Victoria Wood’s comments on Radio 4’s Today Programme this morning will provoke a few angry letters. She has noticed, she says, that the audiences in the big provincial cities are quicker and more sophisticated than those in small towns and country areas. She specifically mentions the vibrancy of Edinburgh, Glasgow, Manchester, Nottingham, Birmingham and Sheffield.
Whether she is right or not, a lot of employers I have spoken to share her views. For example, a couple of years ago, I was talking to an HR director in a company that was planning to shift most of its operations, and possibly even its HQ, away from the south-east. It already had sites around the country including one in a big city with a vibrant centre (let’s call it HubCity) and another in former smokestack single-industry town (let’s call it Coketown). The HR director explained the dilemma to me:
We need to get our operations out of the south-east. We should have done it years ago. The property costs and wages are killing us. Expanding the HubCity office looks like our best option. Wages are lower and property is a lot cheaper.
“But surely salaries and property costs are even cheaper in Coketown,” I replied.
Well they are but we just can’t get the quality of people in Coketown. HubCity has two universities and a lot of colleges. The people are just better educated, more sophisticated and come with a better attitude.
We have tremendous problems in Coketown. The older ones were used to working in industrial plants and even the younger ones who didn’t seem to have inherited the same attitudes. Coketown has huge social problems and people bring them into the office. We spend a lot of time trying to manage those problems. By locating ourselves in the middle of all that, we’ve taken on lot of aggro that we didn’t anticipate.
In short, the HR director was saying that the company could cut its costs by moving to a large provincial city but beyond that, it was into diminishing returns. The extra savings from low wages and property costs in Coketown didn’t make up for the difficulty of getting skilled workers and the problems involved in managing the ones they already had. HubCity was, therefore, a much more attractive option for relocation than Coketown.
This goes some way to explaining why the prosperity brought about by the regeneration of the big cities has not spread into the towns around them. Shiny new urban developments like Newcastle’s Quayside, Liverpool’s Albert Dock and Manchester’s Salford Quays convey an image of wealth and sophistication but not much of it rubs off on the surrounding areas. You don’t need to travel too far outside the major cities to find grim towns with boarded up shops and tinned up streets, in what were once thriving industrial areas.
This report from the European Commission’s IDELE programme notes:
These sorts of regions tend to suffer the problems that go with intractable unemployment and economic restructuring. There is a generally slack demand for labour but, as new sectors emerge, many also exhibit skills bottlenecks in emergent service sectors. Unemployment and social exclusion dominate the policy agenda, with a constant drive to establish new economic sectors that can take up the excess labour supply. They often contain pockets of long-standing high unemployment especially among young people and older men. Poverty and social exclusion, housing blight and other forms of deterioration in the living environment and urban fabric are widely observed features of these sorts of regions.
Their skill pools have been rooted in the traditional industries – leaving older but potentially active workers exposed to exclusion in the face of an inability to adapt in the face of change.
And employers think, ‘Stuff it. I’m not going to set up amongst all that lot, no matter how cheap the costs are.’ So the situation perpetuates; no investment, no skills; no skills, no investment.
Like Victoria Wood, most companies prefer to play the big cities rather than the small towns. They want quick and sophisticated. The buzzing centres of Newcastle, Sheffield and Cardiff are where it’s at. Someone else can do Merthyr Tydfil, Redcar and Hastings.