The UK’s economic recovery is widening the gap between London and centres like Birmingham because provincial cities were ‘failing to make the most of their potential'.
Research by the Centre for Cities think tank revealed that the capital accounted for 80 per cent of national private sector employment growth between 2010 and 2012.
For every public sector job created in the capital, two have been lost in other cities, the study found.
The report said: “London remains the UK’s economic power house and is pivotal to the UK’s future success.”
Birmingham and Edinburgh were the next best performing cities in terms of private sector job creation with “welcome signs of growth,” according to researchers. However Birmingham was still not punching its weight, said the study.
It added that private sector jobs outnumbered public sector posts in Birmingham by more than three-to-one with 727,000 employed by private firms compared to 297,000 in public sector jobs. Wages remained flat at an average of £40 per week, according to the study. Private sector employment had risen in Birmingham by 2.2 per cent while public sector jobs had decreased by three per cent.
In total just above 64 per cent of Birmingham’s adult population was in work - the third lowest in the UK.
The report questioned if London was creating a brain drain of talented young people from other parts of the UK.
Between 2009 and 2012, there was a net inflow of 48,400 22-30 year olds – enough people to fill Villa Park – from large cities into London. Some 80,000 moved to the capital, outstripping the 31,600 that left. Of the total net outflow of people in this age group from large cities, 58 per cent – more than half – went to London.
There were more graduate vacancies in London - 35 per cent of all jobs as opposed to 26 per cent everywhere else - and career progression was quicker than other cities for young people.
Alexandra Jones, chief executive of Centre for Cities, added: “The gap between London and other UK cities is widening and we are failing to make the most of cities’ economic potential.
“Devolving more funding and powers to UK cities so they can generate more of their own income and play to their different strengths will be critical to ensuring this is a sustainable, job-rich recovery.”
Cities minister Greg Clark said: “For Britain to prosper, our cities must prosper. They are the engines of growth for the national economy in a world where cities are increasingly competing against others around the world for jobs and investment.
“That is why the City Deals programme, which began in 2012, has been so important, giving cities more power to drive growth, something from which London has benefited for over a decade.
“The Centre for Cities report uses data up to September 2012, and illustrates exactly what the Government was saying at the time - that it is essential to hand powers over to cities so that they can take control of their own destinies. Since then, the cities have gained momentum.
“In the last two years the UK has created over a million jobs, of which over 750,000 are outside London. City Deals and Local Growth Deals will unleash the potential for cities to stimulate growth and create jobs around the country.”