The future of devolution is in the hands of half a dozen ‘first generation Metro Mayors’

Published on Incomes and Inequality

In less than 200 days some of Britain’s largest city regions will go to the polls to elect ‘Metro Mayors’. Unlike many other mayors across England, they will wield new powers that affect large areas and populations. Whether or not Metro Mayors are a success will depend on whether this first generation of new civic leaders are able to tackle the entrenched problems of Britain’s major cities.

There will be huge pressure on these individuals to perform. Although there is public support for mayors to wield more powers than local leaders currently do, there is also a distant lack of enthusiasm or awareness of the upcoming elections. This could easily turn into outright hostility, not least because a majority of areas rejected mayors in 2012.

To overcome this mayors will need to create measurable positive change in their first few years in office. And there is a lot to do. Although many people think that cities are the engines of growth, our research (which looked at ten of England’s largest city regions, along with Cardiff and Glasgow) shows that in most of Britain’s major city regions earnings, employment, and incomes are lower than in the rest of the country.

Workers in Britain’s major cities are paid less than their counterparts in the rest of the country. Pay is lowest in the Sheffield city region, where the average worker earns around £1 an hour less than in the rest of the country. Yet Sheffield is not alone. London is the only city in which earnings are significantly above the national average. This means that cities will benefit most from the new National Living Wage as it rises incrementally up to 2020. But it also presents a huge challenge for getting people off the wage floor and into better paid jobs, particularly in cities like Nottingham where around 1 in 5 workers will be earning the legal minimum wage.

Perhaps even more so than pay the jobs market varies widely between cities. The employment rate in the West Midlands is 13 percentage points lower than that in the West of England – despite Birmingham and Bristol being less than 100 miles apart. The UK may have record employment – but it’s not being shared equally between cities, and some are missing out altogether.

Even more striking are the job inequalities within city regions. In Manchester, Trafford has an employment rate of 79 per cent – a 16 percentage points higher than Rochdale. There’s much talk about Manchester’s renaissance but it’ll soon feel hollow if the gains aren’t spread throughout the city and its surrounding areas.

To address these inequalities city leaders will have to improve the employment prospects for groups that tend to be more disadvantaged in the labour market. This includes disabled, BAME, low-skilled and young workers who are less likely to be employed and whose employment rates vary dramatically between and within cities. For example barely a third of workers with disabilities in Liverpool are in employment, whereas over half of workers are in the West of England. Single parents in Coventry are almost 50 per cent more likely to be in work compared to those in Walsall.

So what’s the prize for tackling these inequalities? Closing the gaps between cities would mean a city employment boost of over 500,000. But the even bigger prize lies with closing the gaps within cities – a successful inclusive prosperity agenda could yield another 750,000 jobs.

This would have a dramatic effect on Britain’s cities. As the chart below shows, it would mean Birmingham – our second city – being lifted off the bottom of the city jobs table. Closing Manchester’s stark inequalities would take it from a mid-table sleeping giant to the top of the city jobs table, overtaking Bristol and the West of England metro area in the process.

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The challenges that city regions face are significant, but so are the opportunities. Spreading prosperity more evenly, raising overall employment rates, tackling low pay and boosting employment for disadvantaged groups should be at the top of each new mayor’s respective to-do list.