differentiate
between sectors and attract high value and high growth businesses: the predominance of
low-value manufacturing and low-pay, part-time employment, as well as an overdependence on the public sector, are identified as key risks to the economy. The strategy
proposes six strategic aims, with explicit mention made of the need to ensure economic
equity and increase the opportunities available to children and young people.
In addition to addressing these aims, there are three key means through which the strategy
98
Update to The Wales Spatial Plan: People, Places Futures (2008) p. 109; see also Welsh Assembly Government
(2012) City Regions Final Report, July 2012.
99
European Regional Development Funds (ERDF) and European Social Funding (ESF)
100
Welsh Assembly Government (2012) City Regions Final Report, July 2012.
Cities, growth and poverty: case studies
42
seeks to boost growth. Firstly, it proposes targeting key Focus Clusters, which have been
identified as likely to have a long-term economic impact and relate to particular local
strengths. The clusters are Higher-end Creative Industries, Information Technology and
Communications, Life Sciences, Marine Industries, Professional Business Services, and
Tourism
101
. Many of these clusters link in with activities at local Further and Higher
Education Institutes – such as the Creative Industries Incubator that is being developed at
102
Swansea Institute . The development of these clusters is to be enabled through the
provision of relevant infrastructure.
Secondly, and more generally, the strategy aims to support the development of the
knowledge economy. For example by securing more funding from the Higher Education
Funding Council for Wales (HEFCW); supporting knowledge intensive start-ups; and
strengthening the links between businesses and Further and Higher Education institutions.
Pickernell (2011) suggests that previous attempts to create a regional innovation system in
Wales were undermined by the fact that the policies did not target knowledge-based
entrepreneurship, instead focussing on growing small businesses and raising
entrepreneurship, both generally and for under-represented groups
103
.
Finally, the strategy proposes to change attitudes to entrepreneurship and ensure that
supply-side policies target high-growth firms. Whilst a variety of business advice and support
services are available nationally, the council has also prioritised enterprise education as a
means of changing attitudes toward enterprise and self-employment, with the Building
Enterprise Education in Swansea project particularly targeting young people.
Tackling low skills and reducing the number of people claiming long-term incapacity benefits
are also central to the delivery of the regeneration strategy. The Swansea Skills Task Force
is to define the training, skill and occupational development needs of local businesses and
ensure skills training is aligned with projected labour market needs, introducing additional
training where necessary.
Human capital policies dominated Welsh Assembly Government spending on productivity104
related policies between 2008 and 2011 . Many of the projects that have operated in the
Swansea area have attracted funding from the Welsh Government and Europe.
Commitment to partnership working is evident on a number of strategic and spatial levels.
105
One example is the Deprived Areas Fund (2009-2011) , a targeted area-based initiative
from the DWP that focussed on the development of partnership working and was active in
101
Swansea 2020: Swansea’s Economic Regeneration Strategy
For further examples see Strategic Aim 5: Focus Clusters, p. 42, Swansea 2020: Swansea’s Economic
Regeneration Strategy
103
Pickernell, D. (2011) ibid.
104
Analysis of data sourced from WAG in Pickernell, D. (2011) ibid
105
For an assessment of the partnership working see Green & Adam (2010) City Strategy: Final Evaluation,
Research Report no. 783, IER for the DWP
102
Cities, growth and poverty: case studies
43
Swansea. Want to Work, funded through the DAF, provided support to economically inactive
people so that they could gain focussed vocational qualifications in key industry sectors.
The following projects will also be central to the delivery of the wider regeneration
106
strategy :
 Swansea University Science and Innovation Campus, which will be based in Neath
Port Talbot, will combine academic research, industrial research and development,
skills training and academic courses. It is hoped that this will ensure strong links
between research and development and business activity.
 Expanding the Institute of Life Sciences in Swansea’s University College of Medicine.
 The Innovation Zone aims to enable the development of innovative micro-businesses
in Swansea, particularly by supporting graduates and attracting new businesses
through the inward investment and marketing functions. The initiative provides
business and innovation support, mentoring, access to finance and a skilled
workforce, as well as employment land.
 The Waterfront City regeneration programme targets the City Centre and includes a
Property Development Fund, a Building Enhancement Programme, and highway
works to improve accessibility
 South West Workways, a regional ESF-funded project, provides tailored support to
economically inactive and unemployed individuals. Participants can get support with
job search techniques, CVs and application forms, interview skills, as well as being
supported to access training and work experience.
3. Poverty alleviation in Swansea
Swansea has an above average share of Lower Super Output Areas (LSOAs) in the top 10
per cent of deprived areas in Wales, performing relatively poorly on the education, income
and health dimensions of the deprivation index
107
. A number of challenges have to be
addressed in Swansea if poverty is to be reduced, particularly high levels of economic
108
inactivity, poor health, low skill and attainment levels, and a lack of jobs .
The Welsh Government’s Poverty Action Plan 2012-2016 rejects the idea that increases in
106
Overview provided in Peter Brett Associates LLP for Neath Port Talbot Borough Council and City & County of
Swansea Council (2012) Final Report: Economic Assessment & Employment Land Provision for Swansea and
Neath Port Talbot.
107
City & County of Swansea, Welsh Index of Multiple Deprivation 2011, Research and Information Unit,
Briefing Note
108
Analysis from 2009 suggests that there are only 75 jobs for every 100 members of the working age resident
population, see Peter Brett Associates LLP for Neath Port Talbot Borough Council and City & County of Swansea
Council (2012) Final Report: Economic Assessment & Employment Land Provision for Swansea and Neath Port
Talbot
Cities, growth and poverty: case studies
44
109
wealth will ‘trickle down’ to individuals and communities in poverty , framing a more
explicitly interventionist approach to poverty reduction under the Labour government in
Wales.
Key features of poverty reduction strategies
There are three strands to the national poverty action plan: preventing poverty; helping
people out of poverty by enabling them to access job opportunities; and mitigating the impact
of poverty. The plan is to be delivered through a series of strategic initiatives. One example
is Communities First, which aims to narrow the education and skills, economic and health
gaps between the most deprived and the most affluent areas in Wales by providing funding
for community development activities in deprived areas.
In addition to the national anti-poverty programmes operating in the local area, there are a
number of local initiatives in place. There is high-level support for tackling social justice
issues, with activity initially focussing on reducing the number of NEET young people aged
16-18 through the Keeping In Touch (KIT) strategy, put in place to more effectively track
young people through the education and training system. The focus has now shifted to
include a wider band of young people.
Some examples of local initiatives are:
 Multi-agency working in two target areas: the two most deprived areas within the city
are to receive targeted support from the council across the range of services that it
provides. For example, the housing in these areas has been prioritised for upgrading;
 Action research, which sought to understand the experience of living in poverty in
Swansea;
 The council are piloting a training course for staff to address workforce attitudes. It
aims to change attitudes toward people from particular disadvantaged areas of the city
to ensure that the services they are able to access are not shaped by preconceptions;
 The Beyond Bricks and Mortar approach, initiated in 2009, aims to negotiate the
inclusion of social benefit clauses in the tendering process for major regeneration
projects. Building on section 106 powers, the initiative introduces local recruitment
targets, and apprenticeship and work placement opportunities, and seeks
commitments to local sourcing;
 Linking people to employment opportunities: Careers Wales West have been working
with other key agencies to create opportunities for local people to get closer to
employment opportunities through CV workshops, Work Clubs and the Positive Steps
training programme. In Townhill they worked with an Amazon recruitment agency to
109
Noted in the ministerial forward to the Welsh Government’s Tackling Poverty Action Plan 2012-2016
Cities, growth and poverty: case studies
45
provide mock tests and interviews to prepare residents to apply for positions with
Amazon during the pre-Christmas period. Work Ways, a project that attracts European
funding, also aims to raise the employability of the local economically inactive
population;
 Raising aspiration by developing high flyer awards, which are targeted at young
people in disadvantaged areas who are making a positive contribution to their family
or the wider community.
4. Linking economic growth and poverty alleviation in Swansea
At a city-level, clear links have been drawn between tackling poverty and promoting
economic growth, with economic equity a strategic goal within the regeneration strategy. Yet
the productivity challenges that Swansea faces potentially limit the scope to address poverty
by developing further links with the economy. In light of this, the strategy underlines the need
to create highly skilled and better paid jobs so that ‘the benefits flow to the whole economy,
creating new opportunities for all wishing to enter the workforce’
110
.
In part, economic equity is to be achieved by supporting people to become economically
active and ensuring that there are links between economic opportunity and social need. The
main ways in which local policy seeks to promote economic growth and reduce poverty are:
 By providing targeted and differentiated support for economically inactive residents
and people in the wider region;
 By encouraging partnership working and multi-agency approaches to addressing
deprivation and worklessness.
Regional strategies also identify Swansea as a source of prosperity for the region, perhaps
in light of the limited employment opportunities that are on offer elsewhere. In addition, there
is recognition of the need to tackle health inequalities, and Swansea council are working with
the Marmot review team on a two year accelerated programme to build capacity in this
111
area. .
110
111
Update to The Wales Spatial Plan: People, Places Futures (2008)
Williams, N., Miller, S., & Tregoning, N. (2012) Accelerating progress to reduce health inequalities.
Cities, growth and poverty: case studies
46
7. Leeds Case Study
Lower than average GVA growth, declining poverty
1. Introduction
Leeds is a major city in northern England and is located in Yorkshire and the Humber. It is
one of the English Core Cities, an association of the eight largest city economies outside
London, which exists to enhance economic performance in the eight cities
112
. The Leeds
local authority area has a population of just under 800,000 according to ONS estimates.
Reflecting its scale and importance in the area, Leeds is the main administrative and
employment centre of Yorkshire and the Humber.
The empirical analysis which has been undertaken defines cities in terms of travel to work
areas, and in some cases these cut across local authority boundaries and / or incorporate
multiple authorities. In the case of Leeds, the city is defined for purposes of the analysis as
the Leeds travel-to-work area only, which also corresponds to the Leeds local authority area.
Leeds has experienced better than average poverty reduction and lower than average
economic growth compared with the other cities. Leeds is below the median for growth, but
113
many commentators regard Leeds as a successful city because of strong recent growth .
There are several issues which complicate the telling of the story in regard to Leeds’ growth
profile. So despite it generally being held as a success story, the analysis indicates that from
2001 to 2008 growth in GVA per worker was below the median level. This could indicate that
the high value employment growth which drives GVA was limited to a few high profile
industry sectors which have attracted disproportionate reporting. Leeds may also have
achieved employment growth in sectors, such as retail, which do not drive up GVA per
capita.
The Centre for Cities, Cities Outlook (2013) notes that Leeds is one of the cities which has
performed better in the second part of the recession (2009-2012) than the first (2008-2009).
This is based on an index comprising claimant count, wages, size of business base and
house prices rather than growth, but this may be indicative of general improvement in
economic performance. The account does not provide analysis or commentary on the
112
Further information about the Core Cities is available at http://www.corecities.com/
Meegan, R (2012) Leeds and National Policy UK
http://www.espon.eu/export/sites/default/Documents/Projects/AppliedResearch/SGPTD/Part_C_-_SGPTD__Scientific_Report.pdf
113
Cities, growth and poverty: case studies
47
reasons or explanations for the improvement shown in the Leeds case.
Leeds is ‘widely regarded as a northern England success story for its recent growth’
114
both
in terms of population expansion and growth in the numbers of jobs. As an illustration of the
employment growth in Leeds, over the ten year period between 1996 and 2006, more jobs
115
were created in Leeds than in any other city . It is particularly notable for being a centre for
commercial and financial services, and there has been significant expansion in public sector
jobs in the higher education, administration and medical services fields. This growth in both
the public and private sectors makes Leeds somewhat unique when compared with other
cities.
Drivers of growth
Leeds has a long history of employment diversity, not being exclusively reliant on one
th
particular employer or industry for its jobs. The 19 century was a period of rapid urban
expansion in Britain and Leeds was one of the cities which increased at a rapid pace. The
population grew from 30,000 in 1801 to 150,000. Good transport links were in part
responsible for this growth; the Leeds–Liverpool canal was completed in 1816 and by 1848
Leeds had railways on all major routes. In addition to this good availability of coal from the
surrounding collieries made Leeds an attractive place for a number of manufacturing and
116
engineering industries to locate .
th
The decline of the textile industry in the later part of the 19 century did not cause mass
unemployment in the city. For example the textile industry contracted by 20 per cent
117
between 1891 and 1901 but because other industry sectors were able to expand to fill the
gap the effects were not so keenly felt as in other cities. The spread of employment in Leeds
across different industry sectors is both a historical and a contemporary feature. It is noted
for example by the Leeds City Region that this diversity of employment means that Leeds
118
scores well on measures of economic resilience .
Key features of the economy
Although Leeds has a reputation of being a city which has a vibrant private sector, the public
sector also provides a significant proportion of jobs. The 2004 vision notes that the NHS and
119
the city council account for nearly one quarter of the city’s jobs and this order of public
sector employment is supported by the most recent information available from the Annual
114
Meegan, R (2012) Leeds and National Policy UK
http://www.espon.eu/export/sites/default/Documents/Projects/AppliedResearch/SGPTD/Part_C_-_SGPTD__Scientific_Report.pdf
115
Leeds City Council (2009) The Leeds Agenda for improved economic performance, Leeds, Leeds City Council
116 Leeds City Council (2009) The Leeds Agenda for improved economic performance, Leeds, Leeds City Council
117
Centre for Cities (2012) Cities Outlook 1901, London, Centre for Cities
118
Leeds City Region (2012) Realising the potential: The Leeds City Region Local Enterprise Partnership Plan,
Leeds, Leeds City Region
119
Leeds Initiative (2004) Vision for Leeds, Leeds, Leeds Initiative
Cities, growth and poverty: case studies
48
120
Business Inquiry (ABI) . ABI data also indicate the importance of the service sector (both
public and private) as an employer to the city.
