Cities Unlimited
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Cities Unlimited Making urban regeneration work Tim Leunig and James Swaffield Edited by Oliver Marc Hartwich Policy Exchange is an independent think tank whose mission is to develop and promote new policy ideas which will foster a free society based on strong communities, personal freedom, limited government, national self-confidence and an enterprise culture. Registered charity no: 1096300. Policy Exchange is committed to an evidence-based approach to policy development. We work in partnership with aca - demics and other experts and commission major studies involving thorough empirical research of alternative policy out - comes. We believe that the policy experience of other countries offers important lessons for government in the UK. We also believe that government has much to learn from business and the voluntary sector. Trustees Charles Moore (Chairman of the Board), Theodore Agnew, Richard Briance, Camilla Cavendish, Richard Ehrman, Robin Edwards, George Robinson, Tim Steel, Alice Thomson, Rachel Whetstone. About the authors Dr Tim Leunig is lecturer in economic Dr Oliver Marc Hartwich is Chief history at the London School of Economist at Policy Exchange with respon - Economics. His research looks at Britain sibility for economic competitive- ness. He since 1870, including a number of papers was born in 1975 and studied Business that look at different aspects of city life Administration and Economics at Bochum over the ages. His work has won a number University (Germany). After graduating of international awards, and was recently with a Master¹s Degree, he completed a judged to be ‘outstanding’ by the PhD in Law at the universities of Bochum Economic and Social Research Council. and Sydney (Australia) while working as a He has advised Parliament, the Treasury Researcher at the Institute of Commercial and the Department for Transport. Law of Bonn University (Germany). Having published his award winning thesis with James Swaffield is a Research Fellow at Herbert Utz Verlag (Munich) in March Policy Exchange carrying out research on 2004, he moved to London to support Lord cities and urban policy. He studied Matthew Oakeshott of Seagrove Bay during Geography at Oxford University. After the process of the Pensions Bill. graduating in 2004 he spent a brief period working in the public sector before com - The authors have previously worked pleting an MSc in Cities, Space, and together for Policy Exchange on Cities lim - Society at the London School of ited , a report on urban policy in the UK Economics in September 2006. and Success and the City . © Policy Exchange 2007 Published by Policy Exchange, Clutha House, 10 Storey’s Gate, London SW1P 3AY www.policyexchange.org.uk ISBN: 978-1-906097-28-8 Printed by Heron, Dawson and Sawyer Designed by John Schwartz, [email protected] 2 Contents Acknowledgements 4 Executive Summary 5 1 Introduction 6 2 Cities Limited 8 3 Success and the city 11 4 Reactions to our work 14 5 Things will only get worse 17 6 We cannot accept this 21 7 What can we do? 22 8 Expanding London 30 9 It will not just be London 37 10 Economic geography outside of the South East 41 11 Setting cities free 45 12 What would cities do? 48 13 Coping with population decline 53 14 Improving governance 57 15 Conclusion 60 www.policyexchange.org.uk • 3 Acknowledgements Policy Exchange would like to thank Natalie Evans, Sam Freedman, Philippa Ingram, Max Nathan and Nick Tiratsoo. ir 4 Executive Summary Cities limited , the first of three reports, in an era when exporting manufactured demonstrated that attempts to regenerate goods by sea was a vital source of prosper - British cities over the past ten, twenty or ity; today the sea is a barrier to their poten - even fifty years have failed. The gap tial for expansion and they are cut off from between struggling and average cities, let the main road transport routes. More gen - alone between struggling and affluent erally, the economic pull of Europe has cities, has continued to grow. Geographical boosted the South East at the expense of inequality is growing. Our second report, the North, Wales and Scotland. Luck has Success and the City , examined experience also played its part: in 1900 London had abroad and the lessons other countries can finance and Manchester had cotton. teach British policymakers. This final Finance has since prospered and cotton report, Cities unlimited , uses the evidence collapsed, reinforcing geographical that we have gathered so far about what is changes. possible and what is not, about what works There is no realistic prospect that our and what does not, to offer new policy pro - regeneration towns and cities can converge posals for regenerating Britain’s cities. with London and the South East. There is, Many of the forces that make life tough however, a very real prospect of encourag - for struggling cities