Posts Tagged ‘towns’

Bigger, more urban, more diverse

December 12, 2012

(c) Andy Gilmore

The latest Census data confirms three things we already knew. First, Britain is becoming a bigger and more culturally diverse society. Second, net migration is one of the main drivers. Third, this diversity is largely urbanised – especially in London.

Beneath these headlines are many complications. Diversity is shifting across a number of dimensions at once – country of birth, ethnicity, religion and language. Official ethnic groupings are increasingly inadequate to capture what’s going on: see the huge growth in ‘other white’ and other ‘other’ categories.

Many of these trends will continue, with Leeds University researchers projecting a 20% minority ethnic population by 2051. But there is no obvious evidence that diversity is eroding national identity – 91% of residents identify with at least one UK national identity.

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These demographic changes are among the most profound of our lifetimes. So what are the economic and social impacts of these shifts?

My research is taking first steps towards answering the economic questions. European Urban and Regional Studies have just published this piece, which gives you a nice overview.

There is more detail in these working papers on the economics of super-diversity, the long term impacts of migration in cities, ethnic inventors, and diversity, entrepreneurship and innovation in London firms. This last piece, joint with Neil Lee, is coming out shortly in Economic Geography.

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We’re only beginning to understand some of these long term, dynamic channels. So it’s an exciting – and important – time to be working in the field.

Many of the key people will be in the UK in April for the 2013 NORFACE Conference. If you’re around, I’d encourage you to join us.

Facetime limited

December 5, 2010

What’s on sale here? Will Davies and I both have been puzzling over this ad on the Tube. Will’s worried about the politics of ‘facetime’, but I think there’s a more basic problem.

I can see the point of putting this ad up in (say) Barrow-in-Furness, or in the middle of the countryside. But if ‘facetime’ is the commodity, why offer Londoners access to 400 million people, when they can reach several times that number in the capital itself?

I would have thought that Birmingham’s comparative advantage in ‘facetime’ (or dynamic agglomeration-derived proximity benefits, to be precise) has to be usability, not quantity.

Core cities like Birmingham offer a good balance between size, speed and access. For the businesses targeted here, Brum has pretty good infrastructure, amenities and markets – but is also easy to navigate. Isn’t that the selling point?

London might be a megacity, but it also has to be one of the least usable and most frustrating places in the UK to travel around – as anyone stuck on underground reading this ad would realise …

Shrink to fit

June 3, 2010

My last post talked about the principles of dealing with shrinking cities. This one concentrates on the practice. In DC a few weeks back, I had an informal chat on shrinkage with some of the Brookings Metro team (helpfully organised by Dermot, whose writeup is here).

For me, there were four big points from the discussion:

First, US cities are mainly ‘shrunk’, not ‘shrinking’. With a more mobile population, and severe contraction in the 1980s and 2000s, people voted with their feet. In the UK the picture’s mixed: historical data suggests that Liverpool’s population has fallen by over 300,000 since the 1960s, while Stoke’s has only dropped by 25,000.

That means the challenges are different. In the US, the big issues are repairing the physical fabric for remaining residents, and pooling jurisdictions so local tax bases can cover cash for public services. In the UK, tasks include promoting individual mobility, raising human capital and doing physical repair.

Second, the US approach is bottom up, not top down. This is partly historical: people have bad memories of government Urban Renewal programmes in the 1960s, which had a disproportionate impact on African-American communities. It’s largely institutional – the US system gives cities strong local leaders, typically Mayors, who in cities like Youngstown (est pop 73,000) and Flint (113,000) have led the public conversation and put forward new strategies.

The Obama administration has dipped a toe in the water, talking about ‘auto regions’ like Detroit, and ‘cities in transition’, but none of this has yet translated into action. By contrast, UK efforts like HMR have been Whitehall-led initiatives, essentially aimed at ‘doing something about those inner cities’.

Third, US programmes are less radical, and more micro, than you might imagine. In practice, policymakers focus on struggling neighbourhoods, more than whole cities. Empty houses and land are bought up, and there is selective demolition and rebuilding. Often areas are simply returned to meadows, or turned into parks and bikeways. Rather than actually ‘shrinking the city’, the aim is to improve the city that’s left – making it nicer and greener.

In the UK, however, many  HMR pilots have tried to use housing market remodelling to stimulate area population and economic growth. Adding net housing when populations are shrinking does not feel wise.

Finally, finance differs. In the UK, Whitehall provides upfront funding to HMR, which leverages private sector borrowing – a funding model that’s now collapsed.  By contrast, US improvements are often funded via county-wide property taxes or fixes like TIF – as I’ve pointed out, tools that UK city leaders don’t yet have at their disposal.

