UK cities are failing to turn their economic growth into better lives for people, according to the Legatum Institute's 2016 UK Prosperity Index
The Index is the first of its kind for the UK. It defines and measures prosperity through seven pillars—Economic Quality, Business Environment, Education, Health, Safety & Security, Social Capital, and Natural Environment—covering 389 local authority areas. It finds in London that Richmond Upon Thames is the most prosperous borough and Barking and Dagenham the least.
Reinforcing Prime Minister’s Theresa May's agenda to deliver a country that “works for everyone”, the report spells out who the country isn’t working for and makes recommendations for how that might change.
The think tank’s Prosperity Index Team's Alexandra Mousavizadeh, says: “The UK Prosperity Index shows that a country may flourish, but that the opportunity to flourish does not reach all citizens. Far too many cannot pursue and achieve their potential. It shows for whom the country is not working, and why.
“Such opportunity is most lacking in urban areas, where the absence of life chances hinders an area’s ability to transform its wealth into wider prosperity. Without the ambitions and achievements of all, national prosperity is hindered. Britain cannot be her best. For life outside the EU, she needs to be.
“The recent referendum result made clear that a large proportion of Britons feel left behind by globalisation—that, for them, aspiration and opportunity have been extinguished. They are right. The UK Prosperity Index shows a significant negative relationship between prosperity and the share of the Leave vote. Those areas that voted to leave the EU were far more likely to be areas that prosperity has passed by, areas for which the country is not working."
Headline findings reveal:
• Urban Britain is failing to deliver prosperity: When prosperity is compared to an area’s wealth, just 34 of the UK’s 138 urban areas are delivering notably more prosperity that their wealth would suggest (a surplus). The rest have marked prosperity deficits.
• Poor but prosperous: The top ten most prosperous areas represent a staggering cross-section of the nation’s wealth, from an economic output per head of around £14,000 (putting it within the 10 poorest) to £33,000 (just outside the 20 richest). How well local areas do in turning their wealth into prosperity—rather than their wealth alone—is by far the strongest predictor of how prosperous they are.
• Deliver on life chances and you deliver on prosperity: Life chances—health, social capital, education level, wellbeing, and sense of opportunity— are the best predictor of whether a local area is delivering a prosperity surplus.
• Social capital has the potential to be a potent driver of prosperity through real localism: Social capital—when community-focused—has the potential to supercharge prosperity through localism, using direct community-level decision-making. When social capital is more identity-based, however, this is harder to achieve.
This is the first time that the distribution of prosperity has been measured in the UK at this very local level. The report is also the first tool of its kind in the UK to use both objective and subjective data, measuring not only how prosperous an area is, but also how prosperous its citizens feel.
The report’s author, Harriet Maltby , Head of Policy Research at the Legatum Institute) said: “The UK’s cities are letting down many of their residents by failing to turn their higher wealth into real prosperity, a prosperity, as much about wellbeing as wealth. They’re failing because they are struggling to provide basic life chances to the large numbers who live there.
“If there is no good school for your child, your environment and lifestyle is unhealthy, and you don’t have people around you to depend on, then many more life opportunities are closed to you. Theresa May is right to focus on those who feel left behind because this Index proves they have been.
“The challenge for Government is that government alone cannot provide all the answers. Many of the obstacles to prosperity are deeply local. Rather than try to solve the problems, government should better empower local government and communities to take the action they are best placed to know, if true prosperity is to reach everyone.”
Legatum Institute is calling for a number of recommendations to address the UK’s prosperity challenges including:
- Establishing local prosperity partnerships to oversee prosperity delivery under which the existing Local Enterprise Partnership (LEP), looking at economic development, would sit alongside a new body focused on social development.
- Putting prosperity in the hands of the people and a further study on how the Hebridean model of community assets run by a community-led not-for-profit company could extend into deprived urban areas.
A full methodology document and interactive map is available at www.uk.prosperity.com