South West’s cities among UK’s best performing for good growth

• Three South West cities - Swindon, Exeter and Bristol - rank among top five in the Demos-PwC Good Growth for Cities Index

• Plymouth tops list of most  improved UK cities in the Good Growth Index

• South West cities in the Index generally score highly on health, transport and safety, but less well on income, new business and housing affordability

• Relatively weaker economic growth forecast for most South West cities in 2023 and 2024, due to focus of economies in low-growth sectors: agriculture; electricity, gas, steam and air; water and waste.

Cities in the South West of England have improved on last year’s strong performance in the Demos-PwC Good Growth for Cities Index, with Swindon (2), Exeter (3) and Bristol (4) all ranked within the top five of the largest 50 UK cities. 

All five of the South West’s cities included in the Index were within the top 10. Plymouth, ranked sixth in the Index, is also the most improved city in the UK, and Bournemouth, ranked 8th, performs particularly well on environment, health outcomes and transport.

Plymouth, which was the lowest-ranked city in the South West last year, is the fastest-improving city in this year’s report, largely due to its performance on income distribution, work-life balance and commuting times. Exeter also saw rapid growth, jumping eight places in the Index to third, thanks to strong performance on health, jobs and safety.

But the strong performance against the Good Growth for Cities measures is tempered by expectations for economic growth in 2023 and 2024. The South West has the lowest economic growth forecast of any UK region or nation, due to the prevalence of low-growth sectors, such as: agriculture; electricity, gas, steam and air; water and waste.

Tom Ayerst, PwC’s Market Senior Partner for the South West, said:

“The Good Growth for Cities Index also points to where action would be most effectively targeted. As a whole, cities in the South West performed less positively on the affordability of housing, support for new businesses and income competitiveness - a complex combination of issues that will require long-term thinking to solve. New approaches to devolution are required to enable our cities’ leaders to make the most appropriate interventions for their own markets.”

The Good Growth for Cities Index, now in its 11th year, seeks to recognise that if growth is essentially about improving the prosperity, opportunities and wellbeing of the general public, the focus must go beyond traditional measures of economic success, such as gross domestic product (GDP) or gross value added (GVA). 

The Index covers a list of broad measures of economic factors the public identifies as most important to their work and finances, and which are therefore essential for judging economic success. It then compares the performance of the largest 50 UK cities, plus the London boroughs as a whole, against those measures. The 12 economic wellbeing factors include jobs, health, income, safety and skills, as well as work-life balance, housing, travel-to-work times, income equality, high street shops, environment and business startups. 

The UK picture

The gap between the highest and lowest ranked UK cities in PwC’s Good Growth for Cities Index is narrowing, as the economic wellbeing of the cities at the bottom of the Index has improved at a faster rate than those at the top.

Oxford, Swindon, Exeter, Bristol and Southampton make up the top five cities in the overall Index. Cities in the lower performing end of the Index include London, Bradford, Middlesbrough and Stockton, Birmingham and Manchester. 

Oxford is the top performing city, with a strong performance on economic measures such as income, employment rates and life expectancy helping it to maintain first place. However it is improving at a slower rate than lower performing cities, such as Bradford. While Bradford is at the bottom of the ranking, it is increasing its score more significantly on factors such as skills and income distribution where it performs above the national average. 

PwC’s research shows little evidence of the regional disparity gap narrowing overall and argues that economic progress in levelling-up the UK is too slow. PwC recommends the need for more radical and ambitious devolution of governance and powers to a regional, local and hyper-local level, including greater fiscal flexibility and innovation to help cities respond to their specific challenges.

Karen Finlayson, regional lead for government and health industries at PwC, says:

“While it is encouraging to see the gap between the highest and lowest ranked UK cities narrowing, progress to level up the UK is too slow. Cities should be places of prosperity and opportunity but unfortunately huge disparity remains across the UK, and we are not seeing enough consistent change. 

“To make the progress needed to drive inclusive growth, a more radical and innovative approach to devolution is critical. This is not simply a shift in powers between central and local government, but instead an effective redistribution of accountabilities to the best-placed decision makers at a regional, local and hyper-local level to deliver the best results for places and people.”

Public priorities turn to cost of living

The Demos-PwC Good Growth for Cities Index ranks 50 of the UK’s largest cities (generally considered those with populations of at least 350,000 people), plus the London boroughs as a whole, based on the public’s assessment of 12 economic wellbeing factors, including jobs, health, income, safety and skills, as well as work-life balance, housing, travel-to-work times, income equality, high street shops, environment and business startups. 

As households struggle with the cost of living crisis, they are prioritising financial issues, such as income, jobs and the fair distribution of wealth. However, other public priorities - most likely impacted by cost of living pressures dampening consumer appetite for spending - have fallen, including the strength of the high street and house prices. 

This shift in public priorities has triggered changes to cities’ performances, for example Plymouth takes fifth place this year, rising from 19th last year, performing well on income distribution, work-life balance and commuting times.

Read the report in full here: www.pwc.co.uk/goodgrowth