Planning for Scale: What City Centres Need to Grow

Manchester, Birmingham, and Leeds can start innovative firms. That much is clear from the data. What they cannot yet do, reliably and consistently, is scale those firms beyond the startup phase into the kind of businesses that attract nine-figure investment rounds. The problem is not that investors are ignoring these cities. It is that the physical and institutional fabric of their centres does not yet support the journey from seed-stage startup to exit-stage enterprise. And that is a problem planners are uniquely placed to address.

The Scaling Gap

A new report from the Centre for Cities, Angels’ Delights, authored by Yunze Wang and Anthony Breach, reframes the familiar debate about geographic inequality in UK equity investment (Wang & Breach, 2026). The headline numbers are stark: London accounts for 51% of equity deals and 62% of deal value nationally, based on data covering 8,072 deals between 2020 and 2024. Nine large cities outside London, Manchester, Birmingham, Glasgow, Newcastle, Bristol, Sheffield, Leeds, Liverpool, and Nottingham, secure 12% of deals but only 6% of value.

The instinctive policy response has been to blame capital supply: investors cluster in London, so money does not flow north. Wang and Breach argue that this reading is largely wrong. The geographic pattern reflects real differences in the number and quality of investable firms, and, critically, in those firms’ capacity to scale.

Here is the key finding. At the early stages of equity fundraising, median deal values are broadly similar across city types. But by the later growth and exit stages, the trajectories diverge sharply. London firms see median deal values grow from 1.3 million pounds to 22.7 million pounds, a 17-fold increase. In large cities, the jump is from 0.9 million to 9 million pounds, roughly 11-fold. (The report uses medians; a handful of billion-pound unicorn exits in London make averages unreliable.) The gap is not at the starting line. It is on the track.

Why Startups Stall Outside London

What accounts for this scaling deficit? The report points to the business environment in its broadest sense, the combination of specialised labour, management expertise, professional services, and physical infrastructure that enables a firm to grow beyond its initial proposition.

London and Oxford-Cambridge provide these conditions more consistently. Firms in those locations can access deep pools of specialised talent, dense networks of legal and financial advisors, and a critical mass of peer firms in related sectors. These are agglomeration benefits, and they compound at each successive fundraising round (Wang & Breach, 2026). Oxford and Cambridge outperform even London on a per-firm basis, in part because nearly half their equity deals are in capital-intensive sectors like life sciences, a sectoral advantage that spatial planning alone cannot replicate.

Large cities have some of these ingredients but not enough of them, or not in the right combination. The variation is instructive. Bristol attracts 12 million pounds of equity investment per investable firm; Birmingham manages 1 million pounds (Wang & Breach, 2026). Both have universities, transport links, and investor networks. But their business environments produce starkly different outcomes for growing firms.

There is another structural feature worth noting. Some 89% of equity deals in large cities are made by investors based elsewhere, compared with 73% in Oxford-Cambridge and 57% in London (Wang & Breach, 2026). Large cities depend heavily on outside capital. That is not necessarily a problem,outside investment can signal confidence,but it means local firms must be visible and credible to distant investors. The quality of the workspace, the accessibility of the city centre, and the density of the commercial core all become signals that investors read, consciously or not.

What Planners Can Change

This is where the argument becomes directly relevant to planning. The report identifies three areas where planning decisions are material: city-centre workspace, transport accessibility, and the quality of the commercial built environment (Wang & Breach, 2026).

Workspace

The post-pandemic office market has bifurcated. High-quality city-centre space remains in strong demand; lower-quality stock has become difficult to let (Wang & Breach, 2026). For a scaling firm, the right workspace is not a perk,it is infrastructure. It determines whether a business can recruit the talent it needs, house the teams it is building, and project the credibility that later-stage investors expect.

The Government has responded with significant capital commitments: 500 million pounds through the Mayoral Revolving Growth Fund to build city-centre workspace, and over 600 million pounds via the Strategic Site Accelerator programme for activities in Industrial Strategy Zones (Wang & Breach, 2026). The SSA is not designed specifically for city-centre workspace, but Wang and Breach argue both funding streams should be directed towards high-quality space in large city centres.

