Kerry Ferguson looks at seven ‘turnaround' cities and asks what would it take for the UK to reach its economic potential and what local policy-makers can do to help make it happen

Many post-industrial cities face the challenge of reversing long-term economic underperformance and moving towards a positive future. Recently, the Resolution Foundation's Economy 2030 Commission looked at the experience of seven ‘turnaround cities'.

Dortmund and Duisburg in Germany; Bilbao in the Basque country of Spain; Lille in northern France; Newcastle in New South Wales, Australia; Windsor in Ontario, Canada; and Pittsburgh, Pennsylvania, USA have their own unique stories but collectively they point to some key ingredients of successful transformation.

All suffered major deindustrialisation, leading to job losses and de-population. But over the last 20 years their fortunes have improved and they now outperform their national economies in key metrics such as unemployment, labour market participation and productivity.

None of the cities are capitals, nor are they very large conurbations. They do not receive priority attention from their national Governments, yet they are renowned as places that purposefully worked to ‘turn around' their prospects by developing better governance and institutional arrangements for private sector investment.

This is relevant for the UK, as our ‘second-tier' cities' economies lag behind the national average performance; they are also less productive and less competitive than their peers in Europe.

According to Core Cities UK, bringing the UK's 11 biggest cities outside London up to their European counterparts could add £100bn (around 5%) to GDP each year, lift 250,000 people out of unemployment, 1.2 million out of poverty and increase healthy life expectancy by up to eight years.

Those seven turnaround cities have several success factors in common; considered in a UK context, they reveal obstacles and opportunities for urban local government.

It is no accident that all seven examples are from countries with highly devolved resources and decision-making. The turnaround strategies were locally-driven but involved joint working between different tiers of government, including regional or state administrations.

In the UK, decision-making is unusually centralised at national level and there is no regional tier. In England, the Government's preferred devolution model of mayoral combined authorities have pushed for, and gained, new powers over time but they still have little power or funding compared to the turnaround cities. Progress is slow and at the behest of central Government.

All seven cities benefited from substantial, long-term public funding. UK Government funding tends to be piecemeal and short-term. Over the last 40 years, UK expenditure on regional economic development never exceeded 0.2% of GDP.

Germany spends four to five times more and targets its weaker city regions. Sustained public funding has unlocked even greater private investment in the turnaround cities, whereas the UK's inconsistency and short-termism risks undermining investor confidence.

Clear and coherent land use and spatial planning provided the certainty investors need. The UK's planning system lacks coherence, is adversarial and resistant to reform. Outside of London and the devolved nations there are no regional spatial plans. Most local planning authorities have no up-to-date local plan. This would be unthinkable in other successful, densely-populated countries.

While the UK's structural and institutional context makes regional development more difficult, we can take some positives from the turnaround cities.

A comprehensive approach to local economic strategy worked best. It is not just about R&D and infrastructure, but skills, access to finance, business support, liveability and place-shaping.

Cities were able to reverse decline by convincing businesses and residents to stay and shape a better future, and by attracting new investors, jobs and workers. This is encouraging because much of what makes a place liveable is within the remit of our local councils.

Success tends to build on a city's existing economic assets rather than trying to attract new industries for which the requisite conditions are lacking. Local areas should focus on their strengths, which may be rooted in their industrial past. A deep understanding of the local economy and business eco-system needs to be central to local plans and projects.

The turnaround cities each found ways of building coalitions between public bodies, private sector, investors, civil society and universities. They worked hard on local engagement, led by the public sector. UK local authorities have long played this vital role, improving local areas through partnerships despite the constraints of a centralised system. These cities would not claim to be perfect, but are on an upward trajectory and demonstrate what can be achieved when sub-national Governments and cross-sector partners come together around a shared vision and long-term strategy. The convening power of local leadership has been instrumental in getting policy and funding aligned and pulling in the same direction.

Kerry Ferguson is a research consultant and writer on public policy

This article is based on a full briefing published by the Local Government Information Unit. https://lgiu.org/newsletter/archive/global-local-turnaround-cities/