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Small towns are the key to a stronger economy and a more cohesive nation

Subtley, in recent decades Britain has transformed. Our towns and cities have become, as the academics Will Jennings and Gerry Stoker put it, two England’s, with increasingly different views and priorities. This widening gulf was most starkly illustrated by Brexit but the differences go much wider on a range of social attitudes on issues from immigration to civil rights and political differences too.

The roots of this lie in changing demographics. As our cities have grown younger over the last 25 years, our towns and villages grew older. Between 1981 and 2011 our towns and villages lost over a million people under the age of 25. In contrast, the core cities gained 300,000. Over the same period, the number of over 65s in our towns grew by over two million.

Cities continue to serve as magnets for young people from towns looking for education and work, many of which choose not to return home. Two decades ago old-age dependency was virtually the same for towns and cities. From the 1990s onwards they have diverged, our towns getting older whilst our cities get much, much younger.  It has left towns at the sharp end of the social care crisis and the low wage economy. An economic model begun under Tony Blair and pursued with enthusiasm by George Osborne, which sees cities as engines of economic growth, has exacerbated this trend. Without spending power, town centres have hollowed out, pubs, shops and community institutions have disappeared and public transport that relies on passenger numbers has become increasingly unsustainable.

For business, understanding these trend is vital.

officeIf young people with skills and qualifications are increasing to be found in cities where is the supply of skilled labour that leads businesses to invest in towns? If spending power is concentrated online and away from towns, high street stores and banks must close. Only this week research by our newly formed think tank, the Centre for Towns, showed that towns had been hit much harder by bank closures than cities or surrounding villages. Of the 27 banks which closed in the North East, none were in Newcastle. Of the 51 bank closures in Wales, 88% were in small towns.

Allowing this to continue is unsustainable, economically, socially and politically. With Labour’s vote increasingly concentrated in cities and the Conservatives dominant in the countryside, towns will go a long way to determining the outcome of the next General Election. It is a key battleground. Following the 2017 General Election Centre for Towns research showed that just 33,000 extra votes in towns would have handed Jeremy Corbyn the keys to Number 10.

But while regional politicians have increasingly grasped the need to act, national politics is slow to catch up. In Greater Manchester, Andy Burnham has halted a plan to concentrate skilled opportunities in central Manchester and launched a consultation on how to revive town centres. Local government leaders are taking matters into their own hands in areas like energy where town and city leaders, from Rishi Shori in Bury to Nick Forbes in Newcastle are using municipal, community or shared private-public investment to kickstart growth, create revenue streams, develop skills and refound civic pride. Yet we still don’t have anywhere near the resources or political will we need to correct spatial disparities. Our piecemeal devolved administrations, whilst welcome, are either geographically clumsy or held at arm’s length. Consider this: in Spain, the central government is responsible for just 18% of public spending with the autonomous regions delivering the rest. In the UK, the proportion of tax revenue from local government is around 5%. In Germany, it is 40%, the US 36%, Spain 42%, France 13%.

Meanwhile,  national government struggles to catch up. 

This week in Westminster, the Transport Secretary outlined plans for our railways that show the inability of Whitehall to respond. Instead of better connectivity between the great cities and towns of the north and within them, the obsession with connecting core cities to London remains. If we are going to address regional and sub-regional disparities central government needs to devolve such decisions and the architecture that goes with it, or it should expect the rest of the country to despair at how little it understands their needs.

Thankfully, the reality of different economies at work within the regions, coupled with the development of regional Mayors and a willingness to co-operate across local government, is bringing about change. Increasingly the world’s Mayors and regional leaders are working together much more closely on areas like energy and climate change, bypassing national government altogether.

Whether they succeed will determine whether we can become a stronger, more cohesive, less polarised country with an economy that delivers for the majority of us. In recent decades we have seen a dramatic rise in both Scottish and English nationalism, a strong reassertion of local and regional identity and a growing feeling in towns across Britain that politics is unresponsive. When asked, 68% of people in towns felt politicians didn’t care about them or their area, significantly higher than the 53% who felt the same in cities. That cannot go on. With so much at stake, politicians must rise to the challenge of speaking for our towns, villages and our cities or suffer the consequences at the ballot box.

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