Spending Review: Derby urged to be 'outward looking'

Derby's economy is too reliant on big employers, according to a new report from an independent think tank.

Centre for Cities said employers such as Rolls-Royce and Bombardier are too dominant in the city's economy.

But the report said Derby was better positioned to withstand spending cuts because it had fewer public sector workers.

The city is quite dependant on large employers with 41% of employees working for firms with more than 200 people.

'Difficult years'

Nationally, 32% of urban employees on average work at larger firms.

The report, Shifting Gears: Safeguarding Derby's Economic Growth, said the predominance of Rolls-Royce or Bombardier could hurt the city's economy if the coalition cuts contracts to these larger firms.

Rolls-Royce contributes £3.1bn directly to the local economy with a further £1.5bn generated indirectly from the aerospace firm's factories and offices.

Rolls-Royce has 11,000 employees in Derby while Bombardier has 3,000 staff and Citibank's Egg operations employs 1,100 people.

In the public sector, the city council has 11,000 staff and Derby NHS Trust has 7,000 employees.

The city has been placed among the bottom 20 UK cities for firms with new VAT registrations between 1994 and 2007.

The report recommends Derby capitalises on its strengths like advanced manufacturing and encourages it to be outward looking and open to new opportunities.

Andrew Carter, director of Policy & Research at the Centre for Cities said: "It is absolutely essential that Derby reaches out in the difficult years ahead - recognising that the government spending squeeze is likely to put pressure on public sector employers and private sector contractors.

City council leader Harvey Jennings said: "The recommendations of this report remind us that the city must not rest on its laurels but continue to support economic success during challenging times".