Recovery 'widening cities gap'

The UK's economic recovery is widening the gap between London and other cities, with almost 10 times more jobs being created in the capital than the next best area, a new report has warned.

Although London is 'booming', other cities are losing jobs, a study found

Research by the Centre for Cities think tank revealed that London accounted for 80% of national private sector employment growth between 2010 and 2012.

For every public sector job created in the capital, two have been lost in other cities, the study found.

While London is "booming", cities such as Bradford, Blackpool and Glasgow have seen jobs lost in private and public sectors, said the report.

There has also been a significant number of jobs created in private firms in Edinburgh, Birmingham and Liverpool which have helped offset the impact of public sector job cuts.

In the two years to 2012 there were 216,000 private sector and 66,300 public sector jobs created in London, compared with losses of 7,800 and 6,800 in Glasgow, said Centre for Cities.

Other cities where jobs have been created in private companies included Nottingham (8,900), Brighton (6,400) and Aberdeen (4,900), but they were all hit by cuts in public sector employment.

The report said: "London remains the UK's economic power house and is pivotal to the UK's future success."

Alexandra Jones, chief executive of Centre for Cities, said: "The gap between London and other UK cities is widening and we are failing to make the most of cities' economic potential.

"Devolving more funding and powers to UK cities so they can generate more of their own income and play to their different strengths will be critical to ensuring this is a sustainable, job-rich recovery."

Cities minister Greg Clark said: " For Britain to prosper, our cities must prosper. They are the engines of growth for the national economy in a world where cities are increasingly competing against others around the world for jobs and investment.

"That is why the City Deals programme, which began in 2012, has been so important, giving cities more power to drive growth, something from which London has benefited for over a decade.

"The Centre for Cities report uses data up to September 2012, and illustrates exactly what the Government was saying at the time - that it is essential to hand powers over to cities so that they can take control of their own destinies. Since then, the cities have gained momentum.

"In the last two years the UK has created over a million jobs, of which over 750,000 are outside London. City Deals and Local Growth Deals will unleash the potential for cities to stimulate growth and create jobs around the country."

A Scottish Government spokeswoman said: "This report is further evidence that Scotland has strong economic foundations and can more than succeed as an independent country with jobs growth in Edinburgh, the fastest of any city other than London, and Aberdeen featuring in the top 10.

"While these are positive figures for Edinburgh and Aberdeen they demonstrate the increasing inequality across the UK, with London dominating both the public and private sectors of the economy and UK economic policy continuing to putting the interests of London and the south-east of England first.

"Scotland will only be able to provide a real counterbalance to the strength of London, by retaining and building our working age population, securing the additional jobs and investment we need, as well as retaining key headquarters and improving our connections to the rest of the world with the full powers of independence.

"With the full fiscal and economic powers of independence, we can take a different approach to Westminster austerity and do more to support growth across Scotland."

Aberdeen City Council leader Barney Crockett said his city is key to the private sector strength of the UK.

"The city is renowned for successful business start-ups and its strength has been widely remarked on during the past few years, because where many other areas have struggled and watched helplessly as businesses have folded around them, we have seen private firms develop and grow in strength," he said.

"Not only that, Aberdeen has also attracted huge levels of national and international investment, with many major companies choosing to locate headquarter offices and set up new bases here."