Leeds, like every city was hit hard by the recession. Sectors which had grown quickly were
also ones which contracted most rapidly. The result was that Leeds lost over 20,000 jobs
during the recession
121
.
Leeds local authority (LA) area is somewhat unusual as some of the more affluent suburbs
and outer areas are included within the city boundaries, in addition to the more deprived
inner city areas. This relative ‘overbounding’ makes Leeds distinctive when compared with
other second tier cities.
The way in which the city boundaries are drawn is important when contrasting Leeds with
other major English and UK cities. For example inclusion of the more affluent outer areas as
well as the more deprived inner areas may suggest greater polarisation of income in Leeds
when contrasted with other cities whose boundaries are more tightly drawn. Centre for Cities
(2013) notes that Leeds is one of the ten cities with the highest levels of inequality – as
measured by differences in JSA rates at LSOA level. In short, overbounding results in higher
scores on measures of polarisation and lower scores on measures of average deprivation.
If policies are targeted at a functionally defined area, such as travel-to-work areas, then this
issue is not so much of a problem. It does become an issue when economic development
policies are focused on the local authority. There are hence implications for whether policies
are targeted at local authority level, city level, city region level, travel-to-work area etc.
2. Economic growth and development in Leeds
The scale at which policy is constructed and operated is an important consideration for all
cities and especially so in the case of Leeds. Leeds local authority (LA) is part of the Leeds
City Region (LCR); and it is at LCR level which many decisions are taken and powers
operate. It is at the LCR level that the Local Enterprise Partnership (LEP) now operates with
its goals to:
 Increase GVA by at least 2.6 per cent per annum up to 2030;
 Restore the pre-recession employment rate through the creation of 60,000 jobs by
2016 and an absolute increase in each area’s employment rate year on year;
 Decrease substantially carbon emissions
122
.
The LCR is relatively large and takes in cities, towns and villages across ten other LAs (in
120
http://www.nomisweb.co.uk/reports/lmp/la/1946157127/report.aspx
Leeds City Council (2011) Leeds Growth Strategy: Getting Leeds working, Leeds, Leeds City Council
122
Leeds City Region (2012) Realising the Potential: The Leeds City Region Local Enterprise Partnership Plan,
Leeds, Leeds City Region Partnership
121
Cities, growth and poverty: case studies
49
addition to Leeds). It therefore covers a much larger area than the Leeds travel-to-work area
on which the empirical analyses above are based. The ten other Las are Barnsley, Bradford,
Calderdale, Craven, Harrogate, Kirklees, Leeds, Selby, Wakefield, York and part of North
Yorkshire. This arrangement has been recognised (along with Manchester) as a fore-runner
for city-regional governance.
The City Deal for Leeds also operates at the level of the LCR. Included within the City Deal
are the following arrangements:
 A £1 billion fund to improve public transport and the highways network, with the
potential to create 20,000 jobs in the medium term;
 An additional £400m fund to strengthen infrastructure across the City Region;
 The creation of a 14-24 apprenticeship academy in Leeds, giving young people and
local employers access to opportunities and training;
 The development of an ‘Apprenticeship Hub’ network, aiming to generate 15,000 new
apprenticeships in the next four years;
 Initiatives to increase overseas trade and inward investment activity, which could bring
123
7,400 jobs by 2018 .
Practitioners at the local level noted that current arrangements through the LEP framework
and through the City Deals attract much lower levels of funding than when areas based
initiatives were pursued and when RDAs were one of the main co-ordinators of spending at
the regional level.
Regional Development Agencies (RDAs) previously played an important role relating to
economic development in England. The abolition of RDAs was announced in the Localism
Bill of 2010 and all RDAs ceased to operate in March 2012. One of the principal duties of
RDAs was to keep under review a Regional Economic Strategy. The RDA covering Leeds
was Yorkshire Forward. The LEPs are often discussed as RDA replacements, albeit with
much reduced spending power when compared with their forerunners. In fact the problem for
the RDA was not lack of resource, rather the challenge of making sure that the resource was
spent and finding suitable projects to which the money could be allocated. Underspends in
budget could not be rolled forward so there was pressure to make sure that money was not
handed back. The problem was compounded by the fact that the budgets which the RDA
handled increased substantially so that the uncommitted money which the RDA had to
allocate went from about £20 million to £150 million. The scale of the challenge of allocating
this budget meant that the RDA had to set up its own protocols and procedures to allocate
123
Leeds City Region (2012) Unlocking Our Economic Potential: A Leeds City Region Deal, Leeds, Leeds City
Region Partnership
Cities, growth and poverty: case studies
50
the money in a consistent and transparent manner. The need to set up and operate through
these systems arguably constrained the flexibility which the RDA had been granted.
Politics also affected how the RDA operated. Its role was to focus on economic growth and
to that extent it focused on business investment; labour market interventions and antipoverty strategies were somewhat outside the brief. In line with the growth agenda, it could
have made sense for the RDA to concentrate a great deal of activity in Leeds on the basis
that it represented the most likely location for sustained economic growth. However the fact
that the RDA was also based in Leeds meant that it was felt, at least in one conversation,
that the RDA was at pains not to be seen to be favouring Leeds, even though an objective
case for doing so could have been made.
The Leeds Initiative was set up in 1990 by the City Council and the local chamber of
commerce and comprised the public, private, community and voluntary sectors. This body
has produced a series of visions or strategy documents setting out visions or strategies for
the city’s development. This partnership arrangement signified a more proactive approach to
development, and has been a vehicle for co-ordination of the various policies (national,
regional and local), the funding streams and the other agencies which operate within the
124
city . Notwithstanding observations such as these, the decision was taken to discontinue
125
the Leeds Initiative in 2013. The visions produced by the Leeds Initiative and the priorities
for economic development developed through these visions.
Local initiatives promoting economic growth
In interviews local stakeholders stressed that jobs, job creation and employment levels were
of prime significance. Growth was not necessarily the primary issue.
One interviewee suggested that it was important for the politicians to couch the debate in
terms of jobs rather than economic growth. This is how they prefer to understand and frame
any discussions. Another noted in discussing the LEP strategy that it would not be possible
to agree a strategy which “did not include reference to jobs and the importance of trying to
create new additional jobs”. Similarly a further interviewee described the challenge facing
local decision makers in terms of “employment opportunities” and particularly for those from
the most disadvantaged communities. Although noting the importance both politically and
economically of sustainable job creation, one interview stressed the need to be aware that
growth too needs to be prioritised and that it cannot be taken for granted or simply assumed
to happen. This point was made in relation to the economic climate; previously it might have
124
Meegan, R (2012) Leeds and National Policy UK
http://www.espon.eu/export/sites/default/Documents/Projects/AppliedResearch/SGPTD/Part_C_-_SGPTD__Scientific_Report.pdf
125
Leeds Initiative (1999) Vision for Leeds – A strategy for sustainable development, Leeds, Leeds Initiative
Leeds Initiative (2004) Vision for Leeds, Leeds, Leeds Initiative
Leeds Initiative (2011) Leeds 2030: Our vision to be the best city in the UK – Vision for Leeds 2011 to 2030, Leeds,
Leeds Initiative
Cities, growth and poverty: case studies
51
been possible for growth to occur without policy being directed towards that aim, but this way
of thinking is being challenged by the vastly changed economic circumstances
At least one interviewee raised issues with measuring economic performance using GVA.
Since GVA is derived from economic activity rates and wage levels, it can be boosted by
increases in wage levels at the top end, and that increases might be a result of greater
polarisation of the earnings. This issue of polarisation is important and may be more relevant
in Leeds compared with other cities due to its corporate focus and focus on more higher
value jobs.
Another interviewee also reflected on the relative balance between pursuing policies which
were about growth versus ones which were about tackling poverty, noting that is not a
simple question as to whether to focus on growth or poverty. The interviewee cited previous
debates where politicians put forward the argument that growth is not what should be
concentrated on, rather poverty, inequality and exclusion are more important.
“But the end result you come to if you have that debate is that if you have a
successful economy which is growing and creating employment opportunities,
then you’ve got a better chance of tackling poverty and inequality by using those
employment opportunities because the true solution for poverty for many people
is actually in employment earning money so they can lead sustainable better
quality lives. So for us the poverty and inequality agenda has been a big issue
for some time and how we join that up”
In terms of the LEP strategy, there are two targets and they relate to GVA and to job creation
rather than to social inclusion, poverty or social cohesion. Given the remit of the LEP this is
to be expected. The stated targets are for an average GVA growth of 2.6 per cent per year
by 2016 and to create 60,000 jobs by 2016.
Sector focus
Early years of Leeds Initiative focused on the private sector such as financial services and
126
manufacturing and this was done through a number of sectoral partnerships . These
sectoral partnerships, such as the Leeds Financial Services Initiative and Leeds
Manufacturing Initiative acted as conduits for the Leeds Initiative to engage with the private
sector. This focus on the private sector led to Leeds being known, or having a reputation, as
a ‘corporate city’, though in more recent times there has been job growth in both public and
private sector employment.
One of the interviewees noted that it was about ten years ago that Leeds realised that lots of
126
Meegan, R (2012) Leeds and National Policy UK
http://www.espon.eu/export/sites/default/Documents/Projects/AppliedResearch/SGPTD/Part_C_-_SGPTD__Scientific_Report.pdf
Cities, growth and poverty: case studies
52
major companies (such as accountancies and consultancies) were looking to rationalise and
consolidate their businesses into single locations rather than being spread out. As a result of
this Leeds began to market itself as having a good corporate business offer. The interviewee
thought that Leeds’ success in attracting these companies to the city was due to two main
factors – the location of Leeds and its accessibility to other cities by road, rail and air, and
the regeneration of Leeds city centre, which transformed the city’s appearance and meant
that it was the sort of place where companies would be happy to operate. The regeneration
of the city centre in order to make it more attractive as a place to live, work and pursue
leisure activities is an element of work which has previously been stressed by the Leeds
initiative
127
.
Leeds retains a focus on certain sectors of the economy. Sectors which are identified as
important to the Leeds economy are:
 Retail;
 Leisure and Tourism;
 Health and Medical;
 Cultural, digital and creative industries
128
.
At 2004 the strategy also made reference to manufacturing, environmental industries and
the public sector as sectors which merited support in the interests of promoting a varied
economy within Leeds
129
.
Area focus
As noted, Leeds has particular issues with polarisation and with areas of deprivation. The
130
issue is noted in various strategy documents, such as the vision to 2020 but also is
recognisable in the 2011 Growth Strategy which states that “too many communities are cut
off from employment and the wealth of a growing city”
131
. So although the Leeds economy
has grown, there has been concern that the proceeds of this growth are not being shared
across the population.
One interviewee suggested that one of the lessons is from recent experience is that it is
incredibly difficult to be successful in creating jobs and businesses in deprived areas. There
is increasing recognition that in terms of getting people into work there needs to be
acceptance that the jobs people will do might not necessarily be as close to where they live
127
Leeds Initiative (2004) Vision for Leeds, Leeds, Leeds Initiative
Leeds Initiative (2011) Leeds 2030: Our vision to be the best city in the UK – Vision for Leeds 2011 to 2030,
Leeds, Leeds Initiative
129
Leeds Initiative (2004) Vision for Leeds, Leeds, Leeds Initiative
130
Leeds Initiative (2004) Vision for Leeds, Leeds, Leeds Initiative
131
Leeds City Council (2011) Leeds Growth Strategy: Getting Leeds working, Leeds, Leeds City Council
128
Cities, growth and poverty: case studies
53
as in the past – the emphasis needs to be on ensuring people have got the skills and the
transport to access those jobs. The interviewee did make the point that it is difficult to sell
this position to individual ward councillors who obviously have a vested interest in ensuring
that employment opportunities are created in the areas they represent.
The observations of this interviewee highlight some of the challenges of finding evidence on
the effect of some of the local policies. For good reasons policies at the local level are not
often evaluated – another interviewee conceded that the primary purpose was to deliver the
interventions and there often wasn’t the time, budget or expertise to build in evaluation of the
work from the start. Policies are routinely monitored and those responsible for delivery may
have some intelligence about which are more successful than others and why, but it is
difficult to find evaluation reports for local activity.
Specific policies can be found which link in to some of the objectives as set out in the various
visions developed by the LSP. Evaluation of the EASEL (East and South East Leeds)
132
regeneration project cites the project as a concrete example of how the Leeds Initiative
attempted to address the strategic aim of narrowing the gap between the disadvantaged
areas and individuals and the rest of the city. The EASEL project had a number of objectives
including providing new job opportunities in the designated areas and links to opportunities
in nearby more prosperous areas. The project was heavily reliant on a private sector housing
company and its links with Leeds City Council to create and forge sustainable communities.
