Peterborough has a crucial role to play in the East's economic growth
Peterborough is the largest of seven cities in the East of England, with a diverse population of over 200,000. The population is growing with a slightly younger demographic profile in comparison to the UK and Eastern region - 40% of the population aged 29 and under compared with 37% in the UK and 35% in the East – and a lower proportion of people aged 65+.
Prior to the pandemic, Peterborough had one of the fastest growing local economies in the UK. With a retail catchment of over one million, job density of over one job per working age adult (1.05 compared with 0.85 in the East and 0.84 nationally), and good connectivity (by road and rail to Cambridge and London), Peterborough is an important source of services and employment for people far beyond its city boundaries.
The largest employment sectors include retail and wholesale, transport and storage, accommodation, and food services, which are predominantly lower skilled. However, in recent years, Peterborough has emerged as an increasingly innovative economy and is now among the 15 cities with the highest number of business start-ups and patents in the UK. The move towards more, knowledge intensive industries can also be observed when looking at the makeup of its industrial structure, with five high performing business sectors including – advanced engineering & manufacturing, agri-tech, food & drink, digital & creative, energy & environment and financial services.
Growth in economic output (GVA: £6,607m in 2018) is above the regional and national average, while economic activity rates (79.5%) and productivity (GVA per hour) are broadly in line with the national average. Peterborough is also an affordable place to live and do business, with a house price to earnings ratio of 7.16, compared to 10 nationally, and the average cost of Grade A office space currently around £13.50 per sqft, the second lowest within a 50-minute commute of London.
However, like much of the country, Peterborough has not escaped the economic damage done by the pandemic and will need further support for people and businesses as the economy seeks to recover from this downturn while adjusting to the UK’s withdrawal from the EU and the challenges that this will present to recruitment and trade.
Challenges and opportunities
1. City centre development
Peterborough has ambitions plans for the continued regeneration of the city centre. This consists of a number of identified development sites and several key transport and infrastructure projects that will be critical to meeting the needs of the city’s rapidly growing population.
The city currently has a high share of retail space in its centre but like many other places needs to respond to the changing demands on this sector and to realise a different vision for how the city centre is used. Peterborough currently has a very low share of office space and city centre living. Providing high quality residential and commercial property in the heart of the city, and additional cultural and leisure attractions, will be vital to attracting new wealth creators and skilled talent to the region, as well as increasing business and holiday visits.
Peterborough’s £22.9m Towns Fund will be used to boost the city with a wealth of cultural, health and wellbeing and tourism improvements, including:
New and improved visitor and cultural attractions, including the new library and cultural hub, a national Bronze Age Museum, and a new fitness and sports centre with an Olympic grade climbing facility.
Increased commercial space in the Station Quarter for businesses that want rapid connectivity to London.
Improved enterprise and skills infrastructure, including enterprise training and business incubation hubs.
Enhanced public realm, reduced road traffic, increased public transport use, green spaces and cycle lanes as part of the vision for a Future Green City.
2. Skills and education
Peterborough has a relatively lower skilled population, compared to the region and nationally. The proportion of pupils achieving 9-4 grades in Maths and English at GCSE (63.5%) is below the national average (72.2%) and most other cities in the UK, while the working age population with high level qualifications (NVQ4 and above) is low (36%) compared with the East (39.5%) and nationally (43.5%). Low skills are contributing to a relatively low waged economy, with earnings below the regional and national average. A comparison of resident earnings (£565.5) and workplace earnings (£569.50) suggest that higher paid jobs, are benefiting those travelling into the city for work.
The new Anglia Ruskin University, which opens in September this year, is designed to improve the skills of the local workforce to meet local economic needs. It will deliver practical solutions to the acute shortage of degree-level employees in the workforce, including in-work training, apprenticeships, distance learning and outreach. By widening participation and attracting a diverse student population from non-traditional backgrounds, it will both redress the skills gap and improve social mobility in an area that has been a long-term higher education ‘cold spot’.
3. The fast growth corridor
Peterborough, along with Cambridge and Norwich, is a member of the Fast Growth Cities group which contains some of the UK’s most successful cities. It is important that Peterborough continues to function as a regional employment hub and innovation centre. However, its future is also linked to the development of a ‘golden triangle’ in the East and the links to Norwich and particularly Cambridge which already attracts over 60% of its workforce from the surrounding area.
Improved connectivity in public transport can help more Peterborough residents access higher paid employment in Cambridge. However, development along the A1(M)/A14, including housing and employment sites, will help to increase the agglomeration effects of these two cities, which can be transformative for the East of England. This will help provide the sites and premises for expansion of new spin-outs and company start-ups from Cambridge University/Science Park and its unique cluster of the technology firms, as well as the housing development that will allow people to access affordable homes and employment opportunities along this route. This fast growth corridor will help connect towns and villages - places like Huntingdon, Yaxley, Ramsey, and Northstowe - so that the benefits of growth can be diffused across the region, without overconcentrating development in particular locations making them unaffordable for lower income households.
Peterborough is already addressing specific challenges in terms of low skills attainment and economic recovery from Covid19. In the longer term, working with Government, the support for Peterborough’s future economic growth should focus on providing the resident workforce with better skills and education opportunities, while continuing to attract high-skilled, high-paying businesses into the city, and building more homes to increase affordability in the city. Peterborough, together with other fast growth cities, has a crucial role to play in driving economic growth in the region and the UK.
Shailesh Vara MP
“Peterborough is a key employment centre for the region. The city’s economy has grown impressively over the past decade, with the ongoing regeneration of the town centre adding to the city’s appeal. We need to ensure that the city, and the region generally, continues to grow and attract all levels of employment, including new high paid and semi-skilled jobs. Peterborough has huge potential which we need to utilise, and this is helped by its strategic location in terms of road and rail routes to other key areas in the country. As the city expands, it is important that the benefits reach the outer areas of the city, as well as it’s connected towns and villages.”
James Palmer, Chair, Eastern Powerhouse
“Peterborough is an ambitious and forward-thinking city that has a crucial role to play in driving development across the UK. However, at present the city faces two key barriers to its success: the economic damage wrought by Covid 19 on the one hand, and lower than average skills attainment on the other. Recent initiatives like the regeneration of the city centre, improved connectivity in public transport, and the founding of a new Anglia Ruskin university campus, are a fighting start in addressing these issues. The Eastern Powerhouse applauds these efforts, and our hope is that by offering a platform where new solutions can be formulated and honed, our partnership could play a small yet vital role in helping Peterborough achieve its full potential”.
 Cambridge (population 124,798), Chelmsford (178,388), Ely (20,112), Norwich (143,135), Peterborough (202,259), Southend-on-Sea (183,125), St Albans (82,146 ).