Recovery 'unevenly spread' across UK cities

Monday 24 January 2011 12:34

Economic recovery will be "unevenly spread" across the country, with some cities needing extra government help to create jobs this year, according to a new study published today.

Research group Centre for Cities said many areas were now "bouncing back" from the recession, including some cities hardest hit by job losses such as Hull, Doncaster and Northampton.

These cities all saw drops of 1.2% in the number of people claiming Jobseeker's Allowance in the past year, more than twice the UK average, said the report.

Milton Keynes, Reading, Aberdeen, Leeds and Bristol were named as "cities to watch" amid predictions that they will be better insulated from the effects of the Government's spending cuts and have high potential to create private sector jobs.

The study also revealed that more than one in three jobs in private companies were provided in 11 of Britain's major cities - London, Birmingham, Bristol, Edinburgh, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield.

Five "vulnerable" cities were named as Sunderland, Liverpool, Birkenhead, Swansea and Newport in south Wales, which the research group said might not feel the full benefits of economic recovery for some time.

Cities such as these will be affected more by Government spending cuts and will need extra financial support as well as a "realistic" local plan of action.

Alexandra Jones, chief executive of the Centre for Cities, said: "Buoyant cities like Leeds and Bristol, which have been fast-growing and have lots of private sector jobs, are best placed to lead the UK's recovery.

"It's time these places had new financial freedoms such as full control over the local business rate, and new powers to raise money. They could also benefit from having London-style mayors.

"During 2011, the UK cities most dependent on the public sector, and which have seen slower economic growth over the last decade, will find it more difficult to rebalance towards the private sector. These cities will need realistic plans of action to ride out the spending cuts and create jobs - but they will also need additional financial support from central Government."

TUC General Secretary Brendan Barber said: "This report paints a mixed picture of how the UK is emerging from recession. It's great that some areas may be starting to bounce back but many towns and cities, particularly in the North, are failing to see any sort of recovery.

"Vulnerable cities are suffering from low skills and high joblessness that hit consumer spending and business investment, but instead of providing financial support the government is piling on the misery with deep welfare cuts.

"Government can play a key role in encouraging growth but all we've seen so far are cuts focused on the poorest local areas. A meaningful growth strategy from this government is long overdue."

Baroness Margaret Eaton, chairman of the Local Government Association, said: "Centre for Cities has shown that the economic challenges and opportunities facing cities across the country are widely varied. Councils recognise the need to support private sector growth and job creation, particularly for young people.

"Decisions on how to go about that are best made at a local level, where councils can identify need and find solutions. While councils have been given more freedom to respond to economic issues, they also have less money, meaning they have to be more selective in how they invest in local regeneration and growth."

A Department for Business spokesman said: "It is reassuring to see that there are areas of the country that are starting to see an economic recovery, particularly areas which were badly hit by the recession. However, we need to make sure that all parts of the country begin to see the benefits of the economic recovery, and the Government is doing all it can to help with this.

"There are now 28 local enterprise partnerships which have been given the go-ahead and these will play an important part in boosting growth and creating a strong environment for businesses to succeed in the areas they serve. The partnerships are well placed to understand the demands of their locality and will have the power to make the best decisions for their communities.

"The £1.4 billion Regional Growth Fund will also help support projects which will create jobs and secure long-term growth in the private sector. Bidding for first round of funding has now closed but there will be further bidding rounds in the future."

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