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Broadcast Boost: would Ch4 generate new jobs?

Broadcast Boost: would Ch4 generate new jobs?

🕔10.Aug 2017

A leading think tank has questioned the value of the possible relocation of Channel 4 to the West Midlands based on its research into the impact of the BBC’s North project in Salford.

The Corporation’s part relocation has led to a “jobs boom” in MediaCityUK, but little positive impact on employment across Greater Manchester – suggesting that the West Midlands and other places bidding to be the new home of Ch4 should not overestimate the economic benefits it would bring.

Research published today by Centre for Cities examines the economic impact of moving public sector jobs from London to other parts of the country. In particular, it focuses on the BBC’s relocation of national operations to Salford in 2011, which it claimed would bring up to 15,000 jobs to the wider region.

However, the findings of the report show that while the relocation led to considerable jobs growth in MediaCity, its impact on the wider city region was limited. Centre for Cities says this has important implications for the Government’s decision on relocating Ch4, and for places like the West Midlands (including Birmingham, Coventry, Solihull and Dudley), which are hoping to be the station’s new base.

A report commissioned by the West Midlands Growth Company to support the West Midlands Combined Authority (WMCA) submission to the Channel 4 consultation suggested that the region could stand to benefit from a £5billion economic boost.

The Centre for Cities research reveals:

• Moving the BBC to Salford has had a significant impact on employment at MediaCity itself, which gained 4,600 new jobs between 2011 and 2016 – equivalent to a 43% increase in employment. Out of these new roles, nearly 4,000 were in the media, including 2,000 jobs in BBC national operations which moved to MediaCity from other parts of the country as part of the relocation.

• However, many of the new jobs resulted from the displacement of businesses from other parts of Greater Manchester, rather than from new firms starting up in the city region. More than a third of the new jobs at MediaCity (1,200) were in businesses already based in other areas of Greater Manchester in 2011, which subsequently moved to Salford after the BBC’s relocation (including around 640 jobs in the BBC’s local operations, which moved from Manchester city centre).

Only 145 jobs were created in MediaCity by firms which moved all their operations from elsewhere in the country before 2011, showing that very few firms followed the BBC’s lead in relocating to Salford.

• Moreover, the impact of the BBC relocation on employment across Greater Manchester was negligible. The research shows that excluding the new jobs at MediaCity in businesses already based elsewhere in Greater Manchester before 2011, the BBC’s move brought around 4,420 new jobs to the wider city region – equivalent to only 0.3% of total employment in Greater Manchester.

Commenting on these findings, Paul Swinney, Principal Economist of Centre for Cities, said:

The impact of the BBC’s relocation shows that the Government and city leaders should not overestimate the economic benefits of moving public sector jobs from London to other parts of the country. While the BBC’s move has been positive for Greater Manchester in other ways, it has done little to create new jobs across the city region, or to encourage new businesses to set up in the area.

The lesson for the West Midlands and other places bidding to be the new home of Channel 4 is that if they are successful, they should not expect to see a major boost to their economies beyond the jobs that the relocation would directly bring. More broadly, cities need to weigh up the costs of efforts to attract public bodies and jobs, as these resources might be better used to address skills-gaps or improve transport infrastructure instead.

If the Government is determined to relocate more public sector jobs across the country, it should move them to major cities which are already home to a large share of high-skilled workers and firms in related industries. For example, if the BBC had moved to a smaller city than Manchester with fewer high-skilled workers and a less diverse economy, it’s likely that the limited economic benefits it brought would have been less significant.

Last month, Chamberlain Files reported that a leading economist, and former Vice Chair of the BBC Trust, based at Manchester University said that Channel 4 re-location to Birmingham would be “madness.” Speaking at a Centre for Cities lecture, Professor Diane Coyle also indicated that the BBC project at Salford had been a success.

Channel 4 bosses are at pains to resist the pressure from Culture Secretary Karen Bradley to relocate from offices in central London. It is unlikely that all functions at the broadcaster would move as part of any re-location project.

Whilst Mayor of the West Midlands, Andy Street, and Councillor John Clancy, leader of Birmingham city council and Economy portfolio holder on WMCA, are pressing the region’s case for Channel 4 in public, insiders exercise more caution about the cost of securing its presence, the chances of being the broadcaster’s first choice and the wider economic impact it would generate.

Main pic: Phil and Kirstie, Location, Location, Location – IWC Media for Channel 4

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