Regeneration: Making growth work harder

Manchester's economy more than doubled between 2012 and 2023 – 106% Gross Value Added (GVA) growth, the fastest of any English core city. Bristol, Leeds and Liverpool have all seen substantial growth too. All of the English core cities have pursued ambitious growth strategies, and all can point to real returns.And yet, the Indices of Deprivation 2025 tell a more complicated story. Manchester has 41% of its neighbourhoods in the most deprived national decile, a figure that has hardly budged in the last 10 years. Birmingham has 43%. Liverpool, 37%. Nationally, 82% of the neighbourhoods that were most deprived in 2019 remained so in 2025. Growth has arrived. For many communities, deprivation has stayed.This is not a story about failure. The questions are why does strong economic growth not automatically reduce deprivation? And what can local authority leaders do about the gap?What a decade of data actually showsPlotting GVA growth from 2012 to 2023 against the change in the proportion of neighbourhoods in the most deprived national decile from 2015 to 2025, across all eight English core cities, reveals something that should give every growth strategy pause (see box).There is no meaningful correlation between the speed of growth and the movement in deprivation. Manchester grew at nearly double the rate of other core cities, yet the proportion of its neighbourhoods in the most deprived decile has barely moved. Birmingham and Newcastle saw meaningful growth but their proportion of highly deprived neighbourhoods actually increased over the period. Liverpool, growing at roughly the same rate as Leeds and Bristol, achieved the biggest deprivation reduction of any core city – more than eight percentage points.The Liverpool result matters. Starting from one of the highest deprivation baselines in the country, it has delivered the largest shift. This is not a story about affluent cities getting more affluent. It is a story about what happens inside the growth model itself.Why the outcomes divergeAt IMPOWER we correlated the deprivation 2025 domain scores against 63 outcome metrics across all 153 upper-tier local authorities. The results are striking. Health deprivation alone explains around two-thirds of the variance in looked-after children rates (r = 0.82). Council tax collection correlates with income and crime deprivation at r = 0.79. Homelessness relief demand correlates at r = 0.69 – driven, counter-intuitively, not by barriers to housing but by older person income deprivation. Deprivation is the single strongest predictor of demand for the costliest council services.Our analysis does not yet prove causation, but it points to where the connections appear strongest.The clearest signal is health. Health deprivation is the dominant demand driver across children's social care, adult social care, SEND and older people's services. Where health outcomes have improved alongside economic activity, demand headwinds have eased. Where they have not, deprivation-driven demand stays structurally embedded.There are also indications that the breadth of a city's labour market matters. Leeds has the lowest unemployment rate of any English core city; Manchester has the highest. A more diverse economy – spanning financial services, manufacturing, digital and health – may create more entry points for residents than a model concentrated in high-skill professional services. This is suggestive rather than conclusive, but it raises an important design question.What follows is a practical challenge: economic development and social policy need to be joined up deliberately, not assumed to converge. The new devolution settlements and integrated funding pots create mechanisms for this. But the question for every major investment decision should be how does this reach residents in our most deprived wards?What councils can control nowConnecting growth to deprivation is a long-term project. But councils cannot wait for the structural headwind to ease before acting on costs.This is where the second finding from our analysis becomes critical. Of the 63 metrics we examined, 12 – including homelessness prevention success, placement stability for looked-after children, direct payment take-up, EHCP cessation when needs are met, the proportion of clients reviewed – showed no deprivation signal whatsoever. These are pure practice metrics.Councils in the most deprived areas have no structural reasons for underperformance; councils in the least deprived have no structural advantage.The leadership question changes depending on where a metric sits. For strong-signal metrics, who with our deprivation profile does this better, and what can we learn? For zero-signal metrics, what is stopping us?Making growth work harder on deprivation – while simultaneously improving practice on the metrics councils can control today – is not just good social policy.For councils under acute financial pressure, it is the most credible route to a sustainable budget.Jon Ainger is executive director at IMPOWER Consulting. The deprivation-to-demand analysis referenced in this article is available from IMPOWER on request

Title

REGENERATION

Regeneration: Making growth work harder

By Jon Ainger | 14 May 2026

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