At the frontier: The geography of the UK\u2019s new economy<\/a>. Centre for Cities. High-skilled and low-skilled residents refer, respectively, to the share of the population with degree-level qualifications and with no formal qualifications, taking the average of 2022\u20132024 estimates to account for fluctuations in data. Deprivation measure shows proportion of neighbourhoods within each grouping which are in the top 20 per cent most income deprived neighbourhoods in each constituent country (excluding Northern Ireland).<\/p>\nBut cities underperform their international peers<\/p>\n
Seven of the 20 least productive big cities in the G7 are British. The underperformance of large cities outside of London accounts for 57 per cent of the UK\u2019s prosperity gap. Stronger national growth depends on improving the performance of Britain\u2019s cities.<\/p>\n
Figure 2: Britain\u2019s secondary cities underperform their G7 peers<\/p>\n
Britain\u2019s productivity divide has a clear geography<\/p>\n
The UK has experienced weak productivity growth for almost two decades, but there is a large variation in performance across the country. The Greater South East remains one of the most productive regions in Europe, while many cities in the North lag behind the national average.<\/p>\n
Figure 3: With the exception of Edinburgh, Leeds and York, all 15 cities with productivity higher than the national average are in the South<\/p>\n
The skills divide follows a similar pattern<\/p>\n
Skills are a fundamental driver of economic performance. Knowledge-intensive businesses invest where they can recruit the workforce they need to help them grow. Cities further north tend to have higher shares of residents with no formal qualifications than those in the South. For example, 12.9 per cent of people have no formal qualifications in Blackburn compared to 4.0 per cent in Exeter.<\/p>\n
Figure 4: Northern cities tend to have higher shares of residents with no formal qualifications<\/p>\n
Part of the challenge is fiscal: the UK is exceptionally centralised, limiting cities\u2019 power to shape their local economies<\/p>\n
The UK is extremely unusual in the extent to which fiscal powers are concentrated centrally. \u00a0Only one in every five pounds that sub-national government has access to comes from taxes, while nearly two-thirds come from grants determined by central government.<\/p>\n
Figure 5: In the UK, 95 per cent of all tax revenue goes to central government<\/p>\n
Greater fiscal devolution could support economic growth<\/p>\n
Across the OECD, countries that are more fiscally devolved tend to have higher average wages. Giving local areas more control over tax retention would give local leaders stronger incentives and more opportunity to grow their economies.<\/p>\n
Figure 6: Across the OECD, fiscal devolution positively correlates with wages<\/p>\n
Fiscal devolution should start with England\u2019s mayors<\/p>\n
The introduction of mayors is widely regarded as a successful constitutional innovation. Mayors and metro mayors represent most of England\u2019s economy, and crucially, they represent local labour markets in a way that local authorities cannot.<\/p>\n
Figure 7: Mayors represent most of England\u2019s economy<\/p>\n
![\"Figure](\"https:\/\/www.centreforcities.org\/wp-content\/uploads\/2026\/07\/Figure-1-Mayors-represent-most-of-Englands-economy.svg\")
<\/p>\n
Source: Annual Population Survey, Business Registry and Employment Survey, Regional gross domestic product \u2022 Note: All data is for 2024, except for GVA data which is for 2023 (the most recent available year).<\/p>\n
Britain needs to build a lot more housing in cities<\/p>\n
British cities have a \u2018density gap\u2019 of 2.3 million homes across their urban cores compared to their French and Japanese peers. The density gap is largest in the big cities outside London and is a likely cause of their economic underperformance.<\/p>\n
Figure 8: Density gaps exist in cities of all sizes, but Britain\u2019s big cities have the biggest density gap<\/p>\n
Poor transport connectivity holds cities back too<\/p>\n
Around 80 per cent of residents in big European cities with up to 1 million people can reach their city centres by public transport within 30 minutes. It\u2019s about 50 per cent in those with more than 1 million. Cities in the UK fall well below this benchmark. For example, just one in six of West Yorkshire\u2019s 2.4 million residents has good access to Leeds city centre.<\/p>\n