Tompkins’ (2010) account of the EASEL experience focuses on the partnership elements of
EASEL and does not attempt a systematic analysis of the success or otherwise against each
of the objectives, so there is little evidence of success in creating new jobs in the
neighbourhoods and the surrounding areas. One interviewee considered that the project was
a failure, possibly due to the development partner selected, though it must be recognised
that the project was running at a time when the economic system was going into reverse.
Levers available at city level
The factors which previously drove economic growth – i.e. public sector investment,
consumer spending, and the financial services sector can no longer be relied upon to deliver
growth in the future. Similarly the levels of area based government funding which were
available under the previous administration are no longer on offer. These may be ‘generic’
points which are applicable to a number of cities, but nevertheless interviewees wished to
draw attention to them in the example of Leeds. There may be certain questions about the
efficacy or value for money of these types of funding – see below – but the point remains
that even though the funds may have had limited impact, even that limited impact will no
longer be possible. One interviewee argued that Leeds had done particularly well in terms of
investment in the city centre which came from public money. The focus had not particularly
been towards growth; it did happen, but it was a by-product of the employment boom, and
132
Tompkins, S.A. (2010) Evaluating Multi Sector Partnerships in the Creation of Sustainable Communities: The
Case of the East and South East Leeds (EASEL) Regeneration Plan, Earth and Environment 5, 66-98
Cities, growth and poverty: case studies
54
particularly in the financial and business service sectors, increases in public spending and
debt-fuelled consumer spending.
Some of the levers which are available at a local level are not necessarily to do with funding
pots but rely on more subtle mechanisms. For example one interviewee noted that the
collective lobbying power of the Core Cities was one of the reasons behind some of the
changes to the changes to retention of business rates. Naturally though these benefits are
conferred on other cities and not just Leeds, but as a member of the Core Cities group
Leeds is able to exert more influence on what these benefits might be. Another interviewee
picked up on this theme of influence and made the point that to gain leverage on national
government has to happen at a range of levels. Cities can make big asks for flexibility and
freedoms through various initiatives, and at a more local level cities can seek to work more
closely with local delivery arms for national strategies to try to shape the way in which that
policy is delivered in practice. This interviewee also noted the need for Leeds to be more
outward looking and dynamic in its approach. To achieve this it was necessary for Leeds to
be prepared to have conversations at a range of levels and to be prepared to try new
initiatives. For example, if a government department wanted to pilot a new initiative, then
subject to it being appropriate, Leeds ought to be bidding to be a pilot area. Key to success
in this type of strategy are the relationships which can be fostered between those people
working for Leeds and those who are responsible for rolling out national policies. The fact
that the youth contract arrangements in Leeds, Wakefield and Bradford are devolved was
cited as evidence of what this more proactive approach was able to achieve.
Funding pots
An interviewee picked up on the issue that interventions tended to respond to the funding –
as one would expect – so that they could be characterised as “funding and bid led” with “too
much ad hoc bidding - bid, get and spend the money”. This is in contrast to setting a
strategic framework and then fitting in opportunities to that framework as and when they
materialise. The degree to which strategy or availability of funding shapes choices is what
this interviewee is deliberating. There is an issue about whether cities such as Leeds have to
follow such strategies; this may not necessarily be the case for some larger cities or those
which may be ‘high profile’ in whatever sense.
2. Poverty alleviation in Leeds
Despite Leeds’ increased prosperity over recent times, there is recognition that there remain
too many deprived areas. Part of the vision 2030 includes commitments to tackle these
multiple problems of poverty and ensure that there is improvement in all localities within
Leeds
133
.
133
Leeds Initiative (2011) Leeds 2030: Our vision to be the best city in the UK – Vision for Leeds 2011 to 2030,
Cities, growth and poverty: case studies
55
Key features of poverty reduction strategies
Financial inclusion is an issue which has been high on the agenda in Leeds for some time.
134
Research undertaken in 2004 set out to map the scale of financial exclusion across the
city and to make recommendations to tackle the problem. High levels of prosperity were
found to co-exist alongside high levels of deprivation with over 20 per cent of electoral wards
being amongst the most deprived in England; hence the research framing Leeds as a “Two
speed Leeds”.
The approach taken towards financial inclusion in Leeds is one which could have been
enacted by a number of cities and indeed the methodology behind the approach has been
shared with other local authorities through the Beacon status award which Leeds received in
2007 from the Government’s Improvement and Development Agency (IDeA) in the theme
‘promoting financial inclusion and tackling over-indebtedness’.
The initial impetus to financial inclusion moving up the agenda was described as
“serendipitous” by one of the stakeholders. Through work producing the refresh of the
135
Economic Plan of 2002 the economic development team became aware of the scale of
the issue with people in Leeds having to accept credit on particularly disadvantageous terms
from door step lenders or other sources.
The economic development team approached this problem from the point of view that if
people were paying high, even exorbitant, rates of interest on loans, this was taking money
136
out of their pockets and potentially taking money out of the local economy. Later research
attempted to quantify the size of the effect of the financial inclusion work being done across
Leeds. This work found that for every pound invested in the financial inclusion work, £8.40
was generated for the regional economy. A budget of £3.3M produced £26M extra
disposable income for clients and a benefit to the regional economy of £28M. In addition to
these benefits shown by the input-output model, there may also benefits which are less
easily quantified such as improvements in self-esteem and / or mental health among the
service users.
Reflecting on the success of the financial inclusion work in Leeds, an interviewee closely
involved with the development of the agenda, pointed to the importance of political
consensus about the need for this work. It had started under a Labour led administration,
which subsequently changed to no overall control (a Liberal Democrat and Conservative
Leeds, Leeds Initiative
134
Dayson, K & Dawson, J (2004) 'Exclusion to Inclusion: Financial Exclusion in Two Speeds Leeds', Leeds, Leeds
City Council
135
Leeds Economy Partnership (2003) Leeds Economic Development Strategy 2002 Review, Leeds, Leeds City
Council Development Department
136
Dayson, K & Conaty, P & Dawson, J & Marchant, B & Salt, A & Vik, P (2009) 'Financial Inclusion Initiatives:
Economic impact and regeneration in city economies - The case of Leeds', for: Leeds City Council, Community
Finance Solutions, University of Salford, Salford, United Kingdom.
Cities, growth and poverty: case studies
56
coalition was formed) and then back to Labour. The consensus meant that councillors of
whatever party could fully commit to being involved in this work without being concerned that
they would attract criticism for doing so. The importance of the work is demonstrated by the
fact that the council support the credit unions with approximately £¼M annually. This money
has been defended even in the context of the council reducing its annual budget by £90M.
The political support given to the financial inclusion work is also due in no small measure to
being able to demonstrate the success through the evaluation work in a way which shows
that there are tangible benefits to the work. It moves it away from essentially being
something about charity and trying to improve the lives of ‘poor people’, however laudable
that intention may be, to something which can have real economic benefit and that is the sort
of evidence which really gives strength to the argument that the work is important. Moreover
the gains of the work are likely to be retained in the poorest, most deprived communities.
This sort of work has the potential to be a more effective method of reviving these deprived
areas and neighbourhoods, rather than programmes of physical regeneration or of human
capital improvement.
2. Linking growth and poverty alleviation in Leeds
137
The Leeds Initiative produced three visions which outlined the strategy for Leeds. The
number and breadth of signatories increased for each of the three visions (1999, 2004 and
2011).
The Leeds Initiative had two key priorities:
1. Going up a league (in terms of improving economic performance in relation to other
cities);
2. Narrowing the gap.
138
The idea of narrowing the gap appears in the strategy of 2004 . Specifically it includes an
aim to narrow the gap between the most disadvantaged individuals and communities and the
rest of the city. The 2011 vision talks about Leeds being the ‘best city’ – ‘not the richest or
the biggest, but the best for all who live and work in Leeds’. It is clear from these statements
that there are elements of cohesion, equality and social justice in addition to
competitiveness.
This stance may in part be attributable to the fact that growth in Leeds has traditionally not
been shared equally. The growth of the early 1990s and the rise of the ‘corporate city’ was
also characterised by division. Growth jobs were taken by residents of wider CR – more
prosperous areas anyway, though the level of analysis will obscure some instances of
137
Leeds Initiative (1999) Vision for Leeds – A strategy for sustainable development, Leeds, Leeds Initiative
Leeds Initiative (2004) Vision for Leeds, Leeds, Leeds Initiative
Leeds Initiative (2011) Leeds 2030: Our vision to be the best city in the UK – Vision for Leeds 2011 to 2030, Leeds,
Leeds Initiative
138
Leeds Initiative (2004) Vision for Leeds, Leeds, Leeds Initiative
Cities, growth and poverty: case studies
57
individual deprivation. High polarisation of wages by city region indicating the degree to
which high income households are concentrated in the wider CR and low income ones in the
139
inner city . This interpretation may not pay enough attention to the bounding issues (see
above) which are specific to the Leeds context.
By stating ‘narrowing the gap’ as an objective there was an explicit link made between
growth and poverty. Despite the strong economic performance in the city, especially
between 2001 and 2008 and in terms of employment growth, Leeds has made little progress
on narrowing the gap between the most disadvantaged neighbourhoods and communities
and the rest of the city
140
. Neighbourhood-based initiatives using a number of different types
of funding have been evaluated as successful in terms of meeting such targets as
engagement, business development and employment, but these gains may not necessarily
translate into an effect on aggregate levels of poverty, if employment gains are being offset
141
by losses elsewhere and / or the gains are not being shared equally. Accounts point to
‘the intransigent nature of the problem’ and that ‘while market economies raise the base
level of wealth, they also see social and economic disparities widen in the absence of
intervention’. The most disadvantaged neighbourhoods may be improving, but the more
advantaged neighbourhoods are also improving and hence the gap remains and even
widens. This is one interpretation of what could be happening. There are also unanswered
questions about people or place effects. If individuals experience are able to secure
employment, do they then move from the most disadvantaged neighbourhoods to
somewhere more affluent, only to be replaced by someone with high levels of disadvantage.
The type of job creation is also an important factor. Leeds has experienced growth in certain
sectors which may be characterised as providing more high level jobs. There is a recognition
(mentioned in at least one interview) that the creation of higher level jobs, and therefore
ones which require higher levels of qualifications to enter, does not necessarily fit well with
the aims of narrowing the gaps between communities. It was not a conscious decision to
target the creation of some of these higher level jobs as such, rather it was a response to a
declining manufacturing base and opportunities presenting themselves in respect of the
service industries and particularly those relating to financial, business and legal services.
One of the ways in which the council has been successful in trying to influence contracts
when and where it can is the Trinity Leeds shopping centre and Leeds Arena developments.
One interviewee drew attention to clauses which were inserted into contracts to guarantee
both job opportunities and apprenticeship opportunities for individuals from the most
139
Schmuecker, K and Viitanen, J (2011) Richer yet poorer: Economic inequality and polarisation in the north of
England, Newcastle Upon Tyne, IPPR North
140
Meegan,
R
(2012)
Leeds
and
National
Policy
UK
http://www.espon.eu/export/sites/default/Documents/Projects/AppliedResearch/SGPTD/Part_C_-_SGPTD__Scientific_Report.pdf
141
Meegan, R (2012) Leeds and National Policy UK
http://www.espon.eu/export/sites/default/Documents/Projects/AppliedResearch/SGPTD/Part_C_-_SGPTD__Scientific_Report.pdf
Cities, growth and poverty: case studies
58
deprived areas. These arrangements through section 106 are one of the ways which the
council can link in with the private sector in order to link particular types of people with
particular types of employment. They are most often used in developments which require
large numbers of construction jobs and / or where the end users will recruit in high volume at
entry level; thus these may not be the sorts of jobs which produce high GVA. Section 106
powers are available for all local authorities, but they may be applied in different ways. One
interviewee stressed that within Leeds the issue of how to apply these more creatively and to
achieve the greatest effect was constantly under review.
The approach in Leeds has focused on key sectors for growth to build on the city’s long
association with a diverse employment profile. Many of the options which have been used to
drive economic growth are common to other cities and the tools which have been used to
link people up with these jobs, e.g. information, advice and guidance (IAG), supply side
measures, section 106 clauses, are familiar elsewhere.
Leeds is distinctive in the approach it has developed within the area of financial inclusion.
This approach shows some of what can be achieved at the local level and is an excellent
example of how policies which may be thought of as tackling social problems can also have
economic benefits.
Cities, growth and poverty: case studies
59
8. Barnsley Case Study
Lower than average GVA growth, declining poverty
1. Introduction
The Metropolitan Borough of Barnsley falls into two LEP areas: Leeds and Sheffield. It has a
142
population of approximately 226,000 .
The historical trajectory of Barnsley has been typical of many of the northern towns whose
economies were largely built around a single industry. When this industry grew, the local
economy was strong, and employment levels were high, but when this industry declined, the
effect on the local economy was devastating. Historically, the economy of Barnsley was
based on coal and its supporting industries. Work was male-dominated, plentiful, reasonably
well-paid, and required specialised skills, often learnt on the job, but few academic
qualifications. Employment in the textile industry accounted for a large proportion of female
employment. The service sector, excluding that which was necessary to meet the needs of
the local population, was largely non-existent, particularly in smaller towns and villages.
