Oxford and Reading: PwC’s Good Growth for Cities puts them top
Oxford and Reading are again the highest-performing cities in the 2016 Good Growth for Cities index when it comes to jobs, health, income, skills and business start-ups – with Oxford pulling slightly ahead to top the table this year. The index is produced by PwC and think-tank Demos and is based on pre-Brexit figures.
The fifth annual index measures the performance of 42 of the UK’s largest cities, England’s Local Enterprise Partnerships (LEPs) and the new Combined Authorities, against a basket of categories defined by the public and business as key to local socio-economic success.
Moving beyond a simple measure of gross value-added (GVA), the 10 factors comprising the index include jobs, health, income and skills, work-life balance, house-affordability, travel-to-work times, income equality and pollution, as well as business start-ups (new this year). Overall, more than two-thirds of the 42 cities now score more highly than the 2011-13 average, suggesting that the improvement has been broadly spread across the UK.
As in the 2012-14 Good Growth index, Oxford and Reading score the most highly, widening the gap between them and the other cities in the index. This result is largely driven by the large number of business start-ups within these cities – a new category for this year’s index. Both cities however are beginning to experience the price of success in terms of pressure on housing affordability and work-life balance.
Miles Saunders, office senior partner of PwC in Reading, commented: “The challenge is to make sure that there is scope for future growth. Local authorities and business need to continue to work together to create and maintain an environment that encourages good growth.”
The report also identifies a few elements of the index which are most likely to be materially affected by Brexit.
One element of the index which is most likely to be positively affected is housing affordability. PwC’s most recent Housing Market Outlook projects that house price growth in 2017 will be only around 1% following Brexit, as compared to a pre-Brexit scenario of around 5% growth. On the negative side, most forecasters predict that Brexit will lead to somewhat higher unemployment and slower growth in household incomes over the next few years.
Taking these three elements of slower growth in household incomes, some increase in unemployment, and an offsetting improvement in housing affordability, PwC estimates that average city scores could fall by just over 0.04 as a result of Brexit. This would have a modest but noticeable effect on the overall good growth index, reversing nearly one-third of the improvement in average scores since 2011-13.
John Hawksworth, PwC chief economist, said that though the data predated the EU referendum outcome, some inferences could be drawn: “Housing, jobs and income may see the largest effects. Starting up new businesses, for example, could suffer as a result of increased economic uncertainty. On the other hand, changing trade relations and regulations after Brexit, the shock to the status quo, and the potential opening up of new markets outside the EU could create opportunities for new entrants.”
A copy of the Demos-PwC Good Growth for Cities Index 2016 can be downloaded from www.pwc.co.uk/goodgrowth
