The most and least productive cities in the UK
If workers across the UK were as productive as those in London and South East, there would be a £200billion boost to Britain’s economy.
Workers in the South East – including cities such as London, Slough, Reading, Milton Keynes and Aldershot – have almost double the value of output per worker than other areas of the UK, research from a new thinktank has shown.
The report by Centre for Cities found that the UK’s recent weak productivity record was the result of a performance gap between London and the South East and other areas of Britain.
The value of output per worker in the South East was 44% higher than in other parts of Britain, and seven per cent higher than Germany – The Guardian reports.
Cities such as Stoke, Blackburn, Mansfield and Doncaster has 25% less productivity than the national average, according to the report. However, if all parts of the UK produced the national productivity average, it would increase the size of the economy to £203billion.
One of the reasons cited for weaker productivity, was due to cities failing to be chosen as hubs for higher-skilled work. “Firms choose to locate their high-skilled operations in cities which can offer them access to a high-skilled workforce and other relevant businesses, and will base lower value components in places where land and labour is cheaper,” the thinktank said.
“Barclays bases its high-value banking activities in London and its low-skilled call centre in Sunderland. Similarly, clothing company ASOS has a large distribution centre with low-skilled jobs in Barnsley, but its headquarters is located [in London].”
The report found that highly productive sectors and firms made up a larger share of jobs in cities in the greater South East, than in urban areas in other regions.
The Centre for Cities found that in 2015, the financial sector generated around £155,000 per worker in cities in the greater south-east, compared with £88,000 per worker in cities elsewhere. In the same year, firms in the information and communications sector generated £102,000 per worker in cities in the greater south-east, but only £76,000 per worker in other regions.
Andrew Carter, Chief Executive of the Centre for Cities, is calling on Government to tackle the productivity divide. He said: “This analysis reveals the stark disparities in productivity across different parts of the country, which should be a central concern for policymakers tasked with addressing Britain’s sluggish economic output.
“Productivity is not a problem in the greater South East, but it is a major issue in cities elsewhere in the country. In particular, Britain’s major cities should be leading the national economy, but instead they are causing it to lag behind that of other countries.”