But public investment alone will not close the gap. The report contends that local and national planning policy should provide certainty to private developers so they can deliver new high-quality city-centre space, including through demolition and redevelopment of obsolete stock (Wang & Breach, 2026). This is a direct call on the planning system: permissive, confident plan-making for commercial intensification in city centres, not tentative or defensive allocation of employment land.

Transport

Transport improvements will not directly increase equity investment. The report is honest about this. But transport upgrades create larger effective labour markets, which unlock greater agglomeration benefits,precisely the kind of benefits that support firm scaling (Wang & Breach, 2026).

The priority for large cities, Wang and Breach argue, is transport integration across modes, rail devolution, and densification of urban cores. These are not new ideas in planning terms, but the report gives them a sharper economic rationale. Every percentage point of improved commuter accessibility is, in effect, an expansion of the talent pool a scaling firm can draw on.

The Built Environment as an Investment Signal

There is a subtler point embedded in the report’s analysis, one that planners should take seriously. The physical quality of a city centre functions as an investment signal. When 89% of deals come from outside investors, those investors are making judgments not just about individual firms but about the places those firms inhabit. A city centre with vacant upper floors, poor public realm, and fragmented commercial districts sends a message, whether or not it reflects the quality of the firms operating there.

Planning cannot fix every dimension of the business environment; it cannot create management expertise or conjure professional service clusters. But it can shape the physical conditions within which those things develop, using tools it already has: local plan policies on commercial floorspace, design standards for employment-led development, strategic site allocation, and compulsory purchase where regeneration demands it.

The Scale of the Opportunity

Wang and Breach quantify the stakes through four modelled pathways. The largest single lever is improving the scaling performance of firms already in large cities. If those firms could match the urban average ratio between early-stage and late-stage deal values, the gain would be 3.7 billion pounds in additional equity value,3.4% of the national total (Wang & Breach, 2026). By comparison, increasing the number of investable firms by 10% would yield 631 million pounds. The scaling gap is not a marginal inefficiency. It is the main event.

This matters for planners because the levers are, in significant part, spatial. The report frames the problem as one of demand-side conditions, the environment in which firms operate, rather than supply-side finance. And many of those conditions are shaped, enabled, or constrained by planning decisions.

Can Planning Really Drive Firm Growth?

There is a reasonable objection to this argument. Planning policy can provide workspace and improve accessibility, but can it genuinely influence whether a firm scales from a seed round to a nine-figure exit? The causal chain is long, and planning is only one link in it.

The honest answer is that no single intervention will close the gap. Management quality, sector specialisation, access to global markets, and university-industry links all matter, and most sit outside the planner’s direct control. The Oxbridge example is instructive: Oxford and Cambridge outperform London not through superior physical planning but through deep sectoral strengths in life sciences and other capital-intensive fields. Planning can address only one side of that equation.

But what the Centre for Cities analysis makes clear is that the physical environment is a necessary condition, not a sufficient one. London’s advantage is not reducible to finance; it includes the built environment, the density, and the infrastructure that make agglomeration work. Large cities need to replicate those physical conditions, even if they cannot replicate London’s scale.

The question for local planning authorities is not whether they can single-handedly produce the next unicorn. It is whether their plans, policies, and development management decisions are creating the conditions in which a scaling firm would choose to stay and grow, or whether, at some point between series A and series C, the founders look at the available office stock, the commute times, and the quality of the commercial core and decide to move.

What Comes Next

The Centre for Cities report lands at a moment when metro mayors have new powers and new funding streams, when the Industrial Strategy has placed city-region growth at the centre of economic policy, and when planning reform is back on the agenda. The alignment is unusually favourable.

But alignment is not the same as action. The risk is that workspace funds flow to peripheral sites rather than city centres, that planning policies protect obsolete stock rather than enable replacement, and that transport investment serves commuter convenience rather than labour market expansion.

Planners have a role here that extends beyond processing applications. It is about reading the economic evidence, understanding what scaling firms need, and making plans that treat commercial city centres as nationally significant infrastructure. The firms are already starting. The question is whether the cities will let them grow.

References

Wang, Y. and Breach, A. (2026) Angels’ delights: Why cities matter for equity investment. London: Centre for Cities.