The UK’s urban centres are key to driving up economic and productivity growth. However, many post-industrial towns and cities are underperforming. In this article, Dr Marianne Sensier, Kate Penney and Michael Francis from The Productivity Institute, describe their findings from a place-based study of Rochdale and explain what the government and metro mayors can do to drive productivity growth and living standards in their regions.

• Productivity and wages in Rochdale remain lower than the UK, but since the end of the financial crisis productivity has grown and is catching up to the UK.
• Investment to improve capital assets needs to focus on local job creation, improving transport connectivity and skills investment to break the cycle of low productivity.
• A shared vision around the Atom Valley Mayoral Development Zone needs to be developed so local communities can support future developments and access opportunities.

 Many of the UK’s post-industrial towns suffer from low productivity and wages, and high levels of unemployment and economic inactivity. Private financial institutions looking at these economic data will often choose to invest elsewhere, causing a negative feedback loop where these towns fall further behind.

To determine how best to end this vicious cycle, The Productivity Institute launched a campaign, Investment in Productive Places, to work with towns and cities to develop a broad-based investment strategy for place-based productivity. Here we describe our key insights from our pilot study for Rochdale.

To realise the ambitions of Rochdale we analysed the community capitals framework. These capitals include: physical, human, intangible, financial, institutional, social and natural. A community could become stronger by strategically increasing its capacity within each capital. As the flow of assets are interconnected investing in one capital can trigger positive outcomes across the other capitals. Strengthening the capitals is fundamental for implementing the Government’s mission to kickstart economic growth.

Rochdale, one of ten boroughs of Greater Manchester (GM), became a thriving textiles manufacturing town during the Industrial Revolution. Later, Rochdale’s economy transitioned from cotton-spinning to engineering and exporting the technology across the world. Its manufacturing sector contributes the largest value share of GDP and is the third largest sector for employment. The largest loss of manufacturing jobs – during the 1970s-80s – has left Rochdale less resilient to recover from economic shocks.

Investment in Rochdale

As a consequence of historical industrial decline, the northern boroughs of GM have lower productivity than the North West and UK. The GM Mayor Andy Burnham has stated his aim to level up the northern boroughs of GM and key to this was the Atom Valley Mayoral Development Zone in 2022 (across Rochdale, Oldham and Bury). The vision for Atom Valley is to create a dynamic, interconnected manufacturing mega-cluster, blending innovative world-class industry with ground-breaking research and development. The investment is the triple helix model of development, where industry, universities and regional authorities work together to grow higher value jobs in the region with the initial investment of central government funding.

Over time, Rochdale has received a range of government grants and private capital, bringing the total committed investment to £750m. Further funding came from the Shared Prosperity Fund and the Community Regeneration Partnership.

Funding is being directed to building three parts of the Rochdale innovation ecosystem, namely: the Advanced Manufacturing Productivity Institute, The Centre for Expertise in Advanced Materials and Sustainability, and the Made Smarter programme Rochdale base. The Sustainable Materials and Manufacturing Centre will be the hub of the Atom Valley development and is due to be completed in 2026.

Understanding barriers to productivity growth

We conducted a workshop in Rochdale with stakeholders from business, local government, higher education and third sector organisations to discuss the assets within the local economy. This showed that, although Atom Valley will provide high value, specialist jobs, it is also important to offer a career pathway to entry-level workers and across a range of jobs. Without a shared vision and carefully joining up investment, Atom Valley risks developing separately from the rest of Rochdale, with limited productivity or prosperity improvements for local residents.

The workshops also suggested there was a sense that projects like Atom Valley were very future-oriented, while many residents had pressing short-term problems. There is a need for a balanced investment strategy which directly tackles these short-term problems as well as the barriers for long-term sustained development.

Strengthening the capitals

At the intersection between physical and human capital is commuting behaviour. We found that fewer residents used the tram and train at rush-hour than across the rest of GM. Most workers in Rochdale commute by car (38%), with the rest commuting by foot (32%), bus (20%) and train or tram (10%). Despite advancement in the GMCA’s Bee Network, public transport remains a limiting factor for productivity growth. While further connections in the tram system would be beneficial, in the short term, the biggest productivity gains could be made by providing better bus routes to centres of employment.

While there is a high level of social capital across the community and voluntary sector, and anchor and heritage institutions, many parties work mainly within their own circles. To realise the full benefits of public investment, it is important that there is genuine and meaningful collaboration across institutions, not merely awareness of who is who across the region.

On human capital, an increased focus on apprenticeships could improve productivity and provide sustainable employment trajectories for young people locally. As new job opportunities arrive at Atom Valley, training must be provided so residents’ skills align with the demand for skilled labour. Opportunities need to be shared within the local community, particularly by promoting higher-quality and more secure employment prospects.

The 2020 update on the Marmot Review of health inequalities highlighted the importance of access to green space as being key to improving life expectancy rates. Natural capital (such as the extensive moorland), could be better utilised to improve health and wellbeing outcomes. This could be a collaborative action between the public and third sectors working with local residents.

Place-based investment approaches

These lessons can be applied to similar geographies as government and mayoral combined authorities push forward the government’s mission to kickstart economic growth. Indeed, The Productivity Institute has expanded its Investment in Productive Places campaign to other places, including Fermanagh-Omagh, several London Boroughs, as well as Newport, North Lanarkshire, Great Yarmouth, Walsall, Cumberland and South Tyneside.