Why big cities are crucial to ‘levelling up’

This latest report from UK think tank Centre for Cities looks at the underperformance of big cities at the heart of the North-South divide. 

Unlike many other developed economies, the UK’s largest cities and towns do not become more productive as they get bigger. In Germany, France, and the United States, there is a positive relationship between city size and productivity, as measured by GDP per worker.

This relationship does not hold in the UK. A number of small cities, such as Slough and Swindon, are more productive than expected and, with the clear exception of London, most large cities are less productive.

Even after adjusting the size of cities to take into account people who commute into them for work, most of the UK’s large cities still underperform. Their underperformance affects many more people than the underperformance of small- and medium-sized places, and has much larger implications for the national economy.

Among those underperforming cities, if the eight largest closed their output gap, the UK economy would be £47.4 billion larger in total — equivalent to adding two extra economies the size of Newcastle to national output. Manchester, Birmingham and Glasgow account for 70 per cent of this gap. For comparison, if all of the underperforming small- and medium-sized cities closed their output gaps, the UK economy would be £22.5 billion larger in total.


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