It's Christmas Time

.. and I am off on holidays for a couple of weeks. Back to all things spatial in the New Year.

I hope you enjoy your festive season.

Congestion charging

Manchester voters have overwhelmingly rejected proposals for a congestion charge.

There have been some suggestions that the problem was the particular scheme that Manchester was proposing. I haven't been following the details, but I have a sneaky suspicion that this may not be the root cause of the problem. Just take a look at the furious public response to Eddington's suggestion for national road pricing (nearly 2 million people signed an online petition against the idea).

Most experts agree that charging is the best way to deal with the problem of traffic congestion. When people decide how to make a journey they weigh up their personal costs and benefits of different ways of travelling. Unfortunately, choosing to travel by car also imposes costs on other people, but we ignore these costs when making our decision. The end result is too many car journeys. If only we could find a way to get each of us to take in to account the cost that we impose on others when we decide to drive by car. Congestion charging does this, while still leaving people free to choose how they travel.

Lined up against this are terribly emotive arguments around our right to travel, the effect on the poor and the impact on specific businesses. These are all far easier to sell than the economists argument about large overall benefits outweighing any of these specific costs. Somehow, we need to convince the public that the latter really is the case. Sadly, the result in Manchester suggests we still have a huge way to go.

Changing UK

The BBC are focusing on geographical segregation. Lots of pretty maps show how areas of the UK differ in terms of health, wealth, ethnic composition, political engagement etc. You can even see how the geography of "loneliness" is changing. On a wide number of indicators areas of the UK are becoming increasingly different. The tone of the coverage suggests that this is all bad news. Is it?

According to the maps, areas in the south seem to generate higher incomes than areas in the north. Surely that's bad? But it turns out that the south has also seen the largest population growth. So population is growing fastest in areas that offer the best economic opportunities. In terms of individuals, doesn't that sound like a rather good thing?

Let's take another example. It would take 4,289,377 people moving home to make the geographical distribution of age even across the country. But are unequal age distributions a bad thing? There are clearly rather large benefits to having families with children spatially concentrated in one area, while young workers live elsewhere (the former want good schools, the latter good night clubs and spatially separating schools and night clubs is generally good not bad).

What about "loneliness"? You are loneliest if you are non-married, live in a 1 person household, have moved within the last year and are renting privately. Let's set aside the issue of what you are actually capturing here and imagine that you fit that category. Are you better or worse off living close to people who also fit in that category? There seem to be good arguments why spatial concentration might on balance be a good thing (imagine for example that you were hoping to change your non-married status - isn't that easier to do when surrounded by other non-married people).

These maps are a nice description of what is happening in different areas. But they are not an analysis of the benefits and costs of the resulting segregation. Because people are different, places will tend to be different. Whether this is good or bad depends on whether the composition of a place actually has any direct impact on the well being of individuals who live in that place. These maps can't answer this question, so they tell us something about who is living where, but not whether this matters.

Response to the Sub-National Review

The government published its response to the public consultation on the SNR earlier this week.

Despite the current economic situation, government still needs to make progress on fundamental questions about the future of urban and regional policy. Indeed, for local policy makers, because there is little they can do that will affect the impact of the economic downturn, it is doubly important not to lose sight of medium to long term issues.

So, then, to the SNR. There is more detail on how the local authority economic assessment duty will be implemented and the form that sub-regional collaborative agreements might take. There's also confirmation of the move to integrated regional strategies. As I have discussed elsewhere, these strategies will need to make a decision on the extent to which efforts to deliver regional growth rely on the spatial concentration of resources as opposed to "jam spreading". Sign off by a "local authority leaders' forum" (the original plan) would tend to favour the latter. In the new proposals, a "local authority leaders' board" will have joint responsibility with the RDAs (with disputes resolved by ministers). This will, in principle, allow more concentration and less jam spreading.

From the view point of achieving regional economic growth, current evidence suggests this may make sense. The problem, of course, is that this reduces democratic legitimacy. In the absence of elected regional bodies, squaring that particular circle will require careful thought about how to provide local authorities with incentives to sign up to integrated strategies that concentrate resources. I have talked about this in the past with relation to housing targets. Successfully agreeing (rather than imposing) integrated regional strategies will require far more work to tackle this difficult issue.

SERC launch

Over the last few days, we've held a series of events in London, Swansea and Newcastle to mark the launch of the Spatial Economics Research Centre.

Professor Ed Glaeser, from Harvard University, gave the inaugural SERC lecture on Our Urban Future. If you missed Ed's fascinating talk you can hear what he had to say by listening to the podcast.

If you want to make sure that you don't miss our events in future, then please sign up to our mailing list.

I'm now off to New York for the 55th Annual North American Meetings of the Regional Science Association International. I'll try to post next week on the most recent research findings from this gathering of some of the world's leading urban and spatial economists.

Greener Homes?

The Environmental Audit Committee has undertaken an environmental analysis of the government's house building plans. They published their report yesterday.

Let me comment on a few of their recommendations. First, they question whether the 3 million housing target is justified given current economic conditions. Note two things (i) this is a target for 2020 - unless the recession is very deep and long you wouldn't expect much to change on that time horizon (ii) recent figures suggest that we are some way from meeting this target.

The credit crunch does raise a question about the timing of house building. The report argues that more should occur after stricter carbon targets are introduced in 2016. This may be sensible, but in the absence of government policy to the contrary (a large social house building programme for example?) it will happen anyhow as the housing market turns down.

Finally, there's the issue of the size of new houses and gardens and where we should build them. I'll deal with the issue of green versus brown field another day when I have taken a closer look at the numbers (my back of the envelope calculation translates CPRE's 36,000 football pitches between now and 2020 in to about 1.5% of green belt land in England; and far under 1% of all undeveloped land). For now, just consider the Committee's suggestion that government should stop trying to address people's aspirational demand for bigger houses and gardens because these don't reflect urgent need. That kind of logic works in a centrally planned economy where government allocates housing to people. However, last time I checked, we still allowed people to buy and sell houses freely (even if they are not choosing to do so). If we don't increase the supply of space as the demand for space rises, then the price of space and thus of housing will rise again once the economy recovers. Cue complaints about housing affordability long after the current problems have been forgotten ...

The geography of recession

Conventional wisdom suggests that recessions tend to spread misery around. If this is true, we might expect the "north-south divide" to narrow over the coming months, particularly if sectors over represented in the south (financial services for example) are especially hard hit.

Is the fact that it's about to get "grim down south" likely to lead to a fundamental shift in the economic geography of the UK (as appears to be suggested by some commentators)? I'd make two points. First, this kind of discussion confuses changes with levels. A couple of quarters of negative growth will certainly be highly unpleasant for large numbers of people. A higher proportion of those directly affected may indeed live in the south. But these kind of changes still wont be enough to eliminate the gap in income levels. You would then need the working of the economy to reinforce these initial changes. But theories of economic geography tell us that it can take very large shocks to fundamentally alter existing geographical differences.

That brings me to my second point. Although there is some academic debate on this, the south was probably unusually hard hit in the early 1990s recession as well. A different shock, may be, but it reminds us that we have been here before and that the south is very capable of bouncing back from recession.

Overall, a fundamental long run shift in the economic geography of the UK is not impossible in response to the credit crunch but it does appear to be unlikely.