Let’s talk about towns
Think tank: Social Market Foundation
Author(s): Scott Core; Aveek Bhattacharya
September 22, 2022
This report from UK think tank the SMF attempts to build a better understanding of economic vitality across towns in the UK.
This report analyses 800+ towns across the UK in order to develop a more thorough understanding of the kind of policy focus necessary to unlock their economic potential. By recognising the political salience of towns, we hope to inform discussion by bringing the metrics on different areas’ performance closer in line with the places that people care about so policymakers can harness towns’ resources to benefit local businesses and people, and encourage economic growth. In this phase of the project, we have focused on measuring economic vitality in towns and understanding how the drivers of prosperity vary across the country. Our analysis leverages proprietary Visa payments data to compile a local-level dataset of town economies and develop a typology of towns sharing similar characteristics, splitting the 86% of towns with untapped potential into five categories – Opportunity, Backbone, Foundation, Heartland and Gateway – with the remaining 14% being classed as Vibrant. As such, unlocking growth in in the former categories will be essential in driving positive outcomes for the UK economy across the four nations.
Key themes, emerging from the analysis:
- A towns versus cities narrative is likely to be counterproductive. Towns benefit from the economic “halo effect” of successful cities, though there are notable exceptions to this phenomenon.
- A North-South divide in economic vitality is far too simplistic. A narrow policy focus on levelling up the North raises the risk of Southern towns failing to meet their full potential, and would ignore lessons from Vibrant towns in the North.
- High skills is the best predictor of economic vitality. Driving up skills levels, attracting talent from other parts of the country and tackling health inequalities has to be a focus of policy.
- Foundation towns need to focus on skills, wellbeing and liveability.
- Economic vitality must not come at the expense of wellbeing. Many places that score relatively poorly on economic dynamism have relatively high levels of life satisfaction.
- On average, opportunity towns and heartland towns face the greatest challenges in reaching net zero.