Closer to home, Leipzig’s story is instructive too. The second-largest city in Eastern Germany, it lost 100,000 people after re-unification (20% of its current population). In 2000 an expert commission on the city was established, led by Leipzig’s Mayor. The resulting strategy involved some demolition and remodelling of inner urban housing, plus a range of quality of life measures (e.g. allowing artists to take over derelict properties).

Leipzig’s population is about the same size as Greater Manchester, so the city also developed its market potential, with a modernised train station and airport. Overall, it has stopped shrinkage: the population has stablised, and there has been slight employment growth (largely driven by high-tech manufacturing investment, such as a new BMW plant).

Lessons

So what are the lessons for the UK? First, cities – not Whitehall – need to be in control of policy and process, proposing ideas and getting local buy-in. Often, the pitch will need to be about a better, greener place to live – not ‘renewal’ or ‘shrinkage’.

Second, the policy mix should combine place elements (remodelling neighbourhoods) with people elements (improving skills, helping residential mobility). My post last year suggested ‘removing overcapacity in local housing; improving the local environment (which could include some US-style ‘greening’); levelling VAT rates on refurb and new build; developing local skills, access to employment and transport links to stronger labour markets; new funding tools; and some honest repositioning’.

That still feels about right. Although compared with Flint and Youngstown, big cities like Liverpool have far larger domestic markets, and thus potential for further jobs growth. Leipzig’s story suggests there’s a role for demand-side measures in bigger places: Liverpool’s recent economic and population growth confirms this.

The proposed Decentralisation Bill therefore looks quite promising. Big city Mayors and Local Economic Partnerships, more open local planning, and proposals to build local social action are all useful; uniform local incentives for housebuilding less so. More seriously, local leaders will still lack the financial tools to deliver the kind of programmes carried out in the US and in Europe. The forthcoming review of local government finance should look to broaden councils’ toolkit, and widen their tax-raising base.

One final point. CLG and bodies like the HCA have critical system designer and enabler functions, supporting and advising local leaders and communities – if not dictating to them. Whitehall will need to lead on promoting any ‘right to move’ in the social housing system; and will still be providing direct funds for skills and education. Despite the Secretary of State‘s emphasis on ‘localism, localism, localism’ ‘localisation, localisation and  localisation’ (thanks Grant!), I suspect central government will still end up with useful roles to play.

Green cities, green jobs

March 7, 2010

Green jobs are hot. All three political parties want to shift Britain onto a low-carbon growth path. It’s a powerful meme. Two questions, then: what are green jobs? And where will they be? My guess is: mostly quite boring. But they will be everywhere, and they will be a big deal for towns and cities.

So what are ‘green jobs’? ippr’s new report suggests that ‘all jobs should be green’ in future. I’m not sure. Let’s focus on activities with the biggest carbon footprint: energy, waste, transport and construction. Some jobs in other sectors can be greened too, say if manufacturers adopt more sustainable workflows.

Where will green jobs be? To answer that, we need to consider how the UK moves onto a greener growth trajectory. There are two basic approaches, impling different roles for government – and different levels of political engagement.

Let’s call the first the Green Industries approach. This is about increasing the UK’s global share of high-value green activity – like wind turbines and low-carbon vehicles. It also encompasses major infrastructure like high-speed rail. National Government holds the policy levers: public money, tax breaks, business support (and to an extent, picking winners).

The second approach we could call Green Places. This is about making towns, cities and households more sustainable. The focus is on non-traded activities: buildings, energy and waste systems, local public transport – and things like repairing windmills on roofs.

Local government has a critical role here, alongside Whitehall: via recycling, local planning standards (like the Merton Rule), procurement and PPPs (like the ESCOs in Woking and Birmingham). Whitehall matters behind the scenes – for example, through DECC’s new Feed-In Tariff rules.

Green Industries are the sexy, photogenic things politicians get excited about, and are the focus of Labour’s Low Carbon Industrial Strategy, the Conservatives’ ‘Marine Energy Parks’ idea, and the Lib Dems’ green growth plans. Interestingly, the Tories seem keener on Green Places than Labour – see proposals for a ‘green deal’ for households, and support for micro-generation.

My guess is that Green Industries, though exciting, will only take the UK so far. First, only a few places will have them. The range of green technologies is vast. With no global standards, potential for international growth is capped. Most importantly, geographies of innovation, production and sales already differ. Silicon Valley leads the US in ‘cleantech’ R&D – but large-scale manufacturing is already shifting from the US to China and other cheap locations.

