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Forecasts about the state of the UK economy make for gloomy reading; it's clear that 2012 will be a difficult year. But does this vary at a local level?

Today, Centre for Cities published its fifth annual 'health check' of UK cities, Cities Outlook 2012, supported by IBM and the Local Government Association. This year, as well as reviewing how cities have changed over the past year, from population to patents, the independent report has a special focus on unemployment in cities. And the findings make for troubling reading. Over the past three years, the gap between the best and the worst performing cities has continued to widen.

The evidence is striking. Just two in every 100 people (1.8 percent) claimed Jobseeker's Allowance (JSA) in Cambridge during December 2011, whereas Hull found itself on the opposite end of the scale with 8 in every 100 people (8.2 percent) of the working population seeking work. This gap has almost doubled since February 2008.

The index also shows that the UK is a tale of many cities; each city faces a very specific set of challenges, even when they are geographically close. For example, Yorkshire contains both Grimsby, where one in ten young people claim Jobseeker's Allowance, and York, where less than one in 30 people are claiming this unemployment benefit.

Even cities with similar levels of unemployment have very different stories when you look beneath the surface. Swansea and Glasgow both have similar levels of people claiming JSA, but in Glasgow nearly a quarter (24%) of claimants have been out of work for more than a year, whereas it's just one in ten claimants (11%) in Swansea. In Swansea, young people are more of an issue: over a third of claimants are aged 18-24, compared to 28% in Glasgow. In both cities, the trends have worrying consequences. Being unemployed when you're young, or for over a year, can have lasting consequences for the future, both in terms of getting a job and the size of your pay packet.

It is because the story is so different in different places that we need to understand more about what's happening in our cities. Policies dealing with unemployment, for example, need to be flexible so that Glasgow can put sufficient focus on those who are long term unemployed, whereas for Swansea more investment will go into helping young people. What is right for one city will not necessarily be right for another.

And policies that think about geography matter for our economy too. Cities already contain 58 per cent of the country's private sector jobs, and the three biggest cities - London, Birmingham and Manchester - contain more than 25% of the UK's private sector jobs. Making sure that cities can make the most of opportunities to attract private sector investment, and can design policies that respond to their particular challenges, will be vital for weathering the bumpy year ahead.

It's good news that the Government seems to be thinking more about cities when it comes to economic policy. Nick Clegg's announcement in December of future 'City Deals' will play a key part in bringing forward bespoke packages to answer the unique problems cities face.

But, as always, the devil is in the detail. If these deals are to make a difference, they need this year to go beyond words and translate into action, with both Government and cities working together. And rather than being restricted to the Core Cities, these deals should be open to a wide range of cities: places like Cambridge, Milton Keynes, York and Reading continue to perform well each year and should be given a chance to devise their own ways of working too.
National policies should also think about geography. The Youth Contract announced in November, is a £1billion scheme trying to get young people into work over the next three years. For it to be successful, it needs to think about geography as well as apprenticeships; a young person in Birmingham faces very different challenges in finding a job compared to a youth in York. Making sure it can respond to local circumstances would increase the impact of the Youth Contract for the young people it is hoping to help.

Cities Outlook 2012 sets out a challenging story, highlighting both the cities with most prospect of thriving during the year ahead and the cities that are most vulnerable to economic turmoil and rising unemployment. What it shows clearly is that, to make a difference, Government needs to think about places as well as people. Different cities across the UK face very difficult challenges. The more that we see national policies that can be tailored to local circumstances, the more likely it is that we will be able to help the people most affected by economic upheaval.