In the 1980s and early 1990s, employment in the former Yorkshire coalfield declined rapidly
(in contrast to the more drawn-out decline in South Wales and elsewhere). Between the
143
early 1980s and early 1990s nearly 20,000 coal mining jobs were lost , and Barnsley was
also hit by job losses in the textile industry. Despite this, as late as the early 1980s, coal
144
mining was perceived as providing secure employment , and few preparations had been
made to transform or diversify the local economy before mass redundancies hit. Barnsley,
with economic policy and practice driven by demand-side factors, now found itself with a
population whose skills equipped them specifically for employment in industries where
demand had virtually ceased to exist.
The legacy both of the growth and decline of Barnsley’s economy is evident today. The
service sector, although growing, remains relatively less developed, qualification levels are
below the national (and regional) average, high levels of ill-health, once associated with
mining, persist in its absence and the Barnsley labour market is characterised not just by a
lack of ‘good’ (higher paid, higher skilled) jobs, but by a lack of employment opportunities per
se.
142
Beatty, C., Fothergill, S., Gore, T. and Powell, R. (2011) Tackling Worklessness in Britain’s Weaker Local
Economies. Sheffield Hallam University
143
Beatty et al. (2011) ibid.
144
Glyn Owen Associates (2004) The Economy of the Dearne Valley: Report to Yorkshire Forward
Cities, growth and poverty: case studies
60
2. Economic growth and development in Barnsley
As Barnsley has sought to regenerate its economy after the loss of mining employment, two
key themes have emerged in policy-making:
1. Plans should be realistic, grounded in the realities of Barnsley’s current situation;
2. Barnsley should capitalise on the success of its regional neighbours and draw upon their
resources as part of its own growth strategy.
Key barriers to economic growth in Barnsley include:
 The small number of employers in the area, competition for business investment from
somewhat more prosperous neighbouring areas and leaking of consumer expenditure
to these neighbouring areas;
 Over-reliance on the public sector for employment and as a catalyst for economic
growth;
 Lower than average productivity;
 High levels of worklessness;
 Lack of adequate development sites for businesses and executive housing, both in
terms of size and quality;
 Low levels of basic numeracy and literacy; a higher than average proportion of the
population with no qualifications and a lower than average proportion with higher level
qualifications.
Until relatively recently, economic development initiatives in Barnsley have largely focussed
on regeneration and managing the effects of industrial decline. Barnsley attracted significant
national and European regeneration funding and developments were largely public-sector
145
led and financed, with subsidies designed to attract new businesses to the area .
Policies related to “Thinking small in a big way” (Urban Centre Integrated Development Plan,
2000) are evident from the early 2000s. In 2001, Barnsley was part of the Renaissance
Towns Initiative, resulting in the Remaking Barnsley programme. This represented a change
of direction in policy making, from simply trying to manage industrial decline to a more
strategic approach looking at how the economy could develop. Central to the Remaking
Barnsley initiative was a vision of Barnsley as a ‘Tuscan hill village’. Recognising that
Barnsley lacked the size, infrastructure, population and industrial legacy to compete with
cities like Cambridge or Leeds, the Remaking Barnsley plan instead envisaged the
145
Barnsley Metropolitan Borough Council (2007) The Growth Plan for Barnsley’s Economy
Cities, growth and poverty: case studies
61
st
development of Barnsley as a 21 century market town, but one that was ‘uniquely
Barnsley’.
“The 7.7m consumers need bread and cakes, new windows, want
conservatories and patios, and like to go somewhere different for a day. […]
Barnsley is central, but need not position itself as wanting to be the centre.
146
Instead it is a centre, of a different kind, not like everywhere else”
Led by Barnsley Council and the ONE Barnsley Local Strategic Partnership, local economic
development initiatives have generally been focussed on the town centre. This was seen as
the quickest and most effective way of generating significant and accessible impacts, as well
as ensuring that policy making did not fall into the trap of making ‘everywhere and nowhere’
147
a priority . Public sector initiatives were designed to act as catalysts for more private sector
investment in the area, and developments such as the Queens Court office development,
the mixed-development Gateway Plaza and the growth of the Capitol Park and Dodworth
business parks (initially funded by Objective One European Union funding) indicate that
these policies have achieved some success. Projects including the £125 million Marketplace
Barnsley project aim to develop the centre of Barnsley further by improving the retail and
leisure sectors, and the Sites and Places Development Plan and the Barnsley Town Centre
Area Action Plan reiterate this focus.
In examining the economic development of Barnsley, it is important to note that Barnsley is
strongly integrated into a wider regional system and potentially benefits from initiatives
aimed at both the Sheffield and Leeds City Regions. Examples of this include development
of plots in the Ashroyd and Shortworth business parks as part of the Sheffield City Region
Enterprise Zone and integration into the Sheffield City Region Transport Strategy (20112026)
148
. However, Barnsley faces key challenges in ensuring that it is not marginalised.
“Being frank and realistic, Barnsley is not the place, nor the economy, to be able
to be a major player in some of these industries. Nor can everywhere in each
city region be the centre of leading edge excellence in all of these sectors. All
parts of each city region have their own distinctive contributions to the greater
149
whole”
Barnsley also seeks to benefit from the wider regional infrastructure and developments in
larger, more successful cities. Airports and universities in Sheffield, Leeds and Manchester
can attract people and businesses to the wider area, including Barnsley, not just the cities in
which they are based. If, as the Growth Plan for Barnsley’s Economy (2007) notes, the
146
Barnsley Metropolitan Borough Council (2007) ibid.
Barnsley Metropolitan Borough Council (2007) ibid.
148
Remaking Barnsley and Barnsley Metropolitan Borough Council (2012) Barnsley Local Development
Framework: Development Sites and Places Consultation Draft 2012.
http://edemocracy.barnsley.gov.uk/0xac16000b%200x00575873
149
Barnsley Metropolitan Borough Council (2007) ibid.
147
Cities, growth and poverty: case studies
62
economy of Barnsley is simply too small in relation to its population, this can be partly
150
ameliorated by people travelling out of Barnsley for work . New jobs, regardless of whether
they are located within Barnsley’s borders (or beyond), provide employment for Barnsley’s
151
population .
Ambitions for the growth of Barnsley’s economy have focussed firstly on catching up with
neighbouring areas, then on matching Yorkshire and the Humber averages. These may
seem modest targets, but they indicate how far Barnsley has to travel, and reflect the overall
emphasis on developing an economy that is the ‘right size’ for Barnsley.
A Core Strategy was developed in 2011, and an Economic Strategy (2012-2033) was
subsequently agreed, along with a five year Prioritised Economic Investment Plan. These
build on the Local Economic Assessment (2010), the Growth Plan for Barnsley’s Economy
(2007) and the Strategic Development Framework (2003). The Economic Strategy, while
recognising that both public and private sector investment is likely to be reduced in the short
to medium term, emphasises growing the local economy to be at least as big as the
Yorkshire and Humber average by 2033 through creating new jobs and tackling the barriers
152
to growth outlined above . Additionally, there are plans to grow the Visitor Economy of
Barnsley, capitalising on the natural landscape and cultural assets.
Growth of Barnsley’s economy has largely been public-sector driven, and the Economic
Strategy (2012) recognises that the private sector needs to be at the heart of the Borough’s
growth strategy. This is crucial because between 1999 and 2009, public sector employment
in Barnsley grew, but private sector employment declined at a greater rate, leaving Barnsley,
153
with a third of total employment in the public sector , vulnerable to public sector cuts. In
2010, Barnsley was ranked 311 out of 324 local authorities in terms of resilience to public
sector cuts
154
.
However, to date the potential for private sector-driven growth appears to have been
somewhat limited. Attracting and growing businesses in the private sector has proved
difficult, particularly because Barnsley lacks both business accommodation and the physical
space for large scale developments, and because of a lack of appropriate skills in the area.
Of the total land in the Metropolitan Borough of Barnsley, 77 per cent is designated Green
Belt. Unless Barnsley is able to develop on some of its Green Belt areas, it is unlikely to
155
meet the targets of its Economic Strategy as this limits the potential for the kind of big
landmark developments that are seen to grow confidence and attract other employers.
150
Barnsley Metropolitan Borough Council (2007) ibid.
th
Barnsley Metropolitan Borough Council (2013) Minutes of the Economy and Skills Scrutiny Commission 28
January 2013
152
Barnsley Metropolitan Council (2012) Growing Barnsley’s Economy (2012-2033) An Economic Strategy for the
Borough and the Proposed Five Year Economic Investment Plan
153
Beatty et al. (2011) ibid.
154
Experian resilience analysis for the BBC (2010) See http://www.bbc.co.uk/news/business-11233799
155
Barnsley Metropolitan Borough Council (2013) ibid.
151
Cities, growth and poverty: case studies
63
Despite this, Barnsley was successful in attracting the online retailer ASOS which opened a
156
large warehouse in 2011, and has plans for expansion . This primarily provides lowerskilled warehouse operative jobs. Additionally, EU funding has been used to develop office
space, something that was previously lacking in Barnsley due to its relatively
underdeveloped business service sector.
As well as facing problems attracting new businesses to the area, Barnsley has also faced
challenges in keeping the private sector business already situated there. Much of Barnsley’s
success in attracting and sustaining private sector employment has been based on being a
relatively low-cost area, with low wage levels and business rents, but off-shoring, particularly
by call-centres is an on-going concern.
Connectivity within Barnsley has also been judged to be poor in some areas and travel
157
within the borough and to neighbouring areas could be time-consuming and expensive .
Much transport planning takes place at the regional level, and although funding for major
transport improvements has fallen, Barnsley had received a share of South Yorkshire’s £30
million grant from the Local Sustainable Transport Fund (LSTF) and the ‘City Deal’ in
Sheffield had resulted in the establishment of a £500 million investment fund for priority
projects in the region.
There have also been successes in the implementation of a housing strategy and the
Barnsley Local Development Framework (LDF). The Core Strategy outlines plans for 17,500
new homes to be built in Barnsley by 2026, in addition to the 4000 already built in recent
years. It has also been recognised that Barnsley lacks low density, high value housing of the
type that attracts the higher paid and skilled people who may drive economic growth, and
there are aspirations for the development of 1200 low density homes across the borough. At
the other end of the spectrum, smaller, more deprived towns and villages, particularly those
in the Dearne Valley, have benefited from the Housing Markey Renewal funding programme.
Although this has ended, there remains a commitment for renewal in these areas.
3. Poverty alleviation in Barnsley
The Index of Multiple Deprivation ranks Barnsley as amongst the most deprived 15 per cent
of Local Authority Districts in England. Approximately one in four children live in poverty
while a further 21 per cent of families in Barnsley have been identified as being ‘on a
158
,
159
financial cliff edge’ due to their lack of financial resilience . Income levels are generally low
- a relatively high proportion of the population receives out-of-work benefits, and there is a
156
th
Logistics Manager (2013) ‘ASOS to expand Barnsley DC by 25 per cent’ 30 April 2013.
http://www.logisticsmanager.com/Articles/20408/ASOS+to+expand+Barnsley+DC+by+25+per+cent.html
157
Barnsley Metropolitan Borough Council (2013) ibid.
158
End Child Poverty (2012) ‘Child Poverty Map of the UK’
http://www.endchildpoverty.org.uk/files/childpovertymap2011.pdf
159
The Guardian (2012) ‘Breadline Britain’ http://www.guardian.co.uk/news/datablog/2012/jun/18/breadlinebritain-edge-poverty-at-risk
Cities, growth and poverty: case studies
64
prevalence of low-paid jobs.
In 2009, almost 1 in 5 working age adults in Barnsley were claiming out-of-work benefits
160
,
th
the 16 highest proportion in the UK. Youth unemployment is around 4 per cent higher than
161
the national average . Until the recession, these numbers were declining, but following the
national trend, numbers have risen since the recession. There is some variation across the
borough, with the highest proportions seen in the poorer Barnsley East and Mexborough
wards, and the lowest proportions in the more prosperous Barnsley West and Penistone
162
.
The impact on health of employment in mining is well established, but even today, Barnsley
163
has a higher than average proportion of its population receiving incapacity benefits (IB) .
164
This has been attributed, in part, to the relatively weak local labour market . In a stronger
labour market, a proportion of those receiving IB may, while having genuine claims, be
expected to be able to find some form of suitable employment, but in weaker labour markets,
they experience greater exclusion. Using 2009 data, Beatty et al. (2011) estimate that this
group of ‘hidden unemployed’ account for 6 per cent of Barnsley’s working age population
165
An Anti-Poverty Board was established in Barnsley in 2012. This aligned the work of the
Children and Family Poverty Strategic Group with the Financial Inclusion Group with the aim
of providing a strategic, joined-up approach to alleviating poverty in the city in line with the
objectives of the Economic Strategy, the Community Strategy and the Health and Wellbeing
166
Strategy
.
The Barnsley Anti-Poverty strategy focusses on three main routes to poverty alleviation:
1. Promoting employment, including increasing incomes and improving skills and
aspirations;
2. Fostering independence, particularly supporting residents to manage their income
more effectively;
3. Protecting the vulnerable and developing partnership working to provide appropriate
support.
An Anti-Poverty Pledge has been instituted that emphasises that ‘poverty is everyone’s
business’. This is backed-up by poverty needs assessments to develop an understanding of
160
Beatty et al. (2011) ibid.
Leeds City Region (2013) Skills Plan for the Leeds City Region Consultation Draft 2013-2015.
http://www.leedscityregion.gov.uk/our-work/skills/lcr-skills-plan-consultation-draft-april-2013.pdf/
162
ONE Barnsley (2013) ibid.