Figure 9: Britain\u2019s big cities lag behind their European peers on public transport accessibility<\/p>\n
![\"Figure](\"https:\/\/www.centreforcities.org\/wp-content\/uploads\/2026\/06\/Figure-13-UK-big-cities-lag-behind-their-European-counterparts.svg\")
<\/p>\n
Source: TravelTime; ONS; Eurostat; Centre for Cities\u2019 calculations. \u2022 Notes: For more details, see Rodrigues & Breach (2021).<\/p>\n
The biggest economic prize lies outside of London<\/p>\n
If the UK wants to overtake France and Germany to become the G7\u2019s second most productive economy, the greatest opportunities lie in its big cities outside London.<\/p>\n
If London\u2019s productivity matched that of Paris and Munich \u2013 Germany\u2019s most productive city \u2013 it would deliver 25 per cent of the needed growth, equivalent to \u00a344 billion. However, if Britain\u2019s other major cities performed as well relative to London as their French and German peers do relative to Paris and Munich, they would deliver 57 per cent of the required growth \u2013 \u00a0equivalent to \u00a3104 billion.<\/p>\n
Figure 10: Big cities outside of London would deliver more than half of the growth needed to close the UK\u2019s productivity gap<\/p>\n
![\"Figure](\"https:\/\/www.centreforcities.org\/wp-content\/uploads\/2026\/07\/Figure-10-Big-cities-outside-of-London-would-deliver-more-than-half-of-the-growth-needed-to-close-the-UKs-productivity-gap.svg\")
<\/a><\/p>\nThe size of the prize<\/p>\n
The benefits of improving Britain\u2019s big cities would be significant. The \u00a3104 billion international comparison is the most ambitious benchmark, but closing even part of the productivity gap would deliver substantial gains. These figures are illustrative rather than exact predictions, but they show the scale against which the Government\u2019s ambition and progress should be measured.<\/p>\n
![\"pound](\"https:\/\/www.centreforcities.org\/wp-content\/uploads\/2026\/06\/icon-53.svg\")
<\/p>\n
\u00a334.7 billion<\/p>\n
How much bigger the UK economy would be per year if big city productivity matched the current national average.<\/p>\n
This is equivalent to having another Leeds in the national economy.<\/p>\n
![\"pound](\"https:\/\/www.centreforcities.org\/wp-content\/uploads\/2026\/06\/icon-54.svg\")
<\/p>\n
\u00a3104 billion<\/p>\n
The addition to national economic output if the UK\u2019s big city performance matched that of their peers in France and Germany.<\/p>\n
An increase of this magnitude would close over half the output gap between the UK and Germany.<\/p>\n
![\"pound](\"https:\/\/www.centreforcities.org\/wp-content\/uploads\/2026\/06\/icons-data-tool-living-standards-colour.svg\")
<\/p>\n
\u00a331.6 billion<\/p>\n
The total increase in the amount big city residents could spend on raising their material standards of living if their disposable incomes matched the UK per-person average.<\/p>\n
That would mean an extra \u00a32,720 per year in each big city resident\u2019s pocket.<\/p>\n
The benefits would not be confined to big city residents. As the centres of their regional economies, stronger cities would create opportunities and raise prosperity in surrounding towns and communities too.<\/p>\n","protected":false},"excerpt":{"rendered":"The British economy is largely urban More than half of Britain\u2019s population lives in cities. The economy clusters…\n","protected":false},"author":2,"featured_media":721169,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[59,57,58,50,56,54,55],"class_list":["post-721168","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-kingdom","tag-gb","tag-great-britain","tag-greatbritain","tag-news","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/721168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=721168"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/721168\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/721169"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=721168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=721168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=721168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Figure](\"https:\/\/www.centreforcities.org\/wp-content\/uploads\/2026\/06\/Figure-2-Big-cities-account-for-a-large-share-of-the-UK-economy.svg\")
<\/p>\n