will continue. As ing significant numbers of people to move demand for more highly qualified workers from those towns to London and the grows, the lower skill levels associated with South East. We know that the capital and regeneration towns will make it even hard - its region are economic powerhouses that er for them to catch up – not least because can grow and create new high-skilled, their brightest and best educated leave for high-wage service sector hubs. At the same London after graduation. Nor is a change time market mechanisms can be used to of government likely to continue support - induce some firms to move out of the ing regeneration policy. Ministers in the South East. current Labour Cabinet overwhelmingly We propose a significant liberalisation represent inner city areas. A future of land use in London and the South Cabinet, perhaps more representative of East. At present local councils ignore mar - suburbs and the wealthy South East, may ket signals and zone land for industrial not have the same commitment to high rather than residential use. There are over levels of regeneration funding, particularly 2,500 hectares of industrial land in if economic circumstances demand a London alone, and 10,000 hectares in squeeze on public spending. London and the South East together. If But if we are honest about the con - only half of it were used for housing, it straints and realistic about the opportuni - would create £25 billion in value and ties then we can make progress. We need to allow half a million people to move to an accept above all that we cannot guarantee area that offers much better prospects to regenerate every town and every city in than where they live now. Such a market- Britain that has fallen behind. Just as we led policy would prompt many industrial can't buck the market, so we can’t buck firms that are based in London to relocate economic geography either. Places that to where land is cheaper. So some people enjoyed the conditions for creating wealth will leave regeneration cities; some jobs in the coal-powered 19th-century often do will move to regeneration cities. Both are not do so today. Port cities had an advan tage desirable outcomes. www.policyexchange.org.uk • 5 Cities unlimited We should go further. No one likes cities of the industrial revolution are geo - urban sprawl per se, but suburbs offer a graphically more peripheral than theirs. high quality of life to those who live in The relative weakness of local government them and create the economic “bulk” that here has compounded this disadvantage; makes cities both prosperous and vibrant. our studies of cities around the world – in Increasing the size of London so that it Germany and the Netherlands, in Poland, takes an extra minute’s journey to reach the Canada and Hong Kong – demonstrate edge of town would make room for anoth - that local communities manage their er million people, increasing their oppor - affairs better than a distant central govern - tunities. ment can ever do. We know that the South East offers the Devolution has many advantages. It greatest agglomeration potential, so it leads to diversity, and diversity creates evi - makes sense to think seriously about hav - dence as to what works and what does not. ing more than one large city in the South Anyone who believes in evidence-based East, where London has dominated for so policymaking should support large-scale long. We also know that cities based on devolution. We propose that the highly skilled workers are the most dynam - Government should roll up current regen - ic. Oxford and Cambridge are unambigu - eration funding streams and allocate the ously Britain’s leading research universities money to local authorities according to a outside London and both are well located simple formula based on the inverse of economically. We should consider expand - their average income levels. Central fund - ing both dramatically, just as Liverpool and ing would be available for a handful of Manchester expanded in the 19th century. exceptional circumstances, such as decont - Dynamic economies require dynamic eco - aminating highly polluted land. nomic geography. It would be for local authorities to assess Of course there are successful high-tech the opportunities, devise a plan for their clusters outside the South East and it is area and implement it. They would be right that they should build on their answerable not to central government, but strengths. But in many cases that does not to local people. They could spend the imply huge expansion. Manchester, Leeds money on traditional regeneration ideas, and Newcastle, for example, all have decid - such as supporting local firms or attracting ed strengths, but they are not successful inward investment. They could use the enough to deliver prosperity to neighbour - money to revitalise town centres or provide ing towns, such as Rochdale, Bradford and infrastructure links.