163
th
In 2006, 12.6 per cent of the working age population were claiming IB, the 16 highest proportion amongst
UK districts (The Alliance (2007) The other half of Britain: Problems and issues in the traditional industrial areas
of England, Scotland and Wales.
http://www.industrialcommunitiesalliance.org/uploads/2/6/2/0/2620193/the_other_half_of_britain.pdf
164
Beatty, C. and Fothergill, S. (2005) ‘The diversion from ‘unemployment’ to ‘sickness’ across British regions
and districts’, Regional Studies, Volume 39:837-854
165
Beatty et al. (2011) ibid
166
ONE Barnsley (2013) Barnsley Anti-Poverty Strategy 2013-2016: Making Poverty Everyone’s Business. Draft.
161
Cities, growth and poverty: case studies
65
.
the reality of poverty in Barnsley, poverty awareness-raising and ‘proofing’ which aims to
ensure the accessibility and appropriateness of services and inform the actions of partner,
including employers. The financial inclusion element of the poverty strategy focusses on
increasing access to affordable credit and banking, including the credit union, improving the
provision of advice services and developing individual financial capability.
4. Linking economic growth and poverty alleviation in Barnsley
“Prosperity and opportunity for all” is part of Barnsley’s Economic Strategy, but it is clear that
despite numerous initiatives disparities between those who benefit from economic growth
167
and those who do not persist . Policy-making relating to economic growth has been
developed alongside that relating to community development. It has focussed on two,
interlinked areas:
1. Getting unemployed people into work through growing the economy;
2. Raising skill levels and educational attainment so that the population is ready to fill
the jobs that become available.
The ‘Future Jobs Fund 2’ scheme set out in the Economic Strategy’s Five Year Investment
Plan aimed to improve access to private sector jobs through training, work experience and
168
job placements . The Future Jobs Fund has been used to help people into employment
and to improve basic literacy and numeracy and has resulted in around 300 people moving
into employment
169
.
While much of the planning for economic growth has focussed on the town centre, outside
the town centre, area-based development initiatives have sought to tackle poverty in some of
the more marginalised areas that were most hit by the decline in coal mining. The Dearne
Valley area has been a particular target since the formation of the Dearne Valley Partnership
(DVP) and its success in winning City Challenge regeneration funds in 1991, later
supplemented by funding from the (then) Derelict Land Grant Scheme, the Single
170
Regeneration Budget and Objective 1 EU funding . A long-term integrated ‘Masterplan’ for
the town of Goldthorpe (which has experienced high levels of social exclusion) and the wider
Dearne area has been developed. A particularly innovative proposal is The Dearne Valley
Eco-Vision which outlines plans to transform the Dearne over the next 25-30 years into the
first Eco Park in the UK. This focusses on expansion of low carbon industries and attracting
green businesses, as well as ensuring the Dearne population are adequately trained and
skilled for employment in these businesses. This initiative has been led by the Sheffield City
167
Kumi-Ampofo, F. (2012) Leeds City Region: Labour Market Analysis. Regional Economic Intelligence Unit,
Leeds City Region LEP Employment and Skills Board. http://www.leedscityregion.gov.uk/LCRCorporate/media/Media/pdf/LCR-Labour-Market-Analysis-Report.pdf?ext=.pdf
168
Barnsley Metropolitan Borough Council (2013) ibid.
169
Beatty et al. (2011) estimate that to increase Barnsley’s employment rate to around the national average
requires moving an additional 8,100 people into work.
170
Yorkshire Forward and Yorkshire and Humber Assembly (2006) The Regional Economic Strategy for Yorkshire
& Humber 2006-2015
Cities, growth and poverty: case studies
66
Region, but forms part of the Barnsley Core Strategy.
Working with employers to increase skill levels to improve competitiveness is a feature of
policy-making, and the private sector-led Work and Skills Board, along with local colleges,
training providers and universities, is a key actor. However, some scepticism has been
171
expressed about demand-led skills training , perhaps reflecting the long-term impact of
policies to provide workers for the coal mining industry. There have been concerns that
demand-led approaches may lead to training to meet short-term needs and to develop skills
with a very specific purpose, rather than in the acquisition of qualifications that may ‘futureproof’ Barnsley’s residents against falls in demand by particular sectors or employers.
Policies to increase skills and employability amongst Barnsley’s residents have included the
Barnsley Skills and Jobs Pledge, the ONE Barnsley Sustainable Community Plan and the
Remaking Learning Initiative. To tackle deficiencies at the higher-skill level, Advanced
Learning Centres were opened in 2011 and 2012, and there are plans to expand higher
education provision, including foundation degrees. There have been definite improvements
in the skills and qualification levels of Barnsley’s population, but the challenge faced is
considerable: 15 per cent of Barnsley’s working age population lack even a basic Level 1
172
qualification which precludes them engaging in much of the skills training available; at the
other end of the scale, simply to match regional levels of qualifications in the workforce, the
number of people with a Level 4 qualification would need to increase by between a third and
half. However, although mismatches between supply and demand exist, the linking of
economic growth and poverty in Barnsley has been fundamentally hindered by a simple lack
173
of jobs .
171
Barnsley Metropolitan Borough Council (2007)
ONE Barnsley (2013) ibid.
173
Glyn Owen Associates (2004) ibid.
172
Cities, growth and poverty: case studies
67
9. Coventry Case Study
Lower than average GVA growth, growth in poverty
1. Introduction
The Coventry travel-to-work area (TTWA) is comprised of the local authorities of Coventry
and Nuneaton and Bedworth. Coventry plays an important role in a wider-city region
extending across Warwickshire and the south of Leicestershire.
Coventry is the eleventh largest city in the UK, with 318,600 residents
174
. The city of
Coventry grew through the early and mid-twentieth century, largely as a result of inmigration, but experienced rapid population decline associated with economic restructuring
during the 1980s. The city’s population size stabilised during the 1990s and is now beginning
to grow again, although there is evidence of relatively high levels of population churn.
Physical expansion of Coventry city is limited by the West Midlands and Warwickshire Green
Belts, although Coventry’s boundaries have been changed and extended several times,
most recently in 1994 to accommodate growth.
Two thirds of the people who work in Coventry also live in the city, and of employed
residents in Coventry, 76 per cent also work there. The majority of inward and outward
175
commuting is from neighbouring areas . In-commuting is somewhat lower than might be
expected for a city of Coventry’s size. Coventry is one of only six cities in the England where
average age of the population is decreasing
176
.
The story of Coventry’s recent history is largely of a city in transition. Historically, Coventry
has been extraordinarily dependent on a very small number of very large engineering and
related companies. In the mid-1950s, around two-thirds of all local jobs were in
177
manufacturing, and Coventry was the ‘Car City’, a city that ‘made things’ . The loss of key
employers such as British Leyland hit employment in the city hard, and there were mass
redundancies from the 1980s onwards. Since then, economic policies in the city have
focussed on restructuring the city’s economy away from its traditional dependence on
automotive manufacturing, in particular, and diversifying its economic base. In the past few
174
Centre for Cities (2013) Cities Outlook 2013. http://www.citiesoutlook.org/summary/coventry
The Coventry Partnership (2009) Coventry, the Next 20 years The Coventry Sustainable Communities Strategy
176
Office of the Deputy Prime Minister (2006) State of the English Cities: Volume 1.
http://webarchive.nationalarchives.gov.uk/20070101092320/http://www.communities.gov.uk/documents/citie
sandregions/pdf/143999
177
The Coventry Partnership (2010) State of the City: Coventry in 2010
175
Cities, growth and poverty: case studies
68
years, the city’s historical strength in engineering and technology has been revisited with
attempts to grow this sector again, focussing more on high productivity, high value
manufacturing, in contrast to the more low skilled, high employment work of the past.
Today, only around 14 per cent of employment is in manufacturing, and the majority of jobs
are in the service sector, including public administration, education and health, and in
business and financial services.
Drivers of growth
Economic growth in Coventry has been driven by a number of factors:
 Central location and good transport links;
 Two universities;
 A long-standing reputation in design, manufacturing and engineering, including some
high-level work in these areas;
 An investment and business friendly public sector.
However, economic growth has also been limited by factors including:
 Lack of growing businesses;
 Under-exploitation of innovation potential;
 Weak clustering effects and instances of negative clustering stemming from historical
path-dependencies;
 Poor internal transport links;
 Lack of higher level skills;
 Slow growth of high value, knowledge intensive industries.
Key features of the economy
The economy of Coventry has undergone rapid change. From being dependent on
traditional manufacturing, particularly the automotive industry, with a small number of
employers accounting for a large share of employment, the economy has diversified. Sectors
such as Business Services, Education, Health, Distribution and Public Administration have
grown. However, this has resulted in the city having a large share of employment in the
public sector, with approximately one third of employment in Coventry being in Public
178
Administration, Health and Education . This has made it vulnerable to on-going public
sector cuts. In the past few years, a new economic strategy has emerged which attempts to
foster economic growth through the development of particular key sectors, and niches within
these sectors, which build upon Coventry’s traditional strengths in manufacturing,
engineering and technology.
178
Corporate Research (2013) The Coventry Economy: Key Information
Cities, growth and poverty: case studies
69
A key concern in the city and wider region has been the growth of these key sectors. Over
the past ten years, the economy, and particularly productivity, has been growing at a slower
rate than the national average, and there have been slower rates of business and
employment growth. This is largely attributable to the restructuring of the economy away
from its dependence on large manufacturing companies. However, it is also the case that
low-value, low productivity businesses predominate and there is a lack high-value, highgrowth knowledge intensive businesses in the area. Between 1998 and 2008, employment in
knowledge-intensive businesses in Coventry grew by only 2.3 per cent, compared to an
179
England average of 18.2 per cent .
Coventry also performs relatively poorly in terms of business start-ups and the productivity of
those businesses. In the four year period 2008 to 2011, in only one year, 2011, did the
180
number of business start-ups exceed the number of closures . The Sub-Regional
Economic Strategy also notes a marked lack of aspiration to start businesses in parts of
181
Coventry
.
Key questions faced by the city in determining its economic growth and poverty alleviation
strategies focus on how a city may re-orientate its economy and labour market away from a
dependence on declining sectors and how the impact on residents of what is an inevitably
drawn-out process of restructuring can be managed.
2. Economic growth and development in Coventry
Local policy-making in relation to economic growth has several central tenets: there is a
need for proactivity on the part of local actors in guiding development; targeted interventions
can play a crucial role in growing confidence; joined-up thinking linking economic growth and
spatial planning is necessary; and growing resilience is key.
After the decline of manufacturing in the city, Coventry aligned much of its economic policy
making with the free-market policies of the central government throughout the 1980s and
1990s, and there is evidence of this approach today. Attracting new business to the area by
creating the conditions necessary for the private sector to flourish while removing barriers
that may stifle growth is mentioned in the Coventry Jobs Strategy and is identified as being a
key role of local authorities
182
.
Key local actors
Key local actors in economic development in Coventry include Coventry City Council, the
179
Coventry City Council and Warwickshire County Council (2011) Coventry and Warwickshire Economic
Assessment
180
Corporate Research (2013) The Coventry Economy: Key Information
181
Coventry, Solihull and Warwickshire Partnership (2009) Sub-Regional Economic Strategy: Coventry, Solihull
and Warwickshire
182
Coventry City Council (2013) A Jobs Strategy for Coventry 2011-2014
Cities, growth and poverty: case studies
70
Coventry and Warwickshire Local Enterprise Partnership (CWLEP), the Chamber of
Commerce and the Universities of Coventry and Warwick. Additionally, economic
development policy is clearly influenced by the policies of surrounding areas, particularly
Warwick and Birmingham and the Greater West Midlands. In a sub-regional context,
Coventry is important due to its size, but the north of the Coventry and Warwickshire subregion, which includes Coventry and Nuneaton and Bedworth is notably poorer performing
economically and has higher levels of poverty. Consequently, working more closely with the
south of the sub-region (focused on Warwick and Stratford-upon Avon districts) is regarded
as an important priority.
CWLEP was one of the first LEPs in England to be approved. By bringing together the public
and private sector, CWLEP has taken a strategic overview of supply and demand factors in
the region and works alongside Coventry City Council to align priorities. A key player on
CWLEP is Jaguar Landrover (JLR), and JLR has been a key actor in identifying supply and
demand mismatches in skills and driving forward an agenda to tackle them.
In 2002, the Coventry, Solihull and Warwickshire Partnership (CSWP) published an
economic regeneration strategy for the local region: An Engine for Growth. Since the
publication of this strategy, manufacturing employment in the sub-region has fallen by
183
21,355 . Despite this, many of the priorities and concerns highlighted in the Engine for
Growth regeneration strategy are evident today, and current policy-making, including the
Sub-Regional Economic Strategy, builds upon this, together with the Sub-National Review of
Economic Development and Regeneration. The key concerns of CSWP have been to create
the conditions for growth, develop and diversify the business base of the region, regenerate
communities and promote learning and skills development. The CSWP has been a key
driver of the integration of economic priorities with spatial policy and promoting a greater
understanding of the spatial impact of economic interventions. A Single Integrated SubRegional Strategy (SISRS) has been developed to bring together policy-making related to
economic development and spatial planning, including strategies related to transport and
infrastructure.
