After the last of three waves of new towns were designated, the British new towns project essentially halted in the late 1960s – until now. Government have placed the serious development of new towns firmly back on the agenda with the establishment of a New Towns Taskforce (NTT). In this article, Professor Mark Baker, Sui Zhang and Professor Cecilia Wong explore the performance of existing New Towns and impacts on economic growth.

• Although government strategy plans to expand and establish several New Towns, the performance of existing new towns has been under analysed for decades.
• Research from The University of Manchester examines the social-economic impacts of New Towns including deprivation, housing prices and productivity.
• New Towns should be planned within a strategic context with employment opportunities and labour market skill needs prioritised.

The return of new towns

The Taskforce’s report to government, published in September 2025, identifies an initial twelve potential locations covering not only standalone new towns but also the planned expansion of existing towns and cities “where a new, well-planned and well-connected, community of scale could meet housing need and contribute to the drive for economic growth”.

The NTT report highlights the need to recapture the ambition of the previous waves of new towns and lessons to be learned from them. However, although there has been ad hoc research, mainly involving case studies, the last 25 years have lacked comprehensive study of the social-economic and environmental impacts of new towns.

Indeed, the 2002 Transport, Local Government and the Regions Committee commented that “An evaluation is urgently required which identifies both good practice and mistakes before any new major new settlements are considered…”.

Index of Multiple Deprivation and house price analysis

Based on the latest English Index of Multiple Deprivation (IMD) in 2019, our research at The University of Manchester systematically and statistically tested the performance of the 20 existing new towns with their immediate neighbouring areas on the scores of the overall index and its 7 identified socio-economic and environmental domains.

The positive message is that for the ‘Living Environment’ domain, new towns were found to be significantly less deprived than their surrounding areas. No major difference was found in the performance on the ‘Barriers to Housing and Services’ and the ‘Crime’ domains. Given that the new towns were built with the remit of providing decent and affordable homes to the population, this mission would therefore generally seem to have been accomplished.

When exploring wider socio-economic dynamics, their performance is less successful than their neighbours. New towns are found to be significantly more deprived in the ‘Income’, ‘Employment’, ‘Health Deprivation and Disability’ and ‘Education, Skills Training’ domains. Broadly – when examining the Overall IMD Index, new towns generally fair less well than their neighbouring areas.

We also examined median house price levels of all the new towns at various points between 1995 and 2021, comparing these price levels with areas surrounding the new towns. Results show that throughout six time-points, house prices within new towns are significantly lower than those in neighbouring areas. This may be expected as the new towns were explicitly planned to provide significant levels of public sector and affordable accommodation.

South-East vs the rest of England?

We explored the narrative that new towns in the South-East outperform well those in northern England. We drew on a recent study involving labour productivity analysis of local authority districts (LADs), such a north-south divide can largely be confirmed, though a few South-East and North-West new towns do perform at similar levels to each other.

Over a third of LADs in England were found to have a vulnerable labour market and low labour productivity levels. LADs with new towns sharing these characteristics tend to be found in the North and the Midlands (e.g. Newton Aycliffe, Skelmersdale and Corby). Although sharing similar structural features, Basildon in the South-East has a healthier labour catchment, a more resilient labour market and average labour productivity levels.

At the other end of the spectrum, new towns adjacent to London tend to have high levels of information and communication (IC) employment. In the case of Welwyn and Hatfield, they have a moderate financial sector as part of a relatively favourable industrial mix benefitting from some spatial spillover effects, resulting in high pay and productivity. Very high productivity levels are found in Bracknell, related to its strong spatial agglomeration effects.

Of the previous waves of new towns, Milton Keynes stands out from the rest as one of England’s best performing LADs in terms of labour productivity, with a high concentration of IC, financial employment and high pay levels.

Perhaps in recognition of this distinct north-south divide, wider housing needs linked to current house prices and house price to earnings ratios, NTT’s identified new town locations have a clear southern bias with only Adlington in Cheshire and planned large scale (re)development of parts of Manchester and Leeds in northern England.

Policy implications – planning for housing and the economy

The NTT’s proposed new towns differ from earlier waves, with a strong economic growth objective beside affordable housing supply. The term ‘new towns’ is broadened, covering urban extension and urban renewal. Meaning the actual delivery will require very different approaches for different types of new towns.

Our analysis of earlier new towns highlights that, whilst provision of better housing and environmental quality was achieved, their broader economic and social outcomes were more mixed with weaker performance than their surrounding areas, suggesting a lack of spatial and functional integration of the new towns as urban spillovers. Emphasis must be given to education and health; domains where previous new towns underperformed. Given the explicit growth objective, there is a need for them to be clearly situated within their wider spatial development context.

The inclusion of sites more akin to traditional urban extension and urban renewal can help address the issues of transport connectivity and efficient use of land. However, delivery must be carefully choreographed.

As the construction and building of housing and infrastructure is likely to cause upheaval and inconvenience to residents and transport users, there is a need to demonstrate that there are benefits to them. Successful delivery will hinge on strong place-making thinking of improved connectivity across the wider area beyond new towns to optimise the use of quality amenities. Government cannot apply a simple formulaic approach to calculate the supply of new amenities and infrastructure – there is a need to consider the existing offer and surrounding neighbours outside designated new towns to provide more integrative planning.

Regarding greenfield development of traditional new towns, the challenge will be their environmental impact as well as transport connections. While a site may have access to a rail station, the crux is whether there is capacity in often already congested rail networks to accommodate increased frequency of train service to support the extended communities to access job opportunities.

Recommendations to establish governance mechanisms (such as development corporations and Mayoral-led mechanisms) are helpful as are proposed changes to compulsory purchase extending powers to remove ‘hope value’ and facilitate greater land value capture as set out in the Planning and Infrastructure Bill.

Place-making is about joint-up thinking – new towns cannot be successful without integration into wider spatial structures, incorporating new and existing members of the evolving communities. Government must ensure proper planning within a strategic context and appropriate governance arrangements focussing on high quality connections to job opportunities and consideration of labour market skill needs.

For the first time in over half a century, new towns are back on the agenda. We urge the need to utilise research and learn from previous new towns and urban extensions to inform the achievement of future housing and economic objectives.