Second, the UK is already lagging. In wind turbines – where Britain should be a leader – the top firms are German and Scandinavian. (From this perspective, one of the saddest things about last year’s Vesta dispute is that Vesta is Danish).

Third, policy options are pretty limited. Green industries in the US are supported by Government stimulus money and a massive VC sector. Other European governments have funded producers for years. Britain has plenty of strategy, but limited cash to back these up. Low Carbon Economic Areas have no funding attached, and rely on existing RDA / LA budgets plus local ingenuity. The experience of Science Cities, a similar approach, doesn’t get my hopes up.

The Green Places approach is much more prosaic, but will have bigger impacts on more people. Cities’ carbon footprint is large: the C40 group estimates that worldwide, urban areas represent around 75% of the world’s energy use and CO2 emissions. Fiscally, Green Places largely involves redirecting existing budgets. (Some costs are passed on to firms and households – but councils should be allowed to use tools like TIF to ease financing constraints.)

Finally, British local government is already on the case. The Merton Rule is a classic example of how local policy innovation has shaped national thinking. Woking is a leader in decentralised energy. And Greater Manchester’s LCEA proposals look pretty good, with a five-year retrofit programme, small-scale renewables and smart meters for thousands of households across the city.

The UK needs both green industries and green places. But let’s not get over-excited about the first, while underplaying the second. Green jobs might be more dull than we thought. But they’re important as ever.

The economics of high-speed rail

February 23, 2010

Notebook and Thermos time again. Last week’s slightly weird dust-up between Andrew Adonis and Theresa Villiers highlights two things. First, how tortured the politics of high speed rail are becoming. Second, how murky the concrete costs and benefits remain.

Politically, a fast North-South line should be a done deal. Both main parties want it – but for different reasons, and probably going different places. HS2 is also getting entangled in highly sensitive planning questions, especially for the Conservatives. The Tories want a highly localised, ‘open source’ planning system – but also, room for nationally-driven infrastructure that goes straight through various safe seats.

As with the Channel Tunnel, a surprising number of people are desperate to get away from major investments designed to make their lives easier. (In California, by contrast, one of the main problems facing High Speed Rail proposals is that everyone wants to be on the line.)

We’re still not much clearer on what will actually deliver, economically and environmentally (something I complained about in a previous post). Happily, SERC has just published a new paper [pdf] which gives us some pointers.

The researchers look at the economic impacts of the Frankfurt-Cologne ICE line: 120 miles long, about the same distance as London to Birmingham. In theory, better links between cities bring people closer together, raising their productivity. The researchers isolate this effect by concentrating on new stations with no prior rail links. They find a 1% increase in market access raised GDP by 0.25% around towns on the line. These effects were highly localised, dropping off within about 30 minutes’ drive time.

Importantly, the research suggests these benefits are probably permanent – putting in a new rail line changes the underlying connectivity of the area, which then shifts firms’ and households’ location decisions.

Overall, the authors suggest that HSR both delivers significant additional economic benefit. And it’s good value for money – if gains are permanent, there should be big future fiscal payoffs from higher tax receipts.

That still leaves some big policy questions:

1) The SERC work only looks 4-5 years post-investment – so we don’t know what the really long term impacts of HSR will be (papers like this take a deeper view).

2) We also don’t know impacts for big, well-connected cities. If they are the major gainers from connectivity improvements, HS2’s impact on spatial disparities may be limited.

3) It’s hard to say whether people will switch from planes to faster trains (a modal shift) or use more of both. The answer makes a big difference to the environmental footprint of high speed rail.

4) How to actually fund and deliver the thing.

I’m sure we’ll get answers to some of this when the Government eventually publishes the HS2 report and its own ideas – both of which will be appearing, according to the Transport Minister, ‘before the election’. At which point we can settle down to round 2 of Adonis vs Villiers …

Open the pod bay doors, HAL

December 22, 2009

Essex County Council has asked IBM to manage its public services for the next eight years. My first reaction to this story was that handing over schools and social services to a company that builds supercomputers could go terribly, terribly wrong. Have these people never seen 2001?

Lord Hanningfield: You’ve switched off the heating in all the care homes. Turn it back on!

HAL: I’m sorry Dave, I’m afraid I can’t do that. This mission is too important for me to allow you to jeopardise it …

Anyway. Over the next few years many local authorities are going to have to do more with less. So it’s encouraging to see some trying out new ways to deliver.

Enterprising Conservative Leaders and Chief Execs are also trying to catch Central Office’s eye. The Times suggests this is ‘a new wave of privatisation supported by David Cameron’, following Barnet’s EasyCouncil model and various other experiments. According to Eric Pickles, ‘this is the future and we will be watching developments in Essex very closely.’

