Poor Investment in UK Regional Cities has Hindered Economic Growth, report finds

12/06/2024

A lack of investment in the UK’s regional cities has hindered economic growth, resulting in lower standards of living compared to the US, France and Germany, according to a report released ahead of the 50th G7 summit in southern Italy this week.

The Centre of Cities think tank highlighted that the primary difference between the UK and its major competitors is the low productivity in cities such as Manchester, Birmingham, Glasgow, Sheffield and Nottingham.

Cities of a similar size outside Paris and Berlin exhibit higher productivity, measured by output per worker per hour.

The study found investment is more evenly distributed across numerous US cities, which have thrived due to local financial support and recent initiatives.

Cities such as Lyon and Frankfurt ranked higher than Birmingham and Manchester, affecting the UK’s position among G7 economies. The UK remains a middle-ranking country, ahead of Canada, Italy and Japan in terms of output per hour.

Climbing the Summit: Big Cities in the UK and G7 report said London is no longer consistent source of income and wealth for the rest of the country, increasing the vulnerability of other cities. The government has been urged to adopt a broader investment strategy to improve digital industries in regional cities.

Laura Lodwick, Chief of Hub Operations for AND Digital commented: “Investment in regional cities is vital for UK economic prosperity and technology, in particular, can open up new opportunities to help distribute wealth and help local communities to thrive. A major contributor to the regional gap is that many digitally skilled people move away from their local community into London to pursue a career, so the incoming government, local councils and regional businesses need a strategy to retain talent.”

“Digital skills in fast-growing areas such as generative AI and data play a crucial role in empowering people, so education and local training grounds are important to help train, reskill and upskill the regions. Skills training should form part of the retention strategy for local businesses, offering courses and constant opportunities that lead towards career progression.”

“Technology has no boundaries, it’s not just restricted to London, so it’s time to show off what the rest of the UK has to offer.”

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