Gap between rich and poor cities to widen

Jan Harris | January 23, 2012 | 0 Comments

The economic gap between cities doing relatively well during the economic downturn and those that have been hard hit by the recession, is expected to widen.

A report by the Centre for Cities, a research and policy organisation focused on improving the economic performance of UK cities, suggests that a combination of weak growth in the private sector and massive public sector job cuts is affecting different parts of the country very differently.

Cities such as Aberdeen, Cambridge, Edinburgh, London and Milton Keynes are expected to weather the downturn well, while Newport, Sunderland, Hull, Doncaster and Swansea are among the worst affected cities.

Many of the struggling cities are located in the north of England and the Midlands.

Employment is a key factor in determining how well cities are performing, with those with a high percentage of their population employed in professions such as law, finance and accountancy doing much better than those where the private sector is less dynamic.

Cities such as Aberdeen and Cambridge have a high number of business start-ups and tend to be more innovative, while the poorer performing cities have proportionally more people claiming Jobseekers Allowance and working in the public sector.

The Centre for Cities is calling on the government to support struggling cities by providing high-quality training so that their residents have the skills they need to find jobs and start businesses.

Alexandra Jones, Chief Executive of Centre for Cities, said: “During 2012 cities should take the lead in shaping their local economies, and the Government should give them the financial and political powers they need to make the right decisions for growth.

“Where cities face greater social and economic challenges, the government should offer support to help places adapt and respond to a rapidly changing global economy.”

Pessimism over the UK economy persists with the latest figures expected to show that the economy contracted in the fourth-quarter.

The Bank of England is expected to announce a further round of Quantitative Easing as early as next month.

Tags: Centre for Cities, Economy News, quantitative easing, recession, unemployment