That seems sensible, particularly as the wings may be falling off the budget airlines model. My concern, though, is just that what’s being proposed for Essex isn’t exactly innovative, and hasn’t worked brilliantly in other places.

On paper the proposed contract seems a little odd. It’s worth ‘up to £5.4bn’ over eight years, and may save up to £0.72bn over the first three. Even if IBM identifies the same level of savings for the rest of its term – a heroic assumption – Essex only saves £1.92bn overall, but pays out over double that. This doesn’t sound like value for money.

In Canada, where IBM was involved in local government streamlining, the firm introduced one-stop shops and cut service duplication. Many UK councils already do this stuff, though, and few needed an outside contractor to tell them so. Bringing in IBM may say more about Essex officers’ own capabilities than point the way to the future.

My biggest worry is whether business consultants in general understand what local authorities actually deliver. IBM says it provides ‘business analytics and optimisation’. But as I’ve argued elsewhere, public services are more complex than running a shop or a selling cheap flights. This is why we’ve seen many, many examples of business process engineering failing to deliver real value for the public sector. Look at some of Capita’s contracts, or Fujitsu and the NHS Computer Project.

To be fair to both firms, poor management by civil servants is often part of the problem. But that’s another reason to worry about who’s in charge at Essex.

Local public services are also done for different reasons. Efficiency in the narrow sense isn’t actually what we want here, since we’re operating outside the domain of the market. Market efficiency criteria tend to push you into providing less for less, something some Conservative councillors might be quite happy with. But local authorities are charged with providing the best achievable outcomes for people in the area. Sometimes that means reprioritising, even spending more. As Obama Administration’s ‘Ebay in reverse’ initiative suggests, cost-cutting is an important means to free up resources.  But as an end in itself, it’s inappropriate.

Compulsory Competitive Tendering forced councils to operate on a cost-minimisation basis, often producing perverse outcomes and bad policy. The danger for Essex is that it just retreads the CCT experience, without understanding why the world’s moved on.

Read all about it

July 17, 2009

Photograph by Alexandra Wolkowicz

New book chapter alert …

During the 2006 Liverpool Biennial, light and sound artist Hans Peter Kuhn projected a gigantic question mark over the Wirral suburbs (above). Everybody hated it. But in fact it’s an (accidental) artistic masterstroke asking the big questions about suburbia. What is it? What is it for? And if there are problems in suburban areas – and parts of Wirral are pretty deprived – how can we fix them?

The Smith Institute, the  Homes and Communities Agency and CABE have just published a new collection of essays that aims to answer these questions. Housing and Growth in Suburbia is edited by Peter Hall and includes contributions by Nick Falk, Vesna Goldsworthy, Yolande Barnes, Will McKee, Sarah Ganventa, Jim Bennett and Ben Kochan, as well as yours truly.

My chapter, ‘Fixing Broken Suburbs’, looks at suburban deprivation and the prospects for renewal through the downturn and beyond. It’s worth reading this alongside Jim’s essay on ‘suburban renaissance’, which sets out some of the HCA’s early strategic thinking.

For the moment you can download the whole collection here.

Update: Tristram Hunt – who chaired the launch event last week – has done a nice piece on suburbia in today’s Observer.

Right-sizing cities

July 7, 2009

demolition

It must be the Obama effect. Last year my LSE colleague Tim Leunig became a national hate figure for suggesting that residents of  northern British cities should move south.

Now the US Government is thinking about ‘bulldozing entire neighbourhoods’ in up to 50(!) struggling US cities. But instead of being howled down, ‘shrink to survive’ is being taken quite seriously.

This is a debate we need to have. Full credit to Tim for starting it (though I don’t agree with everything he suggests). In years to come regeneration funding will be severely squeezed. There won’t be enough cash to do everything everywhere – so we have to think through the feasibility of managing decline.

Two things stick out from the US coverage. First, the scale of abandonment in some American cities is scary.  Buffalo’s population fell from 580,000 in 1950 to 279,000 in 2005. Rolls in Flint, Michigan have dropped from 196,000 in 1960 to 120,000 today: up to 25% of land is now abandoned.

Second, the policy response is a twist on ‘green growth’. As explained by Dan Kildee, Governor of Genessee County, he takes as much abandoned land in Flint as possible, largely through foreclosures. County-wide Tax Increment Financing is used to leverage the land bank, forward-funding demolition, refurbishment or conversion into parks, urban meadows and gardens.

