Coventry and Warwickshire Local Enterprise Partnership: Economic and Business Intelligence Working Brief 9

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1 Coventry and Warwickshire Local Enterprise Partnership: Economic and Business Intelligence Working Brief 9 Good Growth Through Cities December 2014 Introduction In November 2014 PricewaterhouseCoopers (PwC) released a report called Good Growth for Cities which provides the findings of an analysis which examines changes to the Good Growth Index for 39 cities in the UK between 2005 and The report, which analyses the change to index scores attributed to cities in the pre-crisis period of and recovery period , provides an overview of local economic performance across the UK. This working brief provides a short summary of the report, highlighting the position of, and key messages for Coventry and Warwickshire LEP. The Index Successful growth is not just about GDP or GVA, but broader measures of economic wellbeing including jobs, income, health, skills, work-life balance, affordable housing, transport and the environment.. (PwC, 2014: 34). This index 1 which has been calculated for 39 cities in the UK has been created in order to try and provide a more holistic measure of economic development that includes more than just measures of GVA, to consider wider factors that can affect economic success including employment, health, income and skills. The 2014 edition of the report extends the analysis from previous years to look at change over time, particularly focusing on two key periods: pre-crisis and recovery For the recovery period: Highest ranking cities: Reading; Aberdeen; Edinburgh; Oxford; and Cambridge. 1 The Index score cities between 0 and 1. 1

2 Lowest ranking cities: Middlesbrough & Stockton; Wakefield & Castleford; Sunderland; London (Boroughs only); Bradford. The highest ranking cities tended to perform well on jobs, income and skills but not as well on housing affordability. For most of the cities included in the index, the overall scores had not yet reached the pre-crisis levels, often a result of unemployment levels. The greatest rises in score between the two time periods were in Belfast, Cambridge, Edinburgh, Aberdeen and Liverpool, and the largest falls were experienced in Hull and Bradford. The report suggests that there appears to be no systematic relationship between a city s score in and the changes it experienced. Those considered strong performers did not make great gains, and relatively weak performers did not necessarily fall further back. This reinforces the idea that each city has its own complex arrangement of factors that will determine its prospects for economic growth. In terms of change in index score from pre-crisis to recovery Coventry ranks 14 th with less than 0.05 fall in index score, performing better than Nottingham, Stoke-on-Trent and Leicester, as shown in Figure 2 below.. To put this in perspective, Birmingham had the fourth largest fall of 0.3 index score (largely attributed to rises in unemployment). In the recovery period Coventry Ranks 9 th out of 39 cities with a growth index score of 0.3. Figure 2: Total Change in Index Score Source: Adapted from PwC (2014: 14) 2

3 The success of a place depends on the effects of long lasting structural factors including its brand identity. (PwC, 2014:23). The technique used to measure impact used by the authors (TIMM Total Impact Measure Management) attempts to consider ways for cities to measure their impacts in ways more than purely financial. It is argued that a place-based dashboard can be made-up of a range of indicators (shown in Figure 1) which in turn could aid local policy makers and managers with measuring and monitoring progress. This means over time different circumstances could be analysed in different cities in order to identify specific factors which are important for local growth. Figure 1: Place-based Total Impact Measure Management Source: PwC (2014:5). Local Economic development and policy is ultimately about choices and priorities where to take action and invest scarce resources to promote growth. This Good Growth for cities index provides a framework for allocating resources and investment driving decisions based on what people want. (PwC, 2014: 9) The Good Growth for cities index presented in this report takes into account in particular: Secure jobs; Adequate income levels; Good health; Time with family/work-life balance; Affordable housing; 3

4 Sectoral balance of the economy (eg size of manufacturing sector); Affordable and good quality transport systems; Potential to be in employment and earn a living; Protection for the environment (carbon emission reduction, preserving forests) Fair distribution of income. The website which accompanies the report allows you to compare cities and indicators included in the index. Figure 3 below compares Coventry with Leicester and Birmingham where green represents an above average score, amber an average score, and red a below average score. Figure 3: Good Growth City Index Comparison Source: PwC (2014) The report highlights that while there has been recovery since the recession for many cities in many areas, there are other factors which affect economic growth which have not improved. This is clear even with a simple comparison of Coventry, Leicester and Birmingham, with each city exhibiting a different mosaic of indicator strength. A distribution map of average scores for cities by LEP is also included using the average scores from 2012 and Coventry and Warwickshire LEP displays an above average score (>0.5 above) among the other LEPs. It is made clear that in order to address issues of economic growth it is important to look at specific strengths and weaknesses of cities rather than being either complacent about continued success or resigned to continued relative underperformance. (PwC, 2014: 21). It is argued that a number of issues need to be addressed when considering economic growth for cities: Greater connections between businesses and education are needed, and better provision to match people to jobs. Delivering effective, efficient and sustainable urban infrastructure is essential. Building the right type of houses in the right places. Cities need a vision for growth and economic prosperity, underpinned by strategic objectives, and this vision must be owned by key stakeholders politicians locally and nationally, officials, businesses and residents. Broadband and mobile technology should be recognised as core parts of a city s infrastructure. Better collaboration across public and private sectors is needed to ensure plans for growth are delivered. A recognition that there are many important stakeholders 4

5 To deliver a shared vision for a place and a plan to make things happen because there are often many stakeholders and each need clearly defined roles. Summary and Key Messages for Coventry and Warwickshire LEP The Good Growth City Index aims to provide a broader picture of what can indicate economic growth, beyond indicators such as GVA. Coventry ranks 9 th in cities included in the Good Growth City Index above other cities in the West Midlands for the recovery time period. Coventry scores well in areas of health, income distribution, transport and owner occupation. Coventry has experienced positive growth in index scores since the pre-financial crisis time period of , although it has yet to return to its pre-crisis score, likely to be a result of unemployment patterns. The place-based Total Impact Measure Management Model (TIMM) discussed in this report presents a way of thinking about economic impact beyond the financial, considering the different facets of society that can impact economic growth. The report highlights that there are a wider range of factors that should be considered when developing plans for economic growth. References PwC (2014) Good Growth for Cities. PwC-Demos. Available at: For more information about Coventry and Warwickshire Local Enterprise Partnership Economic and Business Intelligence please visit: 5