The North-South Divide has Become a Chasm. Can it be Fixed?

The north vs south debate runs and runs, but new research has indicated the economic distance between the two is widening. Should businesses in the north be doing more to create jobs or are conditions too challenging? Should it be down to the State to provide the catalyst for growth or can people help themselves by taking more risks, being more entrepreneurial and forcing change? Will the affordability of life in the north eventually win out when people choose where they want to live if house prices don’t fall soon? This piece was originally printed by London Loves Business, but we don’t think its too biased…

The economic gap between the north and south has “dramatically widened” over the past decade, according to think tank the Centre for Cities.

It warns of a “staggering scale of challenge” to fix our “two-tier economy of dynamism and decline”.

The think tank’s Cities Outlook report has found that, for every 12 jobs created in the South of England between 2004 and 2013, only one was created elsewhere in Great Britain.

But the South is not unstoppable

The study reveals that most economic growth in this country is driven by “only a handful of cities”, most of which are in the South.

These cities have seen growth in their population, number of businesses and jobs.

Populations in southern towns and cities grew at roughly double the rate of those elsewhere from 2004 to 2013.

Milton Keynes was the city with the highest percentage growth in the number of jobs created over the past decade (18.2%), followed by London (17.1%), Cambridge (15.7%), Brighton (11.1%) and Bournemouth (10.0%).

London had the highest number of jobs created (as opposed to percentage growth), seeing 769,500 new jobs added to the economy from 2004 to 2013.

But it’s not all rosy in the South.

The report warns that the “unprecedented growth in housing prices” in southern cities poses a threat to their economic growth.

Will the government take up the gauntlet?

The think tank criticises “successive governments”, saying politicians are failing to tackle the cost of housing.

It also criticises leaders for failing “to rebalance the national economy, with policy interventions and funding consistently too small, ad hoc, complicated and costly for cities to implement”.

Andrew Carter, acting CEO of the Centre for Cities, said: “The stark picture the report paints of the enormous gap in the fortunes of UK cities over 10 years underlines why a ‘steady as she goes’ approach must be scrapped.

“We must move from thinking that bundling up new funding streams with bureaucratic delays, or simply tinkering around the edges with well-intentioned announcements, will be enough to reverse trends that are becoming increasingly entrenched.

“Cities need long-term funding and strategic planning, and policies that go to the heart of addressing the key drivers of economic growth – including transport, planning, skills and housing.

“This report throws down the gauntlet for all parties to turn their recent interest and pledges around cities and devolution into a clear plan to grow jobs and businesses, and improve quality of life throughout the United Kingdom.”

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