David Cameron today further emphasised the impending cuts that are coming to public sector budgets. Last year we estimated in our Public Sector Cities report that 290,000 public service jobs are likely to be lost as a result of these cuts. Some other commentators have put this figure closer to 500,000.
So now, more than ever, cities in England need to generate private sector jobs. But as our Private Sector Cities report released today shows, some places, such as Milton Keynes and Leeds, are in a much better position to do this than others, such as Barnsley and Birkenhead.
Despite the stable economic environment in the decade before the recession, some cities actually lost private sector jobs. Stoke lost over 20,000 jobs between 1998 and 2008, Nottingham lost over 15,000. The expansion of the public sector helped to mask this fall in private sector jobs in some cities, but a fiscal squeeze means that the public sector is unlikely to act as a backstop in the next decade.
Even with the sharp increase in public sector jobs, some cities were still not able to provide enough jobs for their residents. Many had below average employment rates. Back before the recession began, 620,000 extra posts would have been required to increase the employment rate of lagging cities to the national average. That’s over 20,000 jobs in Middlesbrough or the equivalent of 8 Corus steelmaking plants.
In the past, politicians have maintained that that if people are prepared to work then there will be a job available for them. But our statistics show that this simply isn’t true. In 2008, there were four unemployed people for every vacancy in Birkenhead and in Barnsley there were five.
England’s geography of opportunity is uneven, and government policy needs to recognise this. Expansion should be supported in buoyant cities such as Brighton and Cambridge to help people access job opportunities where they are being created.
This isn’t to say that the Government should turn its back on places with a tougher outlook. There is valuable economic activity in all cities, and this should be supported. But policy makers will need to be realistic about what can be achieved in these places.
Investment in these cities must continue, but it should aim to improve quality of life for residents rather than subsidising further expansion. And there should be a strong focus on educational attainment and skills development – while recognising that their residents might need to commute further a-field for skilled job opportunities that result.
We are entering a new age of less money and smarter spending. So it’s key that economic development decisions are delivered in efficiently and effectively. This means swimming with the tide of the economy rather than against it.
Paul Swinney is an analyst at Centre for Cities and co-author of Centre for Cities’ new report Private Sector Cities, which is available to download from www.centreforcities.org/privatesectorcities
