Tomorrow’s autumn statement promises to spell out more gloom for the UK. The economy continues to contract and there are reports that the chancellor Jeremy Hunt will raise taxes and cut spending by £50 to 60bn. The inflation rate for October is due to be published the day before and is expected to rise to around 11%.
Among the UK’s major cities, Sheffield is already faring worst on some measures. Decades of structural change and government neglect have left the city particularly ill-equipped to face another round of austerity.
Public spending cuts in a public sector city
Sheffield is England’s fifth largest city and is still often referred to as the ‘city of steel’. Yet Sheffield’s industrial past is, in many ways, well and truly behind it. Though steel, especially high-end production, is still very much a feature of the city’s economy, it is no longer its bread and butter. If anything, Sheffield is now the ‘city of the public sector’.
Today the NHS is Sheffield’s largest employer (in terms of the number employed), accounting for 15.6% of jobs, whilst manufacturing accounts for just 9.5%. Overall the public sector provides around a third of all jobs in the city, according to the Centre for Cities, with the two universities and the council providing the bulk of jobs outside the NHS.
In normal times this would make Sheffield incredibly vulnerable to any cuts to public spending. But remember, this is on top of years of austerity measures that have affected all cities, albeit some disproportionately.
South Yorkshire’s mayor, Oliver Coppard, speaking at Sheffield University’s Political Economy Research Institute annual lecture, reminded us that the average northern city saw a 20% cut to public spending from 2010-19, compared to an average of 9% in the South. (Barnsley saw the largest reduction in funding for services of any metropolitan area in the country, at 40%.)
Addressing the discrepancy, Coppard said, “a lop-sided political economy in the UK is a choice, not an inevitability”. One way to fix that going forward is to free ourselves from a nationally set legislative framework that imposes a straitjacket on what we could achieve locally.
Government failure on rail links
The scant attention Sheffield is receiving from this government does little to ease the growing frustration of the city’s politicians. Over the weekend the leaders of Leeds and Sheffield councils lamented the failure to provide the high-speed link between Sheffield and Leeds that the government promised a year ago.
Together the two cities make up one of the three biggest regional economies in the UK outside London, supporting two million jobs and 175,000 businesses, with an annual gross value added (GVA) of £96bn and a gross domestic product (GDP) of £50bn. And yet the existing rail connectivity is exceptionally poor.
“Delivering stronger connections between Leeds and Sheffield will allow our economic centres to finally function more like a single economy, encouraging agglomeration and knowledge transfer between industry and academic institutions – improving our productivity and enabling us to compete globally alongside some of the world’s leading cities and regions.”
Unequal arts funding
On Sunday, Sheffield MP Clive Betts added to the growing sense of the city missing out by demanding to know why Sheffield is receiving just a fraction of the money the Arts Council is awarding to other northern cities.
According to The Star, for 2023-26, Manchester was awarded seven times more in grants than Sheffield, when population is taken into account. Manchester’s £24.5mn amounts to some £44.41 per head, while for Sheffield the total is £3.47mn, a mere £6.23 per head. Leeds received nearly six times more than Sheffield, with £35.65 per person (£28.9mn in total).
Sheffield is not unique among UK cities in having concerns about its prospects, but its workers are particularly badly placed to face the coming challenges.
In 2017, Sheffield was named the low-pay capital of the UK. This is supported by analysis by Tom Forth, CEO of the Data City. He analysed GDP per person data for allOECD cities in The EU and UK with more than a million residents. This graph shows the results.
Strip out London and it makes for grim reading, especially if you live in Sheffield. It paints a picture – pre-pandemic – of British cities far behind most of their European counterparts. Sheffield, at the time, ranked last in the UK.
To this we can add the havoc caused by Covid, the effects of which were Europe- and worldwide, and the increasingly acknowledged economic damage of Brexit, which belongs to the UK alone. Neither has made the city’s prospects any brighter.
The coming winter
Put all this together – industrial decline, neglected transport links, unequal funding, low pay, the old austerity and austerity yet to come – and it adds up to one thing: people in Sheffield face a miserable winter.
In response to the cost-of-living crisis, Sheffield City Council has created a package of support for anyone facing financial hardship, which is somewhat ironic given that the council themselves are struggling to balance their books.
Hunt has choices he can make on Thursday. It is not a given that he has to balance the nation’s books in a year (which government ever tries to do that in reality?). Nor does he have to cut public sector pay in real terms in order to protect pensioners.
This is a government that found £35bn for PPE and related Covid measures that turned out to be largely redundant, a government that – briefly – thought we could afford tax cuts, not tax rises.
It doesn’t have to be like this on Thursday. These cuts are not the only thing at the chancellor’s disposal. But if cuts are what he chooses, the damage he will do is a grim certainty, to Sheffield, its people, and to people in cities and towns all over the country.