ENHANCING PRODUCTIVITY IN UK CORE CITIES.

Foreword
Acknowledgements
Executive summary
	Assessment
	A summary of recommendations
Assessment and recommendations
	Assessment
		Core Cities display low productivity levels by national and international standards
		The workforce and sector composition holds back productivity
		The potential of agglomeration economies is not fully realised
		Core Cities’ clear potential is hampered by a range of socioeconomic challenges
		Closer integration of Core Cities and their surrounding regions could yield productivity benefits
		The specific challenges of Core Cities could be addressed with place-based policies
		Core Cities have navigated a fast-changing governance landscape, marked by an asymmetric and deal-driven process of devolution
		Despite recent fiscal measures, Core Cities regions have limited fiscal powers and face funding uncertainties, which can be further exacerbated in the context of Brexit
		Core Cities’ current powers limit their ability to improve their performance
	Recommendations
		Core Cities’ labour markets need investment to upskill low-skilled workers
		Labour force participation should be encouraged
		Public transport provision and regulation needs to be strengthened and soft modes of transport should be encouraged
		Core Cities and the UK Government should work together to find new ways of encouraging housing development
		Spatial planning at the city-region scale should be strengthened
		Place-making policies should be used to enhance productivity and well-being
		Linking Core Cities with surrounding towns and villages can help “borrow” agglomeration economies
		The devolution process must continue and ensure a better match between responsibilities and financial resources
		Multi-year budgeting can help Core Cities plan over longer time frames
		The capacity to plan and implement integrated strategies should be strengthened
		Towards greater productivity and inclusiveness in Core Cities
	References
	Note
1 A snapshot of socioeconomic conditions in UK Core Cities
	Introduction
	Core Cities constitute almost one-quarter of the UK economy
	The economic structure of Core Cities
		Unemployment levels in Core Cities are low but labour force participation is weak
		Core Cities have a diverse service-based economy
		The number of small businesses has been growing but it is unclear whether this represents an increase in entrepreneurial activity
		Boosting service exports would yield productivity benefits
	Education and skills utilisation are essential pieces in the productivity puzzle
		Skills gaps are an issue for some Core Cities
	Innovation is a key determinant of productivity and long-term growth
		Digital infrastructure development should be supported
	Transportation infrastructure is a bottleneck for productivity
		Core Cities rely heavily on road transport
		Better public transport is crucial
		Core Cities need the powers to regulate local public transport effectively
		Reducing car-based transport is urgent for environmental and public health reasons
	Inequality and segregation of income needs to be addressed
		Housing supply is key for inclusive growth
		Brownfield redevelopment prevents the fragmentation of the urban fabric
	References
	Notes
2 Productivity in Core Cities
	The UK productivity puzzle
		Weak average productivity outside of London holds back the aggregate productivity in the UK
		Productivity levels have been diverging across Core Cities
	Understanding the factors that drive productivity in cities
		Cities are drivers of productivity growth
		Skills and industry composition matter for productivity
		Agglomeration economies
		Local institutions, infrastructure and geography
	Productivity in Core Cities: An econometric analysis
		Core Cities generate agglomeration economies below their potential
	Generating stronger agglomeration economies would yield significant productivity gains
		Comparing the impact of workforce and sector composition to the underutilised potential of agglomeration economies
	Further evidence on the role of sectoral composition, infrastructure and connectivity for productivity
		Productivity and human capital
		Connectivity of cities
		Industrial specialisation and diversity
	Local and regional planning matters for productivity
		The importance of place-making
		Linking Core Cities with surrounding regions
	References
	Notes
3 Making the governance of UK Core Cities work for people, places and productivity
	Introduction
	Core Cities encapsulate the opportunities and challenges of the process of devolution adopted in the UK
		Core Cities have navigated a fast-changing governance landscape
		Core Cities have grappled with an asymmetric and deal-driven process
		Despite recent fiscal measures, Core Cities have limited fiscal powers
			Revenues
			Spending
			Direct investment
			Borrowing and debt
		Core Cities are confronted with funding uncertainties, which are exacerbated in the context of Brexit
	While Core Cities play a key role in productivity, they face limitations within their current powers
		Creating scale through pan-regional bodies
		Contributing to the implementation of the UK Industrial Strategy
		Boosting skills in Core Cities
		Unlocking the potential of transport and infrastructure in Core Cities
		Addressing the climate imperative in Core Cities
		Pursuing more inclusive growth in Core Cities
	Ways forward to help make devolution more effective in boosting productivity in Core Cities
		Continue the devolution process and ensure a better match between responsibilities and financial resources
		Enable multi-year budgeting
		Strengthen the capacity to plan and implement integrated strategies
		Towards achieving the productivity-inclusiveness nexus in Core Cities
	References
	Notes