Look Away Now If You Live In Aberdeen or Burnley

Posted on Jan 22, 2024. by NTI

What links Aldershot, Bristol, Derby, Northampton, Slough, Telford and York?  We’ll leave that teaser with you for now.

A report released today (Monday 22 January) by the Centre for Cities headlines with a statement that the average UK person has lost out on £10,200 since 2010.

The Centre for Cities describes itself as an independent, non-partisan think tank dedicated to understanding and improving the economies of the UK's largest cities and towns.  You may question its independence given its report highlighted economic growth before and after the change from Labour to Conservative governments in 2010 (as well as the apparent joke at Michael Gove’s expense we shall see later).

The thinktank said near-stagnant progress across the UK since David Cameron’s election victory had left people with £10,200 less to spend or save on average than if the economy had grown at pre-2010 trends.  Looking at the results of the 63 cities in the study sees Aberdeen in worst place with a loss of £45,000, with Burnley next up at £28,000.  Milton Keynes and Cambridge complete the bottom 3 (well 4) with an average regression of £21,000.

“Aberdeen has gone from being one of the best performers to [having] a pretty disastrous decade,” said Paul Swinney, the director of policy and research at the Centre for Cities. “All of this stems from over-reliance on one industry, which has knock-on effects.”

The report found that while an estimated 9,000 jobs areas connected to the oil and gas industries, it would have had an inevitable knock-on across the whole city.  Aberdeen saw a 30% drop in retail jobs, compared with a 6% downturn nationally.  House prices have also been hit, with prices only 3.4% higher in 2022 than in 2010, compared to a 50% rise nationally.

This analysis does not bode well for Port Talbot, home to the Tata Steel blast furnaces at which 4,000 people are employed.  It is expected that the majority of the 2,800 job cuts will be in the Welsh town as Tata Steel announced plans to decarbonise its operations (a move Tata claims will reduce emissions for the whole country by 1.5%).  It is understood the redundancies will begin in April, with a further round due by September.

Only 7 of the 63 cities in the Centre for Cities study saw positive results, with the largest being only £2,200.  These were the seven cities in the opening teaser but as to why they are bucking the trend, answers on a postcard please to NTI Towers.

And so, to the Michael Gove putdown.

The thinktank report concluded that every part of the UK had been “levelled down” after years of weak economic growth and recommended an improvement of productivity as the “only long-term answer to putting more money in people’s pockets”.  It’s suggested three-point plan was to:

1)     Stick with the levelling up plan, which it described as “not perfect” but containing “much to commend”

2)     Devolution of business strategy

3)     Reform the planning system

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