A research project which documents the changing understanding of urban policy in the UK. It examines the measures that successive governments have undertaken in an attempt to ameliorate failing urban areas. It specifically looks at the impact of post-1997 urban policy on a number of UK cities. It finds that despite a concerted commitment to regeneration, cities that were struggling in 1997 are still struggling relative to other, more economically robust, cities. The conclusion being that location and size are critical factors for cities, and ones that policy is failing to address.

Cities are thriving; attracting people and business and driving the national economy. This mantra has crept into common knowledge, but fails to capture the whole picture. While many cities have been prospering, others have not been so successful. These cities are becoming increasingly economically and socially marginalised. It is for this reason that urban regeneration policy has been so central to government strategies since 1997, and has spent over £30 billion on 14 different core policy initiatives. In 40 years it can be estimated that £100 billion has been spent on regeneration at today’s prices.
Yet over the last 10 years, and despite a doubling in funding levels, the very cities that have received these record levels of funding have fallen further behind. Urban policy cities - cities such as Hull, Liverpool and Hastings, which have suffered disproportionately from economic change and have received three-quarters or more of identified regeneration funding since 1994 - were compared with the national average and with a sample of successful cities.

The conclusions were stark. Across all our indicators the urban policy cities not only failed to catch up to the national average or more successful places, but have fallen ever further behind.
As the economic locus of the UK has shifted south, many cities in the north have become marginalised. While government has tried to overcome this with subsidies, these cities are still finding it difficult to adjust themselves to the current economy. The UK story is not one of successful city convergence, but is instead a tale of two types of cities, one free to prosper, the other dependent on regeneration funding.

Urban policy cities have become economically worse -off. Gross value-added (GVA) is 13% below the national average in urban policy cities: this gap is 40% wider than in 1997. In contrast, successful cities’ GVA grew from 39% above the average in 1997, to 46% in 2004. Similarly, income levels in urban policy cities have fallen back relative to the national average, while those of successful cities have moved further ahead.

Incomes in successful cities are now a third higher than in urban policy cities. Urban policy cities offer fewer opportunities. Even after a decade of falling unemployment, unemployment rates in urban policies cities are 40% above the national average. In 1997 they were also 40% above. Housing prices are 30% lower in those cities in which significant urban policy investment has been concentrated, while in 1997 this gap was 19%.

Education, health and entrepreneurship levels have not improved. People are 38% less likely to register a new business in an urban policy city than in a successful city, a figure unchanged since 1997. Pupils are 13% less likely to get 5 good GCSEs, a figure unchanged since 2000. While in 2000 there was a 50% probability that an individual would have no qualifications, in 2005 this figure had risen to 60%. Life expectancy in these cities is 20 months lower than the national average, in 1997 it was18 months.

Policy Exchange
Dr Oliver Marc Hartwich (Chief Economist), tel. +44 20 7340 2650

01/11/2007

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Dr Tim Leunig, LSE & James Swaffield, Policy Exchange

research

Urban Policy

Urban environment