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UK competitiveness increasingly concentrated in London

11 November 2013

big ben

Since the financial crisis the City of London has become a more important source of competitiveness and future growth for the British economy as a whole.

This is one of the findings of the 2013 UK Competitiveness Index report, compiled by Professor Robert Huggins of the University's School of Planning and Geography and Dr Piers Thompson of Nottingham Trent University, which benchmarks the competitiveness of all local authority areas in Britain.

London boroughs account for the top nine most competitive places in Britain, headed by some distance by the City of London, and followed by Westminster, Camden, and Southwark. A number of England's largest cities – including Bristol, Leeds, Nottingham, Newcastle, Birmingham, and Liverpool – have seen their position improve since the 2010 index, suggesting a continued urban renaissance in these core cities.

In Scotland, Glasgow has also improved its competitiveness, while in Wales, Cardiff has seen its competitiveness fall. Amongst those cities that have improved their position, the most notable is Manchester, with the North West of England region as a whole showing competitiveness improvements.

In the case of the devolved administrations, local authority areas in both Scotland and Wales generally fail to show any overall progress, and are continuing to lose ground. The least competitive locality in Britain is Blaenau Gwent in the South Wales valleys, which has continued to see a continued erosion of its competitiveness.

Blackpool is the lowest ranked locality in England, followed by another coastal locality in the form of Gosport in South East England. In Scotland, the lowest ranked locality is North Ayrshire, which has seen a significant fall in its competitiveness during the period.

In England, the Local Enterprise Partnership (LEP) areas in the Greater South East of England are by far the most competitive, led by the Thames Valley Berkshire LEP area, followed by the London LEP area and the Enterprise M3 LEP area (comprising of those localities situated near and along the M3 motorway). At the bottom of the LEP area rankings are the urban economies of the more northern parts of England, with the least competitive being the Black Country LEP area, followed by the Liverpool City Region and the North Eastern LEP area.

According to Professor Huggins: "The indices suggest continuing economic divergence across Britain. The clearest trend is the increased concentration of Britain's economic competitiveness and growth capacity within London, in particular the City. During the period following the introduction of regional development agencies (RDAs) in England, competitiveness had begun to become more evenly spread across certain regions. Although Local Enterprise Partnerships were introduced by the coalition government to replace RDAs, they have lacked the funding power of the RDAs, and do not appear to have taken forward some of the improvements in regional economic capacity and capability that were beginning to become apparent prior to their demise.

"Outside of England, there is little to suggest that the economic powers and institutions endowed on Scotland and Wales have allowed their localities to compete any more effectively with their English counterparts. This points to the potential limitations of political institutions in promoting economic development within places ill‐equipped to compete in a post‐industrial economic environment."

The report concludes that whilst government agencies and devolved political institutions have given the British economy the chance to diversify its competitiveness away from its dependence on the financial sector, this opportunity has not been embraced.

The full report is available here