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How thriving cities can unlock UK productivity – with PwC

A special podcast from Spotlight, the New Statesman’s policy supplement.

Productivity is the key to unlocking greater prosperity in cities. For businesses, increasing workers’ productivity leads to higher profitability, wages and economic growth. For public sector organisations, it leads to improved public services and value for money, and a happier, healthier population.

But economic growth in the UK is stagnating. While the world has universally faced many shocks in recent decades, the UK’s recovery has been particularly sluggish. According to figures from PwC, our wage and productivity growth are among the slowest for G7 countries. Using the economic power contained within our major cities is key to unlocking productivity.

In this special episode sponsored by the leading professional services firm PwC, we speak with city leaders about the crucial role cities can play in boosting Britain’s prosperity.

The journalist Becky Slack was joined by Katie Johnston, a partner at PwC and specialist in public services and local government; Marvin Rees, the mayor of Bristol and co-chair of the UK Urban Futures Commission; and Tom Riordan, the CEO of Leeds City Council.

“I define productivity simply as getting more from less,” said Rees. “Be that, getting more services, getting more goods, getting better happiness for your population from less – less money, less resource use… and less time. Cities are uniquely placed… to offer that increased productivity.”

Johnston spoke about the productivity gap that exists between London and other major cities, which was highlighted through PwC’s recently published Productivity Tracker. Rees said that if our core 11 cities’ productivity was brought up to the level of our European counterparts, this would inject £100bn a year into the national economy.

Ways to close this gap were explored, including: instigating place-based industrial strategies; devolving powers to local leaders; improving transport connectivity; and improving social mobility through upskilling people for local jobs and honing in on regional talent pools.

The Royal Society of Arts’ Urban Futures Commission report, of which Rees is co-chair, also recently published a report on how to boost the prosperity of the UK’s cities. Rees highlighted three core recommendations: giving cities statutory responsibility for economic growth; empowering local leaders and improving local-central government partnerships; and radically transforming how local authorities access funding.

It was also discussed how greater productivity can contribute to regions’ sustainability and net zero goals, by using less resources to create greater output and better outcomes. Riordan spoke about new biodiversity net-gain rules for building developments as an example, which require developers to put 10 per cent more biodiversity back into an area. “It could be a great placemaking driver if we get it right,” he said.

Listen to the podcast in full above or on the Spotlight on Policy podcast channel.

Read PwC’s “Good Growth for Cities” report.