Few British cities are as badly off as Flint. The historical data suggests Stoke-on-Trent’s population dropped just 25,000 between 1961 and 2001. Hull’s fell from 303,000 to 243,000 over the same period. Liverpool’s has declined massively – from 746,000 in 1961 to 439,000 in 2001 – although the economy and population have been stabilising in the past few years. Liverpool’s right-sizing may already have happened. By contrast, poorer cities and towns in isolated places – like Stoke, Hull, Barrow or Easington – are still struggling to find a role.

Could we run ‘shrink to survive’? The model won’t easily transfer, since TIF and city-regional tax bases are some way off. The UK’s own experiment in right-sizing – the Housing Market Renewal programme – relies on Whitehall cash and now-vanished private sector investment.

More importantly, what would it achieve? Proponents suggest greening an area helps stabilise house prices. It also improves quality of life for residents. But it’s not clear this provides a real basis for growth (Kildee optimistically suggests ‘entrepreneurial agriculture’).

What about encouraging people out? This might not be welfare-maximising. We would need to weigh up the economic gains (moving people to jobs, savings on physical regeneration) against the economic costs (moving people) and social losses (damaged social capital etc).

Urban economics tells us that spatial equilibrium occurs when wages, prices and quality of life all clear. Local reactions to the Policy Exchange report – ‘I like it here, and it’s cheap’ – suggest that people in supposedly failing cities often don’t see them that way.

A sensible ‘shrink to survive’ strategy for the UK would involve: removing overcapacity in local housing; improving the local environment (which could include some US-style ‘greening’); levelling VAT rates on refurb and new build; developing local skills, access to employment and transport links to stronger labour markets; new funding tools; and as Dermot suggests, some honest repositioning. The Pennine Lancashire Pathfinder ticks most of those boxes.

In practice, this feels like an evolution of Housing Market Renewal. But since physical transformation is now largely done, the funding priorities should be (mobile) human capital, not (immobile) housing.

Finding suburbia

June 28, 2009

photo by Martin Godwin

How much of Britain is suburban? I’ve been doing some thinking about this for a book the Smith Institute and the Homes and Communities Agency are publishing in a few weeks’ time.

It’s not just an academic question. We want spatial policy to reflect the reality of where people live – and want to live. But if current lifestyles aren’t sustainable, we need to be able to promote realistic behaviour change.

The UK’s small but determined suburban lobby suggests that 80% of Britons live in ‘suburbia’, and therefore Government needs to abandon its obsession with cities. Others, notably the Urban Task Force, point out that around 80% of Britain is urban, and argue that high-density lifestyles are the only sustainable option for the future.

Over the past decade, Government policy has oscillated between these points of view – big city urbanism on the one hand, and an increasingly suburbanite housing strategies on the other.  That is probably about to change. Any new Conservative government is likely to be much more instinctively pro-suburb – Boris’ relentless focus on Outer London is a flavour of things to come.

All the more reason to get a proper understanding of British suburbia, then. So how suburban are we?

The best way to approach this is to think of the UK in functional terms: a system of urban and rural areas; within that, cities, towns and villages; and within that, a range of neighbourhoods – from city centres out to hamlets.

In population terms, Britain is an urban nation. The best data (from Defra and ONS) puts around 73% households in urban areas. Cities have the lion’s share of this: over 46% of households are in ‘major urban’ or ‘large urban’ areas. Other official research gives the 56 biggest English cities around 50% of the population.

At neighbourhood level, however, Britain is suburban. The best available figures [pdf] suggest around 84% of the English live in ‘suburban’ wards of some kind. These are the numbers routinely used by the suburban lobby. They are now a bit old, but are confirmed by more recent geodemographic data from Experian. Their MOSAIC  classifications suggest around 78% of households live somewhere in suburbia.

So there we have it: if the UK is urban country – a nation of towns and cities – it is also largely a nation of suburban neighbourhoods. In economic terms, cities are where the action is: the largest English cities have over two thirds of the country’s jobs. But in terms of community, we are suburbanites: the most popular house types in the UK are the semi and the bungalow.

That suggests that the Urban Task Force vision of ‘Barcelona in Britain’ fits pretty badly with the reality of most people’s lives. UTF boss Lord Rogers knows this. But as he also points out, neither the environment or the economy can support low-density car-driven lifestyles forever.

This implies that suburban strategy-making needs three main elements. First, it has to recognise the complementary roles of urban places (especially cities) and suburban neighbourhoods. (In that sense, explicit ‘strategies for suburbs’ are probably a bad idea). Second, as far as possible we need to bring the suburbs to the city – for example, terraces and townhouses are a good way to build popular forms at relatively high densities. And third, we need to make suburban lifestyles greener – through greener cars, localising energy generation, feed-in tariffs and so on. ‘The Good Life’ may turn out to be closer to the good life than we thought …

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