At the regional level, the West Midlands Shadow Joint Strategy and Investment Board in
2009 presented Regional Funding Advice plans to the National Government which identified
20 Impact Investment Locations (IIL). These IIL are strategic locations where economic
growth may be created through the targeted provision and alignment of public resources and
integration of spatial strategies related to transport, housing and the economy. Two IILs were
in the Coventry TTWA: the Camp Hill Regeneration Project in Nuneaton and the
regeneration programme in Coventry City Centre and the North of Coventry. Similarly, at the
city and regional level, aspirations existed to use the drivers provided by national policies
and reviews, including the Sub-National Review of Economic Development and
Regeneration (2007) and the National Regeneration Framework for England (2008 and
183
Coventry, Solihull and Warwickshire Partnership (2009) Sub-Regional Economic Strategy: Coventry, Solihull
and Warwickshire.
Cities, growth and poverty: case studies
71
2009) to promote the role of city and regional-level actors in economic development.
The Local Strategic Partnership (also known as the Coventry Partnership) delivered Local
Area Agreement and a similar Multi Area Agreement was reached to enable closer
partnership working across the sub-region of Coventry and Warwickshire.
Local initiatives promoting economic growth
Since the mid-1980s, reinventing Coventry as ‘a modern city with a modernising economy’
has been a key concern for local economic development. The Coventry Jobs Strategy
(2011) refers to the concept of a Future City - focusing on innovation, flexibility and
integration as key facets of the city they envisage Coventry becoming. Local interventions
have included:
 Using planning powers and land holdings to create new business sites and to manage
redevelopment with a view to creating employment;
 Offering direct, specific support to new and growing business and working in
partnership with government-funded training and enterprise services;
 Forging stronger links with the city’s two universities;
 Developing the infrastructure of the city, including bidding for national and EU regional
aid and regeneration funding with the specific aim of improving transport links within
the city;
 Working more effectively with local agencies to improve the skills base of the city’s
residents;
 Promoting the image of Coventry to attract new investment
184
.
It has been recognised that continuing the diversification of the economy away from
manufacturing is necessary, but that Coventry’s traditional strength in engineering and
technology may be used to its advantage in developing the key advanced manufacturing
sector. The wider Coventry and Warwickshire sub-region has been successful in attracting
investment funds through the European Regional Development Fund (ERDF) funded
Business Growth Package and the Advanced Manufacturing Supply Chain Initiative.
A strategy of identifying a limited number of key growth sectors has been developed. Key
growth sectors include transport technologies, with a particular emphasis on low-carbon
technologies; innovative technologies; advanced manufacturing; and digital technologies,
184
Coventry City Council (2008) Innovative Coventry: A Strategy for Growth and Transformation. The Economic
Development Strategy 2008-2013
Cities, growth and poverty: case studies
72
including forging links with the creative sector in areas such as Serious Gaming
185
.
Urban regeneration
Urban regeneration and the integration of economic growth policies with spatial planning
have primarily been led by the public sector. Coventry City Council has played a leading role
in promoting and managing urban regeneration in the city. A £1 billion, 15 year programme
of redevelopment in the city centre, including developments linking the shopping precinct
with the railway station has started. Redevelopment of the city centre has been seen by
policy makers as key to improving the retail sector in the area (which underperforms relative
to cities of a similar size) and attracting further office development.
Coventry City Council has taken a key role not just in driving policies forward, but also in
acting as a key employer. For example, it is proposed that the offices of the City Council,
currently in the city centre, are relocated to the railway station area to act as a catalyst to
improve the area and attract other (private sector) organisations, as well as freeing up
significant space in the city centre itself for potential new businesses or expansion of the city
centre-based Coventry University. The city council has also worked closely with developers
and using Local Labour Agreements to encourage employment of local people in
regeneration projects.
Other strategic investments in the city are, or will, focus on increasing market confidence in
the poorer performing north of Coventry. This area has been designated a ‘Regeneration
Zone’ and funding in this area has focussed on the creation of ‘landmark projects’ including
the development of the Ricoh Arena and Pro-Logis Industrial Park, as well as providing proactive business assistance through the Strategic Business Support Package, and a
community-based physical regeneration programme in Camp Hill.
A key strategy in relation to urban regeneration has been to break cycles of ‘negative
186
clustering’ which are particularly evident in Coventry, Nuneaton and Bedworth . Areas with
high concentrations of low value industries are likely to attract similar business and employ a
similar workforce. While this sustains employment and a business base more generally, it
does little to promote diversification and may prove to be a disincentive for investment by
higher value businesses.
It is hoped that through this kind of strategic investment to attract businesses to more
deprived areas of the city, as well as the city centre development, will increase employment
185
Coventry Jobs Strategy & Coventry and Warwickshire Local Enterprise Partnership (2011) Coventry and
Warwickshire Five Year Strategy (2011-2016)
186
Coventry City Council and Warwickshire County Council (2011) Coventry and Warwickshire Economic
Assessment
Cities, growth and poverty: case studies
73
in the city by 50,000 to 75,000 by 2026
187
.
Transport
The central location of Coventry provides easy access to the road and rail network,
connecting Coventry to London and other parts of the UK. Its proximity to Birmingham
International Airport also provides good links to the rest of the UK and elsewhere. This has
made Coventry an attractive location for organisations moving out of London and it is also a
key hub for various distribution and delivery companies.
Congestion within the city of Coventry has been highlighted by businesses as problematic.
Additionally, connectivity along the North-South corridor, between the less well-off North of
Coventry, Nuneaton and Bedworth and the stronger-performing South of the region
188
(primarily Warwick and Stratford) have been seen to limit clustering effects . Funding
derived from the city’s New Growth Point status has been used to analyse current and future
demands on the transport infrastructure.
Housing
Coventry has been designated a National Growth Point, and is committed to providing 9,000
new homes by 2016. In the West Midlands Regional Spatial Strategy Phase 2 Revision EIP
Panel Report, the wider Coventry, Solihull and Warwickshire region had a target of 87,500
new homes in the next 20 years. This resulted in the production of the first Coventry, Solihull
and Warwickshire Housing Growth Strategy. The aim of this strategy was, firstly, simply to
achieve this ambitious target, but secondly to manage this growth to most benefit the subregion economically and socially through employment creation and spatial planning
measures.
Innovation and the knowledge economy
Below average diffusion and take-up of innovation has been identified in the Five Year Plan
as presenting a barrier to economic growth. Linking businesses with the universities in the
region is a key priority, and Business-University collaboration is promoted through the
development of the High-Technology Corridor. Retention of graduates in the region is also a
key strategic objective.
Enterprise and Business start-ups
The Enterprising Coventry Initiative aims to encourage the formation of new business in the
area, and there is some evidence that the Local Enterprise Growth Initiative (LEGI)
187
Coventry Partnership (2009) Coventry, the Next 20 years The Coventry Sustainable Communities Strategy
Coventry City Council and Warwickshire County Council (2011) Coventry and Warwickshire Economic
Assessment
188
Cities, growth and poverty: case studies
74
189
increased the numbers of VAT registered businesses in the city, and there are plans to
extend and develop the LEGI model to promote entrepreneurship. Attracting direct foreign
investment and the relocation of businesses into the city are key strategic objectives. Areas
identified as strengths to be built upon to attract inward investment into Coventry and the
wider region include:





Low Carbon Transport Technologies;
Intelligent Transport Systems (ITS);
Motorsport;
Serious Games;
Headquarters.
Evidence of the success of this focus includes the creation of the Serious Games Institute at
Coventry University, as well as developments across the sub-region, including the Power
Academy in Rugby.
3. Poverty alleviation in Coventry
Entrenched and sustained levels of worklessness, poverty and deprivation in particular parts
of Coventry, Nuneaton and Bedworth have been identified in the Five Year Plan as
contributing to lower than average economic growth. In 2007, the City of Coventry was
st
190
ranked the 61 most deprived Local Authority area . A particular concern is that these
areas are becoming slowly more deprived and that deprivation is becoming increasingly
191
concentrated in these areas . Worklessness rates in the ten worst performing areas have
not changed significantly over the past ten years, and there is some evidence that the most
economically deprived areas have actually become steadily worse over that period. Forty per
cent of the working age population claiming out of work benefits are concentrated in just
192
three areas of the city: Willenhall, Wood Green and Bell End . The highest levels of
worklessness are seen in the areas which are most associated with the manufacturing past
of the city.
Child poverty levels are also relatively high in Coventry. Of children aged under 16, 28 per
cent live in poverty and in some neighbourhoods over 70 per cent of children are living in
193
poor households. The Index of Child Well-being ranked Coventry as the 58th most
deprived local district in England.
189
Coventry Partnership (2009) Coventry, the Next 20 years The Coventry Sustainable Communities Strategy
SoC
191
Coventry and Warwickshire Local Enterprise Partnership (2011) Coventry and Warwickshire Five Year
Strategy (2011-2016)
192
Coventry City Council and Warwickshire County Council (2011) Coventry and Warwickshire Economic
Assessment
193
Coventry City Council and Warwickshire County Council (2011) Coventry and Warwickshire Economic
Assessment. This figure is likely to have increased further during the recession.
190
Cities, growth and poverty: case studies
75
Redundancies as key employers have left the city have resulted in relatively high levels of
worklessness and slower than anticipated net employment growth. This picture does appear
to be improving, and between 2010 and 2012, Coventry experienced one of the highest falls
in the number of people claiming out of work benefits. However, there is no evidence of a
similar increase in total employment amongst Coventry residents in the same period
194
.
The average annual wage of Coventry residents in 2009 was £23,506, 10.1 per cent lower
than the England average, and markedly lower than average earnings in Warwickshire
(£26,267, 2.2 per cent higher than the England Average). On measures of disposable
income, Coventry fares even worse, with an average disposable income 22 per cent lower
195
than the England Average. . There is some evidence that the income gap between
Coventry and the England average is closing, but the significant disparities between the
most and least affluent areas present a challenge. In 2007, residents of the poorest area of
Coventry earned under £14,639 per annum on average, while residents of the (small) most
affluent area had an average income of £78,575
196
.
Key features of poverty reduction strategies
The Coventry Sustainable Communities Strategy provides the clearest indication of the city’s
priorities in relation to poverty alleviation. Improving quality of life, raising aspirations and
narrowing the gap between the most affluent and most disadvantaged parts of Coventry are
key aims, along with ensuring that the benefits of economic growth are shared by all
Coventry people.
The Coventry City Strategy stresses the importance of ensuring that those who face the
biggest barriers to employment benefit from economic growth, and in particular that they can
access the jobs created.
Within Coventry City Council, the Equalities and Community Cohesion Theme Group has
monitored the activities of the Coventry Partnership to ensure that they maximise equality
and community cohesion.
Much of the work undertaken by local actors focuses on combatting worklessness The City
Council’s Employment Team has a specific focus on ensuring those who are most
vulnerable and face the greatest barriers to finding work are supported.
Transport and infrastructure
Although Coventry is well-linked with other parts of the UK, transport within the city and
194
Corporate Research (2013) The Coventry Economy: Key Information
Coventry City Council and Warwickshire County Council (2011) Coventry and Warwickshire Economic
Assessment
196
Coventry Partnership (2009) Coventry, the Next 20 years The Coventry Sustainable Communities Strategy
195
Cities, growth and poverty: case studies
76
connection of parts of Coventry and Nuneaton and Bedworth is less developed. A key
concern is the accessibility of jobs for residents of more deprived priority areas who are
without cars. The Coventry Partnership Household Survey showed that residents outside
Priority Neighbourhoods (see below) are twice as likely as those in Priority Neighbourhoods
to travel to work or take their children to school by car
197
.
Housing and urban regeneration
The Coventry Partnership has identified 31 Priority Neighbourhoods that are the most
disadvantaged and which are the target of particular support interventions with the aim of
these areas being the first to see improvements in quality of life as a result of economic
growth.
Many of the Priority Neighbourhoods are seen to be trapped in a spiral of decline. Lower
cost housing and high levels of social housing in these areas draws unemployed, lower paid
and lower skilled residents to these areas, promoting the clustering of workless households.
This makes it hard to attract employment opportunities and raise aspirations in these areas.
The Affordable Housing Supplementary Planning Guidance issued by the Council states that
in most cases, new developments should contain 25 per cent “affordable housing”, while
also seeking to create mixed housing developments aimed at inhibiting the clustering of the
most deprived residents of the city. Large scale regeneration programmes, including the
New Deal for Communities, have also sought to replace old housing stock and develop more
mixed communities.
The designation of Coventry as a National Growth Point has prompted a focus on the types
of housing that may be constructed in the area. As well as providing affordable housing,
there is a notably aspirational element to the Council’s plans with an emphasis on increasing
the supply of housing aimed at more affluent people to attract them to the area. While this
strategy may do little to decrease poverty in the worst affected areas, a larger affluent
population will decrease average poverty levels overall, and may act as a catalyst for
entrepreneurship and business start-ups and relocations.
4. Linking economic growth and poverty reduction in Coventry
Linking economic growth and poverty alleviation is an explicit strategy in Coventry,
particularly in relation to worklessness and distribution of the benefits of economic growth.
