Disposable income in 11 towns and cities has risen twice as fast compared to the rest of the UK, defying a decade-long slow growth in living standards since 2013.
In areas including Warrington, Bristol, Barnsley and Brighton, residents’ disposable income grew by an average of 5.2 per cent between 2013 and 2023, compared to 2.4 per cent nationally.
The new research, from think tank Centre for Cities, found that if all 63 of the UK’s largest cities and towns matched this rate of growth, residents would have an extra £3,200 on average in disposable income over that period.
The organisation said the government needed to implement policies that strengthen economic growth. It said: “By focusing on tinkering with the symptoms, the government runs the risk of losing sight of the cause. The problem underpinning cost of living pressures, stagnant incomes, and persistent deprivation is the lack of economic growth.
“Redistributing slices of the existing pie will not achieve increases in standards of living ‘felt by everyone, everywhere’. Growing the pie is the only way forward.”
It found that the strongest-performing areas had a focus on building a stronger local economy, improving access to work through skills support and improved transport links, and reducing constraints on housing and commercial space.
The top-performing city was Brighton, with a total disposable income growth of 8.1 per cent between 2013 and 2023.
The same 11 cities and towns also experienced economic growth of 27 per cent over the decade, compared to 18.4 per cent nationally, with Warrington having the highest total economic growth at 41 per cent.
It also found that residents from areas where real-terms living standards declined had missed out on substantial sums. Residents of Cambridge, where real-terms disposable incomes declined by 3 per cent in total since 2013, would have been £10,900 better off over the decade if the city had matched the top-performing places.
Centre for Cities chief executive, Andrew Carter, said: “It is understandable that the government has shifted its emphasis onto the cost of living in recent weeks, but ultimately it is stronger economic growth that raises household incomes. Without growth, cost of living fixes can only ever be temporary.
“Nationally, the last decade has delivered the same amount of growth in living standards as we typically experienced in a single year prior to 2008.”
Economic growth in areas like Warrington and Barnsley had translated into higher household incomes and less deprivation, Mr Carter said. He added: “That isn’t accidental: it is shaped by policy choices on skills, transport, housing, and support for businesses.”
He said that cities need to support more jobs in sectors like life sciences, digital and AI. “These jobs cluster in urban areas and generate benefits for those working in the ‘everyday economy’, too,” Mr Carter said.
“As the prime minister has said, 2026 needs to be the year that ‘politics shows it can help again’. The test, at the end of this year, will be whether we are seeing more jobs, higher wages, and stronger local growth in more places across the country.”
The Ministry of Housing, Communities and Local Government has been contacted for comment.
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