Growing cities: invest now or pay later

Towns which were doing well in 1901 are still the best now; lack of progress is hard to turn around.

Investment in skills and infrastructure has a crucial bearing on the long run growth prospects of city economies. It did in the 20th century and it will in the 21st century. But the UK still falls well behind other countries, particularly the Nordic ones, when it comes to investment in education, and spend on transport has fallen sharply in recent years.

Centre for Cities latest report Cities Outlook 1901 provides new insight into urban economies at the beginning of the 20th century to understand how and why cities have changed, and crucially what policy makers can do to improve the prospects of cities for the future.

It tells us that history matters. Over the course of the 20th century the importance of major ports and manufacturing centres declined as the economy shifted towards services. Liverpool, once the UK’s second city, now ranks in the bottom 20 per cent for overall economic performance.

Cities are not prisoners of their past; urban economies evolve and adapt to changing economic circumstances. But this change often takes decades. Economic outcomes are the result of the complex interaction of many factors, from a city’s skills base and industrial profile to its links with other cities and the nature of global economic change.

Policy nevertheless has an important role to play. One of the most important factors in determining economic success of a city since 1901 was its skills base: towns and cities with higher level skills in 1901 have tended to do much better over the long run. This highlights that government needs to ensure the skills system is fit for purpose and continues to adapt to the needs of a rapidly changing global economy.

Whilst overall the gap has widened between the North and South over the 20th century, several cities have bucked wide spatial trends. Preston, Warrington and Swindon have seen their relative position improve dramatically. Investment in roads, railways, new homes and business premises facilitated the growth and diversification of these economies. And today these cities are some of the best performing in the country.

The overly centralised nature of governance in the UK further compounds the problem as cities have limited ability to respond in ways that reflect their economic history and unique circumstances today. The latest City Deals marks one of the biggest shifts towards greater devolution to cities but there’s still a long way to go.

The findings reinforce the importance of investing in the fundamental drivers of growth to get the UK firmly on the road to economic recovery and growth. The sad fact is though, while it has long been recognised, the UK falls well behind international economies when it comes to investment in these areas. Relative to GDP, Denmark invests 1.5 times more in education than the UK.

In the short-term, spending cuts on these key drivers of urban growth will stifle the UK recovery and cost more in the long run. The UK must invest now or it will pay later.

Tower Bridge, circa 1900. Photograph: Getty Images

Naomi Clayton is a senior analyst at Centre for Cities

Grant Shapps on the campaign trail. Photo: Getty
Show Hide image

Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.