Policies and aspirations in this area envisage a type of circle or spiral of mutual benefit,
whereby a more affluent, well-skilled, employed (and employable) population attract and
contribute to economic development, giving the city a good image, drawing businesses to
the city and spending more in the city’s retail and leisure sector. This economic growth
197
Quoted in Coventry Partnership (2009) Coventry, the Next 20 years The Coventry Sustainable Communities
Strategy
Cities, growth and poverty: case studies
77
raises confidence and aspirations in the city, promoting further up-skilling and the movement
of people into jobs that are better paid and provide opportunities for progression. Hence the
linking of economic growth and poverty alleviation is driven not just by a moral concern for
the city’s residents, but also by an economic imperative.
Much of the policy making related to linking economic growth and poverty alleviation is
based upon ensuring that all residents of the city can benefit from economic growth. The
Coventry Jobs Strategy states:
“Assuming that a city can focus on growth, without consideration for how all its
people benefit from that growth will leave whole communities behind and risk an
increasing polarisation in our society between those who can benefit and those
who do not have the skills or ability to do so”
198
Similarly, the Coventry Economic Development Strategy
199
states,
“Transformational growth must, of course, be about changing lives for the better,
as a matter of principle. But it is also about making the most of all our human
resources. A growing city simply cannot afford to waste the energy and creativity
of its people by leaving them to languish in the margins of the labour market. A
growing city must be an inclusive city”
200
However, as noted above, it is clear that not all areas and residents have benefited equally,
and poverty in some areas is entrenched to the point that some of the most disadvantaged
areas have not only not seen any real improvements, in some cases, they have got worse.
Reflecting the emphasis on employment as a route out of poverty, key strategies linking
economic growth and poverty reduction focus on reducing mismatches between supply and
demand in relation to skills and providing access to employment for residents of priority
areas.
In 2011, Coventry Council produced a three-year Jobs Strategy in which the Council
envisaged taking a more proactive approach in the creation of new jobs and increasing
prosperity in the city. The Jobs Strategy has three fairly simple aims: to secure job
opportunities through investment; to help people get jobs; and to help people improve their
skills.
Skills
The Coventry City Strategy takes a ‘virtuous circle’ approach to linking economic growth with
198
Coventry Jobs Strategy (2013), ibid. p12
Coventry City Council (2008) Innovative Coventry: A Strategy for Growth and Transformation. The Economic
Development Strategy 2008-2013
200
Coventry City Council (2008) ibid. p3
199
Cities, growth and poverty: case studies
78
poverty alleviation when considering its skills strategy. People with appropriate skills will be
more likely to find employment. Having a large population with appropriate skills will attract
more employers to the area, creating employment which can be filled by the appropriately
skilled population. This will stimulate a greater willingness to develop skills on the part of the
residents of the city, increasing skill levels further.
A lack of skills has been consistently identified by policy-makers as a barrier to the growth of
Coventry. Relative to the rest of the Coventry and Warwickshire sub-region, the city of
Coventry and Nuneaton and Bedworth show both a marked lack of higher levels skills and a
larger proportion of the population with low skills. The Centre for Cities City Outlook (2013)
st
ranks the city of Coventry 61 out of 64 cities in terms of the proportion of its residents with
201
low skills .
Although economic growth policies in Coventry are increasingly focusing on building on the
tradition of automotive and other manufacturing in the city, focussing on high tech areas
demands different skills than the traditional skills possessed by the majority of workers who
were once employed in this sector. The Coventry Jobs Strategy expresses concern that the
high tech anticipated growth sectors will not be able to provide opportunities for the workless
population unless there is a robust programme of skills improvement. Research by CWLEP
has shown that the skills gap is greater in the manufacturing and construction sectors than in
retail, but also that the demand for skills was greater in these sectors, in part reflecting rapid
technological change
202
.
Raising aspiration is a key issue, particularly in relation to plans to create employment in
manufacturing and the associated engineering and the technology sectors. In a city scarred
by widespread, sustained redundancies from this sector, convincing young people that jobs
in this sector are secure and provide them with a future is difficult. The Coventry Jobs
Strategy notes that evidence from Jobcentre Plus shows that a significant proportion of job
seekers (as nationally) are seeking elementary level work in retail, administration and
warehouse and distribution work, but these were the sectors where competition for work was
greatest.
Coventry City Council has taken a key role in skills development, promoting the Jobs
Strategy (and associated ‘Overcoming Barriers to Learning’ and ‘Raising Participation Age’
strategies) and working with local businesses to understand demand priorities and working
with training providers to identify solutions. Initiatives developed by the Council have
included a Youth Employment Strategy based around linking education to employment. A
specific Youth Zone within the newly created flagship City Centre Job Shop provides
targeted support for young people. It has also instituted the construction shared
apprenticeship scheme, which aims to ensure that city residents are suitably qualified for
201
This is based on 2011 qualification data
Coventry and Warwickshire LEP (2011) Skills Research – Employer Demand for Skills in Coventry and
Warwickshire
202
Cities, growth and poverty: case studies
79
employment on the various redevelopment and regeneration projects funded across the city
and works with employers in manufacturing, engineering and technology to promote
apprenticeships. Despite this, take up of apprenticeships has been relatively low and the
schemes have struggled to attract high quality applicants.
Transport and infrastructure
Recognising the impact that poor connectivity has on some of the poorest parts of the city,
the Sub-Regional Economic Strategy had an explicit aim of improving the transport
infrastructure to provide access to jobs and training opportunities (the Travel to Learn
Initiative). They also note that in some cases, physical connectivity is not a problem, but that
the public transport infrastructure represents a barrier to workless people accessing jobs
with atypical working hours in sectors such as warehousing and distribution. Investments of
203
£42 million have been made to improve the bus network in the city and wider region .
Urban regeneration and housing
Concerns about the impact of ‘negative clustering’ are central to much of the policy-making
related to urban regeneration. This applies both to the clustering of businesses and to the
clustering of people. The Sub-Regional Economic Strategy notes the role that housing plays
in concentrating pockets of worklessness in particular areas, and proposes to use the
housing strategy to create more mixed communities to break the cycle of worklessness and
increase aspirations.
It remains somewhat unclear whether the success of Coventry in experiencing poverty
alleviation while also experiencing relatively low economic (particularly output) growth is
attributable to its focus on achieving employment (however low-skilled, low-paid and lowvalue) for its residents following a period of mass redundancies and how much it may be
attributed to more specific, targeted labour market interventions.
203
Coventry and Warwickshire Local Enterprise Partnership (2011) Coventry and Warwickshire Five Year
Strategy (2011-2016)
Cities, growth and poverty: case studies
80
10. Blackpool Case Study
Lower than average GVA growth, growth in poverty
1. Introduction
The functional area of Blackpool in north-west England encompasses the unitary authority of
Blackpool and the majority of the neighbouring local authority districts of Fylde and Wyre
(the area is sometimes known for economic development purposes as ‘the Fylde Coast’).
This area has the largest single concentration of seaside tourism jobs in England and
204
Wales. The area grew from Victorian times with the expansion of the ‘high volume, low
income’ travel market, but after the 1950s Blackpool faced increasing competition from
cheaper overseas travel and a diversification of the UK tourism market. Despite these
changes the visitor economy remains very important.
Key features of the Blackpool economy are:

A concentration of employment in the service sector (especially tourism and retail)
205
and an over-dependence on the public sector;

More pronounced seasonality than the national norm and associated transience in
the workforce;

Relatively low wages and low productivity.
206
In such a context, employment growth in tourism and retail could depress GVA. Blackpool is
207
characterised by a ‘low skills equilibrium’. The most significant concentration of higher
level skills is at the BAe complex at Warton.
Key challenges facing Blackpool are low overall productivity and pockets of severe
disadvantage, especially associated with private renting in inner urban areas. The nature of
the housing stock is closely entwined with the nature of the economy and demographic
characteristics. There is an oversupply of guesthouses in inner areas. As these become
unviable the easiest way for owners to maintain an income is to let the rooms to permanent
204
Beatty C., Fothergill S., Gore T. and Wilson I. (2010) The Seaside Tourism Industry in England and Wales:
Employment, Economic Output, Location and Trends, CRESR, Sheffield Hallam University.
205
Blackpool Council (2012) Blackpool Local Economic Action Plan.
206
Local Futures (2008) The State of Blackpool: An Economic, Social and Environmental Profile of Blackpool,
Local Futures Group, London; SQW Consulting (2010) Fylde Coast Employment & Skills Strategy.
207
Green A.E. (2012) ‘Skills for Competitiveness: Country Report for United Kingdom’, OECD Local Economic and
Employment Development (LEED) Working Papers, OECD Publishing, Paris.
Cities, growth and poverty: case studies
81
208
guests and then convert them to Houses of Multiple Occupation (HMOs), which often
attract a transient population and/or single people migrating into Blackpool attracted by
relative affordability of the housing stock and opportunities for seasonal employment. Social
problems associated with HMOs in turn impact on poverty.
Current and future welfare reforms will impact especially hard on Blackpool. It has been
estimated that Blackpool local authority stands to lose more than other local authorities from
welfare reform, with an average loss of £914 a year per adult, compared with a national
209
average of £470 . This is a function of a high proportion of adults on out-of-work benefits,
coupled with a high proportion of households claiming Housing Benefit living in the private
rented sector.
2. Economic growth and development in Blackpool
There is a history of the local authorities working together to promote economic
development, tourism, business support and inward investment: the Fylde Coast Multi Area
Agreement (MAA) was signed in 2009 and a new Blackpool, Fylde and Wyre Economic
Development Company came into existence in 2010, building on previous structures. The
210
Fylde Coast Employment and Skills Strategy associated with the MAA sought to work with
the existing structure of the economy (by promoting key sectors – hospitality, retail,
advanced manufacturing and energy) and by raising the employment and skills base. A bid
for the Fylde Coast to become a separate LEP failed, and the area is a minority part of the
211
wider Lancashire LEP. The LEP strategy focuses unequivocally on promoting growth . One
key policy driver is the Lancashire Enterprise Zone (this is a ‘split’ Enterprise Zone involving
BAe Warton [in the Fylde Coast area] with BAe Salmesbury [outside the area] to the east of
Preston).
A key feature of the economic development strategy pursued in Blackpool has been to
increase the value in the visitor economy (i.e. leisure and hospitality). This has involved
capital investment in new visitor attractions and supporting physical infrastructure (notably
212
the promenade and tramways). This involved the purchase for Blackpool Council of the
iconic Blackpool Tower (in partnership with private sector operator Merlin), and investment in
the Pleasure Beach and Winter Gardens, with an emphasis on branded attractions,
213
designed to drive up the quality of the visitor offer . The rationale has been to retain
numbers of visitors with the existing profile, and to attract more middle class visitors through
raising the quality of the Blackpool ‘offer’, so raising demand for skills.
208
The Fylde Coast Housing Strategy 2009 estimated that there were at least 3,000 HMOs in Blackpool.
Beatty C. and Fothergill S. (2013) Hitting the poorest places hardest: The local and regional impact of welfare
reform, CRESR, Sheffield Hallam University, Sheffield.
210
SQW (2010) op cit.
211
Lancashire Enterprise Partnership (2013) Lancashire Growth Plan 2013/14.
212
Funded by the North West Development Agency.
213
Blackpool Council (2012) Economic Strategy for the Fylde Coast.
209
Cities, growth and poverty: case studies
82
214
The Fylde Coast Housing Strategy 2009 recognises that housing plays a key role in
influencing local economic development. The strategic challenge is to arrest poor quality
conversions of guesthouse accommodation, which impacts on the remaining tourism
industry and so on the wider economy. This means that there is requirement for a more
varied and better quality private rented sector, as well as promotion of shared ownership,
provision of more family homes and increased owner occupation.
With funding from the Local Enterprise Growth Initiative (LEGI), investment was made in
customer service skills. For instance, the ‘Welcome to Blackpool’ initiative trained local
people, including those working in hospitality, leisure and tourism sectors, in appreciating the
history of Blackpool, current developments and future plans, in order to enhance residents’
and visitors’ experiences. Over 3,000 people and more than 250 organisations benefited
215
from this initiative . This is an example of an initiative linking both supply and demand sides
of the labour market.
Beyond the visitor economy, stakeholders aim to diversify the local economy to provide a
216
greater variety of skilled employment for local residents. Sectors with some local strengths
on which to build include chemicals, energy and environmental technology, marine, aviation
217
and aeronautics, food processing and business services and back office activities.
3. Poverty alleviation in Blackpool
Local stakeholders recognise the tension between alleviating poverty through addressing
worklessness and addressing issues of wealth creation. While the emphasis of the LEP is
unequivocally on the latter, in the Blackpool Local Economy Action Plan employment is
recognised as a key factor determining quality of life, reducing levels of deprivation,
inequality and improving health. This involves equipping local residents with skills to enter
work and working with employers to develop opportunities and pathways for people to move
into work. Blackpool Council was formerly active in delivering employability programmes
using area-based funding sources (including LEGI, the Working Neighbourhoods Fund and
218
the Future Jobs Fund) and advisers’ expertise is now being used in subcontracting
arrangements with Work Programme providers. Blackpool also has a Fairness Commission,
which builds on the work of the previous Local Strategic Partnership, bringing together
actors from the Council, the NHS, the police, the Young People’s Council and others, and
seeks to narrow the gap between the richest and poorest members of society and aspires to
214
http://www.blackpool.gov.uk/NR/rdonlyres/2E1FB82D-7B5D-49C2-80FF7CEEC855A48B/0/FyldeCoastHousingStrategyConsultationDraftFeb09.pdf
215
Green A.E. (2012) op cit.
