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Can Aberdeen drive the economic recovery?

Posted: 23rd January 2012

Aberdeen has topped a list of cities that are well placed to drive the national economic recovery because of its high number of business start ups, large pool of highly skilled residents and high percentage of patents per population.

Cities Outlook 2012, an annual health check of the 64 largest cities and towns in the UK supported by IBM and the Local Government Association, shows that the gap between places has widened since the recession, with cities with struggling economies falling further behind.

However, it has highlighted five cities that - in the midst of high unemployment, a declining public sector and a reduction in real wages - provide a silver lining to the gloomy economic forecast:

In its report, Centre for Cities calls on the government to invest in cities such as these, which are primed for growth. As these cities grow and create jobs, they will drive the national recovery, it claims.

Sadly, the report also identifies cities that are likely to face real challenges in 2012:

These cities have fewer people with high skills; have more people claiming Jobseekers Allowance and a larger proportion of their total jobs are made up by the public sector. Cities like these are likely to be more vulnerable to rises in unemployment in 2012.

The report says that cities which are facing more "entrenched challenges" will require different solutions and support from government to give residents the skills needed to find jobs and start businesses.

Commenting on the findings, Alexandra Jones, chief executive of Centre for Cities, said: “The year ahead is going to be tough for all UK cities but Cities Outlook 2012 shows that some cities are well-placed to kick-start economic growth. However, some cities have been hit particularly hard by recession and the gap between cities is widening.

“This makes it vital that government policy is tailored to meet the needs of each city rather than one-size-fits-all. What is right for Brighton and Reading will not be right for Dundee and Middlesbrough.

“During 2012 cities should take the lead in shaping their local economies, and the Government should give them the financial and political powers they need to make the right decisions for growth. Where cities face greater social and economic challenges, the government should offer support to help places adapt and respond to a rapidly changing global economy.”

Steven Peel, IBM business development executive, said: “Cities Outlook 2012 highlights the challenges confronting cities today and the widening gap between their ability to respond - both should be a cause for concern and a catalyst for decisive action. Leaders will need to be innovative and bold within their cities to identify and create competitive advantage and drive economic growth.

"The 'Smartest Cities' will be those that have a complete and integrated view of the information associated with city systems such as energy, transport, education and employment - the very foundations needed to stimulate economic development. Those that do will be equipped with insight that will enable them to really understand the dynamics within their cities and deliver targeted improvements in the quality of public services and in the creation of attractive locations for people and business alike.”

Councillor Peter Box, chair of the LGA’s Economy and Transport Boar, added: “The latest Cities Outlook report highlights the significant differences in how our cities are dealing with the tough economic climate.

"Councils strongly support the premise that government policy must be tailored to meet the needs of each individual city, rather than a one–size-fits-all approach. It is vital that local council and business leaders, who understand their cities best, are given the tools they need to deliver growth, create jobs and start businesses.

"Councils have already started the process towards re-energising cities and communities and must now be allowed to go further. Changes to the planning system can help, but the LGA is now calling on the government to localise the running of apprenticeship schemes and the ability to improve transport infrastructure to increase growth further."