The UK Regional and Urban Agenda:
Today’s Realities and Tomorrow’s
Challenges
Philip McCann
Insights emerging from the book
The UK Regional-National Economic Problem:
Geography, Globalisation and Governance, 2016,
Routledge, 566 pp
ISBN: 978-1-138-64723-7
1
The reality of the UK regional and urban
problem: A regional problem
• Is a regional problem, overlaying urban issues
• The problem direction is regional to urban, not urban to
regional
• The problem is primarily due to the differential regional
impacts of globalisation
• UK regional imbalances are NOT:
– A geography of education problem; or a spatial ‘sorting’
problem; or an urban economics or a New Economic
Geography problem; or a city-size problem: or a problem
of land use planning constraints
• Internally the UK is interregionally decoupling,
dislocating and disconnecting
2
The reality of the UK regional and urban
problem: worst in OECD
UK Interregional problem is
the worst in the OECD
London and hinterland is
decoupling from the rest
UK is diverging, dislocating and
decoupling into 3 different
economies
- London + SE, E, SW
- Scotland
- WM, EM, NW, YH, NE, W, NI
3
The reality of the UK regional and urban
problem: also a governance problem
• UK regional imbalances also secondarily a governance
problem
• UK centralised/top down governance systems unsuited to
addressing the economic geography of globalisation
• Also, more typical of developing or recently industrialised
nation
• Other advanced economies have better adjustment
mechanisms
– Federal systems (USA , Canada, Germany, Austria, Australia,
Belgium)
– Or bottom-up centralised systems (Nordic countries, The
Netherlands)
– Or rapidly decentralising countries with enhanced intermediate
governance (France, Japan)
4
The reality of the UK regional and urban
problem: with two economic systems
• Two different economic systems - The Economist 30.11.2013
analogy of co-existence of rugby league and rugby union
• Ostensibly the same …BUT… different rules, different rewards,
different playing field, different institutions, different teams,
different audience, different culture, different geography
5
The reality of the UK regional and urban
problem: shaped by perceptions of London
An issue of perceptions – UK economic narratives
overwhelmingly shaped by the experience of London +
hinterland – not by the UK as a whole
… is the UK dynamic or stuck?..
…is it fast or slow?......
….is it overtaking or not?
UK is only an average economic performer by both EU and OECD
standards – because almost exactly half of the UK
underperforms to the same degree as half of the UK over
performs
– comparisons with Germany and USA
6
The reality of the UK regional and urban
problem: shaped by impact of globalisation
• The causes of dislocation and decoupling relate primarily to
the different UK regional impacts of globalisation
• London and the rest of the UK are totally different in
magnitude of investment capital, human capital, social capital,
and infrastructure capital
• Driven by London’s global city status and role in the era of
modern globalisation
7
UK Regional and Urban Agenda: Today’s
Realities: uni-directional to London
….but internally within the UK these connectivity and capital
flows are largely uni-directional …….
… with little or no spillovers or linkages
between London + hinterland and the rest
… rather than being multi-directional
…. to all regions
Policy mistakes compounded by..
• ‘Jam spreading’ analogy
• London as a motor or engine for the whole of the UK
with spread effects cascading
across the whole country
• London as a ‘dark star’ sucking in
resources from all of the UK
9
Tomorrow's challenge for UK’s Cities and
Regions: Lots of reforms … but…?