216
Blackpool Local Economy Action Plan – Priority and Action Template 2012.
217
Blackpool Council (2012) op cit.
218
Currently Blackpool is eligible to apply for the Coastal Communities Fund, but at the time of writing bids to
this Fund have not been successful.
Cities, growth and poverty: case studies
83
make Blackpool a fairer place to live and work.
219
Key local drivers of poverty in Blackpool are a seasonal low pay economy with fluctuating
income levels and high unemployment, low skill levels, poor health outcomes, high rates of
teenage pregnancy and a poor housing stock. Blackpool Council’s Child Poverty
220
Framework indicates that the level of poverty is 29.5 per cent, compared with a national
average of 21.9 per cent. A multi-pronged approach to address poverty has involved a mix of
people- and place-focused interventions:

An apprenticeship programme targeted at young unemployed people;

A Community Budget Pilot focusing on issues associated with poverty such as
worklessness, substance misuse and parental mental ill health;

A Family Nurse Partnership offering intensive support to young first time mothers
throughout pregnancy and until the child reaches the age of two;

The South Beach Transience Pilot tackling structural issues underpinning transience
and looking to develop sustainable changes and improved outcomes for the
community; and

Tackling illegal money lenders in order to improve financial sustainability.
In other local developments Blackpool and Fylde College has worked in partnership with
Jobcentre Plus and local employers, in employer-led sector-based Work Academies to
enhance the employability of residents of deprived neighbourhoods (through providing tuition
in English and Maths, and through raising aspirations) to provide routes into work.
221
This
‘model’ of ‘bite-sized’ training involves input from the employer in course design (tailored to
requirements of the job in question), training (provided by specialists from the College) and
guaranteed interviews. The courses are run flexibly, at a learning centre at Blackpool
Football Club, located in the heart of the deprived neighbourhoods, so providing a more
approachable and amenable setting for many of the learners than the main college campus.
Using government funding for basic skills, the College has been successful in following
unemployed people into the workplace and delivering functional English and Maths on a
flexible basis at the workplace, in such a way as to provide minimal disruption to the
employer, but to have a more motivated and skilled workforce.
Another initiative linking those in receipt of out-of-work benefits to skill shortage occupations
is Blackpool Build Up,
222
a joint project involving Blackpool Council and Blackpool and Fylde
College which provides 10 weeks training and two weeks work experience with assistance to
219
http://blackpoolfairness.wordpress.com/the-board/
Blackpool Council (2012) Together on Poverty: Blackpool’s Child Poverty Framework, 2012-2015.
221
See http://www.blackpool.ac.uk/employability/raceforjobs and
http://www.blackpool.ac.uk/employability/pleasurebeach
222
http://www.blackpool.ac.uk/buildup/information-for-trainees
220
Cities, growth and poverty: case studies
84
find employment. Learners receive an industry-standard Construction Skills Certification
Scheme (CSCS) card. Since 2008 2,170 learned have gained full-time employment.
4. Linking economic growth and poverty alleviation in Blackpool
In inner parts of Blackpool and along much of the coastal strip where the combination of the
nature of a key part of the housing stock (poor quality private renting) and the local economic
structure (relatively low-paid seasonal employment) are conducive to in-migration of people
with relatively poor skills/ low incomes and transient lifestyles, local partners have
recognised the importance of addressing poverty as part of a strategy of promoting
economic growth.
Key features of local policy to promote economic growth and alleviate poverty are:
 Capital investment in the physical infrastructure (in partnership with the private sector)
to enhance value and raise demand for skills;
 An associated focus on aligning supply and demand for skills through working closely
with local stakeholders (Jobcentre Plus, local education providers and employers) to
provide flexible employer-led training to improve the supply of skills and provide routes
into work;
 Local area- and people-based multi-agency working to address poverty and
worklessness.
Cities, growth and poverty: case studies
85
11. Derry-Londonderry Case Study
1. Introduction
Derry-Londonderry is the second city of Northern Ireland (NI). It is a key regional centre and
employment location in the north-west of Ireland (also comprising the neighbouring areas of
Limavady, Strabane and Donegal), but historically has been seen to lag behind the more
prosperous parts of NI further to the east – notably the Belfast metropolitan area. It is the
largest UK city with a mainland border with the Eurozone and so is placed to benefit (or lose)
from exchange rate changes and cross-border flows from the Republic of Ireland.
The population of the Derry City Council area is 110,000,
223
of whom almost 40 per cent are
under 25 years old; the population of the hinterland is 330,000. Demographically the city has
a high birth rate, and high net out migration. The resident population is to a large degree
segregated on religious grounds, with in one-third of wards the population being 90 per cent
224
Catholic or 90 per cent Protestant. There are potential issues with low labour mobility, with
residents tending to work east or west of the River Foyle in accordance with their place of
residence. This adds to the complexity of formulating an inclusive plan for economic
development and poverty alleviation for the city.
Key features of the economic structure of the city are:
225
 Annual GVA economic growth lagging behind the NI average;
 A low employment rate – in 2008 the employment rate for the Derry City Council area
was 59 per cent, compared with 70 per cent for NI;
 The importance of public sector employment – with nearly 40 per cent of employee
jobs in public administration, health and social work and education sectors in 2008
(with more employed indirectly);
 18 per cent of employee jobs in retail and distribution – reflecting the city’s central
place role in the north-west of Ireland and cross-border trade;
223
http://www.derrycity.gov.uk/DerryCitySite/files/c2/c21e5033-dd0b-4ced-a3ec-79eb54682d60.pdf
For further information on segregation see Shirlow P., Graham B., McMullan A., Murtagh B., Robin son G.
and Southern N. (2005) Population Change and Social Inclusion Study Derry/Londonderry 2005.
http://www.ofmdfmni.gov.uk/derryreport.pdf
225
Oxford Economics (2010) Context and baseline report: Derry-Londonderry – today and tomorrow.
224
Cities, growth and poverty: case studies
86
 Out-migration of more educated young people - compared with Belfast, DerryLondonderry school leavers are more likely to move to education institutions
elsewhere and nearly a third attend higher education in Great Britain.
Associated challenges facing Derry-Londonderry are raising levels of participation in
employment, rebalancing the economy away from over-dependence on the public sector
towards an underdeveloped private sector, and stemming out-migration of better educated
young people.
2. Economic growth and development in Derry-Londonderry
NI has considerable administrative autonomy within the UK. A large majority of development
resources and decision making powers lie with the NI Executive; there is a relative lack of
powers and authority for local government in NI. Historically the public sector has led
investment in the city through the NI Executive, the UK government and the EU.
226
This
means that investment can come in fragmented pots and silos that are difficult to aggregate
and integrate locally.
Derry City Council has identified target sectors for economic development:
 The digital economy;
 Healthcare and life sciences – being developed in partnership with the Western Health
& Social Care Trust and the University of Ulster;
 Renewable and sustainable development;
 Creative industries.
227
The award in 2010 to Derry-Londonderry City of the inaugural UK City of Culture designation
for 2013 has provided additional impetus for further development of cultural industries which
had been identified already as a sector to create new jobs in the city and NI more generally.
For example, in 2008 the Playhouse (a leading Arts Centre in Northern Ireland) was
refurbished, with spaces for artists and creative businesses. Since opening the spaces have
228
sustained or created 20 full-time jobs and supported more than 20 freelance jobs. Through
a series of key events in 2013 and a year-long programme of cultural activities, the aim has
been to use this opportunity to act as a catalyst to build the economy. It offers an opportunity
for making the city a key destination for tourism, arts and culture to showcase physical
renaissance projects.
226
Derry-Londonderry has a range of EU funding programmes on which it has drawn over the period from 2007
to 2013. These include the Northern Ireland Competitiveness and Employment Programme (managed by the
Department of Trade, Enterprise and Investment), the European Social Fund Programme (managed by the
Department for Employment and Learning), the PEACE III programme (following on from earlier PEACE
programme which aims to support projects that bring communities together), the INTERREG IVA, IVB and IVC
programmes which focus on cross-border issues and the International Fund for Ireland.
227
The city is 100% superfast broadband enabled.
228
Funding was through the EU PEACE programme, along with the International Fund for Ireland and the Arts
Council of Northern Ireland.
Cities, growth and poverty: case studies
87
On the supply side, the U4D group, established by leaders of the business and community
sectors in the north-west of Ireland aims to substantially expand the provision of
undergraduate and postgraduate education in the city. The rationale is that increased
university education would raise skill levels, increase employment, attract higher levels of
inward investment and improve business prospects.
3. Poverty alleviation in Derry-Londonderry
Given the history of communal division in NI there has been an emphasis on implementing
policies with a strong demand-side emphasis at a local scale through the location of jobs
229
created by inward investment in or near concentrations of joblessness, so they can be
safely accessed without crossing communal divisions. The NI Department for Employment
and Learning (DEL) and the NI Industrial Development Board (responsible for inward
230
investment) have been leading players. The NI Targeting Social Need (TSN) strategy,
introduced in 1991, and its 1998 successor New TSN, were concerned with combating the
problems of unemployment, increasing employability and addressing the causes of social
exclusion. New TSN was not a programme with a dedicated budget, but rather a general
approach to programme development and delivery involving all NI departments, and skewing
effort and resources towards those with greatest need. It had three core elements: (1) a
focus on unemployment and employability; (2) tackling social need in other policy areas; and
(3) promoting social inclusion. TSN and New TSN evolved into the current NI Anti-Poverty
231
Strategy (overseen by the Central Anti-Poverty Unit ) are important elements by which
geographically targeted employment policies have been introduced in NI encouraging the
location of jobs in or near areas of social need. Officially, these policies are shaped by
‘objective’ social need but at some (often unspoken) level they are also about conflict
management in a divided society.
Social clauses have been used in Derry-Londonderry to make requirements within contracts
or the procurement process to provide added social value through fulfilling a particular social
aim. They are used particularly in the construction to provide employment and training
requirements for particular workers. Derry City Council has facilitated a Social Clause Forum
232
to provide support in this process, by helping companies find participants, etc.
Of particular relevance to policies of alleviating poverty and boosting economic growth,
Derry-Londonderry is the subject of a single regeneration plan. The rationale for a single
regeneration plan was that initiatives were ‘vertical’ (as opposed to ‘horizontal’) and were
uncoordinated, so leading to a lack of integration in effort in a context of high deprivation and
restricted life opportunities. Hence a single vision and plan was developed, led by urban
229
Osborne R. (1996) Policy dilemmas in Belfast, Journal of Social Policy 25, 181–199.
Shuttleworth I. and Green A. (2009) ‘Spatial Mobility, Workers and Jobs: Perspectives from the Northern
Ireland Experience’, Regional Studies 43, 1105–1115.
231
http://www.ofmdfmni.gov.uk/central-anti-poverty-unit
232
RSM McClure Watters (undated) Social Clauses in Northern Ireland: a research paper, Centre for Economic
Empowerment and NICVA, Northern Ireland.
230
Cities, growth and poverty: case studies
88
regeneration company Ilex, involving an integrated process and a participative approach.
233
The Regeneration Plan for Derry~Londonderry – One City One Plan One Voice
(known
as the ‘One Plan’) was launched in 2011 (summarised in diagrammatic form overleaf).
The One Plan has five transformational themes – Employment & Economy, Education &
Skills, Building Better Communities, Health & Well-being, and a Sustainable & Connected
City Region. Under these themes are 11 catalyst programmes, which have been devised as
a set of interconnected projects designed to re-orientate the city towards a new trajectory of
inclusive and transformative economic growth.
Figure 1: The Regeneration Plan for Derry-Londonderry – One City One Plan One
Voice
(Source: Ilex (2011) ibid.)
233
Ilex (2011) Regeneration Plan for Derry-Londonderry: One City. One Plan. One Voice, Ilex, Derry-Londonderry.
http://www.ilex-urc.com/ILEX/files/53/53f1dd51-3e96-45c1-9a89-96c82016fee1.pdf
Cities, growth and poverty: case studies
89
The ONE plan has been embedded in the NI Programme for Government and Economic
Strategy, with significant funding (more than £400 million) procured. Looking ahead the
challenges for Derry-Londonderry are the protracted economic slowdown, and maintaining
234
focus, buy-in and momentum (particularly after 2013).
The One Plan and the City of Culture designation offer opportunities for securing short- and
long-term gains for Derry-Londonderry. One example from the shorter-term is the Kickstart
to Work Employment Programme focuses on residents of the Derry City Council area who
are not in education, training or employment. As well as offering job brokering and
intermediary labour market programmes, it has also sought to prepare residents for new
employment opportunities: the HARTE (Hospitality, Retail and Tourism Training for
Employment) initiative involved tailored training and a guaranteed interview with a local
hotel.
4. Linking economic growth and poverty alleviation in Derry-Londonderry
Key features of the Derry-Londonderry experience are:

The reliance on government and EU funding for promoting economic development
and alleviating poverty – which are declining;

Making a central focus of the single regeneration plan the inextricable link between
economic growth and poverty; and

Use of the regeneration plan as a vehicle for funding (showing partnership working,
commitment and strategic approach).
234
McCleave G. (2013) ‘Enabling growth and investment’, Presentation to OECD LEED Workshop,
http://www.slideshare.net/OECDLEED/gerard-mc-cleave-enabling-growth-and-investment
Cities, growth and poverty: case studies
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