Every part of the UK has been “levelling down” since 2010, leaving people worse off, according to the Centre for Cities.
Research by the think tank found that no part of the UK has escaped the impact of the flatlining of the UK economy in the past 14 years, which, in effect, has had a “levelling down” effect on the country.
The organisation’s Cities Outlook 2024 report found that at national level, people have been left with £10,200 less to spend or save on average since 2010 than if the economy had grown at pre-2010 trends.
The report sets out the scale of the challenge in boosting prosperity across the country. It examines disposable incomes in the UK’s 63 largest cities and towns and found that over time every place is out of pocket.
The study found that gross disposable income growth per head was £13,590 lower in London than it would have been if it had grown in line with 1998-2010 trends, while Middlesbrough and Sunderland in the North East experienced similar average shortfalls of £13,200 and £12,730 per head respectively, and people in Cardiff were £13,080 worse off on average.
The people of Burnley were especially out of pocket, where the average person was £28,090 worse off, as were people in Cambridge and Milton Keynes, where they would have been £21,000 richer on average if incomes had grown at pre-2010 trends.
In just seven places across the UK, disposable income growth has outperformed pre-2010 trends, in almost all cases due to underwhelming growth in the 1998-2010 period.
The think tank said this shortfall has happened because while the UK has experienced a jobs boom since 2010, this has not been accompanied by productivity growth.
Researchers found that all but two places saw jobs growth, which pulled more people into work in almost every city. London led in relative terms, with total jobs rising by almost 30, an additional 1.4 million roles.
But productivity growth – the key driver of higher wages – was poor across almost all cities. Productivity growth lagged pre-2010 performance in all but five cities. Eighteen cities were less productive in 2021 than 2010, with previously strong performers like Cambridge, Milton Keynes and London struggling.
Housing costs and child poverty on the rise
Other analysis in the report found that housing costs have increased in most places, eating into disposable incomes. Housing became less affordable in almost every place in the 2010s, with the steepest rises in housing costs in places in the South East such as Cambridge, London and Brighton; these already had high housing costs in 2010.
Rates of children in relative poverty have risen in almost every city; and the proportion of children in relative poverty who live in working households has also risen.
In 2021, there were six cities, all in the North and the Midlands, where more than a third of children were from households in relative poverty – but as recently as 2014, there were none. In Birmingham, there was an increase of 60,000 children living in relative poverty over that period.
Andrew Carter, chief executive of Centre for Cities, said: “Both the two main political parties have pledged to grow the economy and the General Election debate will have growth at its heart. The challenge for the next Government is to go beyond the rhetoric and to do what’s needed to make this rhetoric a reality.
“The UK has had a torrid time since the Great Recession. Everywhere, up and down the country, including places that were doing relatively well before, has been levelled down because of the lack of growth. To get growth in every place, the next Government needs to act at a radically different pace and scale, and mark the beginning of a multi-decade policy programme.
“The first step in a realistic approach to grow the economy is to recognise that the British economy is an urban economy. Cities account for 9% of the land and over 60% of the economy, as well as 72% of high skilled jobs. Their slowdown is at the heart of why the national economy is struggling. There is no plausible way of achieving higher growth without increasing the innovation and dynamism of urban Britain.
“This means reforming the planning system to enable cities to grow, devolving more powers and financial freedoms to encourage our big cities to make decisions that support growth, and following the levelling up rhetoric with bold actions.”
