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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer, an FT contributing editor, is chief executive of the Royal Society of Arts
Among the most eye-catching of the announcements during this year’s party conferences concerned towns. Conservative ministers announced plans to regenerate 55 struggling UK towns, while Labour proposed the creation of a number of “new towns” located along the M1 motorway corridor.
The politics of these announcements are easy to understand. Towns are home to more than half the UK population. More than that, they will be a key political battleground in the next election. With the Conservative party tending historically to dominate the rural shires, and the Labour party the cities, it is towns that are home to the most sacred of psephological animals — the swing voter.
Many UK towns are ripe for regeneration after years of neglect and both parties’ proposals contain encouraging elements. The 10-year funding for towns provided in the government plan is a clear and positive break from past short-term financing. So too is the proposal to give full discretion on spending priorities to a wide set of local stakeholders, through a Towns board.
As for the Labour plans, new towns offer the tantalising prospect of developing “greyfield” land — the plentiful but unlovely bits of the greenbelt — to support increased housebuilding and other public and private development. New towns would be relatively unencumbered by the Nimbyism of existing residents and local planning perils.
In other respects, however, the economics are questionable. First, in their scale. Extra government financing for towns — £20mn per town over 10 years — amounts to less than £50 extra per person per year. By comparison, local government funds, per head of population per year, have been cut by around £300 since 2010.
More curiously still, the government plan was justified as rebalancing the scales historically tilted towards cities. Yet there is strong evidence that it is the cities outside London which account for the UK’s spatial underperformance. Raising their performance to the levels of European counterparts could yield a dividend of £100bn per year for the UK.
The cities versus towns distinction is itself a completely false dichotomy. With the right connectivity, the benefits of successful cities spill over to satellite towns — their relationship is symbiotic. So a number of well-connected UK towns — such as Luton, Swindon and Basingstoke — have levels of gross domestic product per head above non-London cities. It is differences between regions, rather than within them, that make the UK an international outlier.
The chronic underperformance of British cities and their surrounding regions is easy to diagnose: it stems from underinvestment. In cities, levels of investment per head differ massively: Newcastle has a third of Manchester’s and an eighth of the London borough of Westminster’s.
A chronic lack of investment in improved transport connections is partly to blame, both within cities and to their surrounding towns and villages. Only 40 per cent of people can reach their nearest city centre within 30 minutes in the UK, compared to two-thirds in comparable EU cities. Many satellite towns end up stranded, failing to harvest the spillover benefits of proximity to the centre, leading to widening disparities between regions.
If we turn to the Labour proposals, many of the same questions arise. If new towns are poorly connected to surrounding cities and towns, and fail to benefit from their existing skills, culture and business activity, they will be stranded at birth. New towns are not new. Those built in the 1950s and 60s have average levels of GDP per head below the national average. For every Milton Keynes, there is a Thamesmead, Cumbernauld or Runcorn.
As international experience makes clear, unlocking potential prosperity in the UK means releasing the potential of its city-regions, nurturing that strong symbiotic relationship between cities and surrounding towns. It is no coincidence that regeneration success stories — both internationally in places like Detroit, Pittsburgh and Dortmund and in the UK in places like Docklands and Stratford — followed that recipe.
Thriving towns are as good as any metric of success — not just politically, but economically and socially. But the means matter in achieving that end. The road to success is not through subscale, towns-centric initiatives. It is through a long-term plan for city-regions, connecting the satellites and supporting the stranded towns and villages. The UK’s politicians would better serve their citizens’ needs, rural and urban, this way.