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Region needs more jobs, higher skills and better housing – report

Region needs more jobs, higher skills and better housing – report

🕔28.Feb 2019

A new report into economic injustice in Birmingham and the Black Country paints a stark picture about the state of the area, notably in skills and housing. Whilst the story is not new, the data and findings help crystallise the challenge facing local and regional leaders, writes Kevin Johnson.

The report was undertaken by the New Policy Institute (NPI) and Barrow Cadbury Trust and focuses on household resources, employment, skills and wages, levels of deprivation and housing and homelessness.

One of the report’s authors says that big inequalities within the West Midlands –  notably between the weakness of the Black Country economy and the economic strength of Coventry and Solihull – should be a top priority for the elected Mayor.

Among the key findings are:

  • Birmingham and the Black Country are short of jobs. Birmingham’s employment rate is eight percentage points below Greater Manchester (similar in population and varying socio-economic conditions) and in the bottom tenth of all local authority areas nationally;
  • Both Birmingham and Black Country residents are very dependent on their local economies for work…although twenty-two per cent of professional and managerial jobs in Birmingham are done by people living outside of the WMCA area;
  • In 2017, 50% of the working-age population of Birmingham aged 25 or above had no more than an NVQ2 (National Vocational Qualification) as their highest level of qualification. The figure for the Black Country was 58%. Thirty-seven per cent of Birmingham’s workforce and 42% of the Black Country’s lacked even the basic NVQ2. This compares with 29% for Greater Manchester (and 26% for England);
  • Birmingham faces multiple housing problems notably high fuel poverty and overcrowding, sharply-rising private sector rents and a three-year doubling in the proportion of households in temporary accommodation;
  • In 2016, economic prosperity per person in Birmingham and the Black Country was 36% below the England average;
  • Almost half of Birmingham and the Black Country’s small local areas are in the most deprived fifth nationally. For an area of its size, only Liverpool City region comes close.

The report notes that, after allowing for inflation, GVA per resident in Birmingham and the Black Country was still 3% below its recent peak just before the recession in 2007 – and only 1% up on 2002.

This means there has been almost no improvement in economic prosperity per head for nearly two decades.

The study investigates two key factors driving prosperity – labour productivity and jobs density – for 2014-2016 in the three parts of the West Midlands. The Black Country lags its West Midlands counterparts and Greater Manchester on both counts and economic prosperity overall.

Less than half of households in Birmingham and the Black Country are fully working (all adults in the household), compared with 56% in Greater Manchester. Although Birmingham is up on its 2012 low point (40%), it is still below where it was in 2005.

The report also looks at fuel poverty and deprivation.  Many of the worst-hit areas for fuel poverty (fuel costs above the national average and where meeting them takes income below the poverty line) are in Birmingham – notably Hodge Hill, Perry Barr and Hall Green – with others including Warley, Walsall South and Wolverhampton North East.

Meanwhile, nearly half of all local areas in Birmingham and Black Country are in the fifth most deprived areas nationally. Out of a total of 128 wards, 49 face serious deprivation.

Peter Kenway, one of the report’s authors and NPI’s Director said:

Birmingham and the Black Country face problems around employment, deprivation and housing as bad as anywhere in England.

Central government policies, for example on social security and local government funding, deepen these problems and hamper locally-led responses.

Opportunities presented by HS2, the 2022 Commonwealth Games and business re-locations bring economic growth and prosperity to the region but, the authors of the report argue, should be forged through a lens of fairer and more inclusive economic growth.

The authors acknowledge this is already in the “hearts and minds of city leaders” with WMCA’s Inclusive Growth Unit.

In the last week, Mayor Andy Street has been pushing the latest productivity figures from the Office of National Statistics with “a bigger increase…than anywhere else in the country…”.

The WMCA points to data which says the value of work produced in the region grew by 18 per cent between 2010 and 2017, with overall productivity rising by five per cent – the highest increase in the UK.

Productivity in the Coventry and Warwickshire Local Enterprise Partnership (LEP) area went up by over 10 per cent during this time – nearly four times the national average. The increase in Black Country LEP was 5.6 per cent and in Greater Birmingham and Solihull LEP, two per cent.

The NPI/Barrow Cadbury report highlights labour productivity as a significant challenge to the Black Country economy. It trails Birmingham by 9% and Coventry-Solihull by 20%.

As the WMCA acknowledges, labour productivity in the West Midlands in 2017 was still 11.9 per cent behind the national average.

Mayor of the West Midlands Andy Street said:

We are growing fast, with our output up 35% over the past five years and a record number of people in work.

But we know we still have more to do. If our economy performed at the national average, it would be £15bn larger and we would have higher average earnings for people in the region.

This is why our Local Industrial Strategy will bring together businesses, public services, communities and skills providers to further drive up productivity in the West Midlands.

Cllr Ian Ward, leader of Birmingham City Council and portfolio holder for economic growth on the (WMCA, added:

To deliver…inclusive growth, we must ensure that everyone has access to work opportunities and people have the right skills for the future.

Local and regional leaders are waiting for the Government to sign off on its Local Industrial Strategy. They may seek to use this NPI/Barrow Cadbury report to push the case for more funds as part of the Comprehensive Spending Review as well as highlighting issues with the roll out of Universal Credit in an area with high deprivation.

The NPI/Barrow Cadbury report states:

Greater effort should be made to identify and address the inequalities of outcomes in employment and housing which afflict those who are young, belong to an ethnic minority group and/or are disabled.

It adds:

Birmingham’s housing crisis – combining unaffordability, overcrowding, low housing quality and homelessness – should also be a priority for action across a wider area than just the city itself.

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