Tommorrow’s challenge for UK’s Cities and
Regions: top down and horizontal failure
• UK almost uniquely faces both a top-down governance failure
and also a horizontal governance failure
– Top-down failure is a
capability/enabling/mobilisation/engagement problem
– Horizontal failure is a coordination and representation
problem
• The EU referendum and the Scottish independence
referendum both reflect a geography of fundamentally
different social and political perceptions, shaped by
differential regional impacts of globalisation
• Post-Brexit shocks - most UK regions are 2, 3 or 4 times more
dependent on EU markets than either London or Scotland
• Disconnection: Most pro-Brexit regions are also the most
dependent on EU markets
11
16,0%
Leicestershire, Rutland and Eastern Yorkshire and North
Northamptonshire Cumbria Lincolnshire
Gloucestershire, Wiltshire and
Lancashire
Bristol/Bath area
Hampshire and Isle of Wight
Herefordshire, Worcestershire
and Warwickshire Dorset and Somerset Kent
14,0%
Shropshire and Staffordshire
Cheshire
12,0%
% region's GDP exported to the EU
North Yorkshire
Devon
Essex
West Yorkshire
Lincolnshire
Greater Manchester Derbyshire and Notts
Berkshire, Bucks and Oxfordshire
West Mids East Anglia
South Yorks
Northumberland & Tyne and
Bedfordshire and Hertfordshire
Tees Valley and Durham
Wear
Cornwall and Isles of Scilly
Surrey, East and West Sussex
South Western Scotland
Merseyside
10,0%
8,0%
Outer London
6,0%
East Wales
North Eastern Scotland
West Wales and the Valleys
Inner London
4,0%
Eastern Scotland
Highland and Islands
R² = 0,4739
2,0%
0,0%
30
35
40
45
50
% voting to leave the EU
55
60
12
65
13
Tomorrow’s Challenges for UK’s Cities and
Regions: Change narrative
• Need to shift over time from an urban and local policy
narrative to include regional-urban-local narrative
• Why? The UK economic geography problem is fundamentally
a regional problem, with embedded urban and local problems
• Over-centralised UK is neither close to being an optimal size
(of a nation) nor is it close to being an optimal currency area
• Top-down, centralised and space-blind governance is:
– Effective where internal variations are small (high
homogeneity), and
– Largely ineffective where there is high internal (and
interregional) heterogeneity
14
Tommorrow’s challenge for UK’s Cities and
Regions: Governance coordination
• The city-region devolution agenda along with the devolved
administrations, needs to be the first part of the long-run
place-based agenda for addressing the UK’s top-down
governance failure
• There are clear objectives of devolution:
– To facilitate local institutional alignment
– To improve local governance coordination
– To enhance local innovation and entrepreneurship
– To foster social capital, trust and accountability; by
mobilising local stakeholder engagement and building on
local knowledge
15
Tomorrow's challenge for UK’s Cities and
Regions: Core-periphery-problem
• Devolving a highly unbalanced urban system →
…. risks the danger of ….
← governance fragmentation ….
…leading to opposing incentives
…. and interests →
• … and national governance problems ↓
• …unless there is a workable equalisation/stabilisation formula
• The UK economic geography problem is likely to be
exacerbated by Brexit
Tommorrow’s challenge for UK’s Cities and
Regions: Rethink and learning lessons
• Institutional restructuring and spatial rebalancing MUST go
hand-in-hand
• Need to move away from an overly ‘space blind’ and topdown/centralised policy logic and also away from an overly
monocentric spatial and institutional system
• The city-governance/mayor ‘lessons’ from the USA, Canada,
Australia etc. are of limited relevance for the UK. Why?
Because of the federal structure and different geographical
scales
• London-New York comparisons not helpful or meaningful
either because of their relative sizes
• Need to learn many more lessons from other EU countries,
which are much more comparable on many dimensions
17
What is new about my policy prescription?
• There needs to be a wholesale restructuring of the
relationship between local, regional and national policy
• We need to move towards much more of bottom-up and
place-based policy logic and away from top-down processes in
many arenas of national policy-making
• Devolution should result in more tailoring, engagement and
coordination between places rather than more fragmentation
• Need to aim for…. so as to achieve…. and to avoid at all costs
↓
↓
↓
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What is new about my policy prescription?
• UK needs a fundamental constitutional rethink: including the
four nations and the regional and urban dimension
• The economic geography of the UK means that present
devolution agenda to devolved nations and city-regions needs
to be the first stage of a much more fundamental
reconfiguration of the whole UK state
• A wholesale re-think, re-design and re-introduction of UK
regional policy systems and interregional fiscal equalisation
formulas – post Brexit and post-Barnett – due to loss of EU
Structural Funds and Scottish devolution/independence
• There needs to be a long-term move towards something more
like a genuinely federal structure, but at the level of the 12
large UK regions, not just at the level of the four constituent
nations or the city-regions
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To Find Out More….
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