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The Job’s the jobs

The Job’s the jobs

🕔15.Dec 2016

This week, the race (OK, long walk) for the mayoral job has all been about jobs. But what kind of, er, job, have the candidates made of it? In the first of two posts, Kevin Johnson looks at the numbers and the headline responses.

It all started early on Monday morning at the Library of Birmingham with three candidates discussing the findings of a Resolution Foundation study which finds the West Midlands city region is Britain’s biggest employment blackspot.

Figures were also released showing Birmingham enjoyed the highest rate of business growth of any UK city in 2016 – more than London, Manchester and Liverpool. Marketing Birmingham said the city is on track to retain its position as Britain’s regional start-up capital for fourth consecutive year and unprecedented growth in visitor economy had seen Birmingham’s overnight and overseas tourist numbers double.

Yesterday, we had news that in the West Midlands unemployment fell by 25,000 over the three months, to 151,000.

A poor employment performance stretching back decades is turning the West Midlands city region into Britain’s biggest employment blackspot, and played a key role in the region’s vote to leave the EU, according to the Resolution Foundation think tank.

The Foundation says that tackling these longstanding employment problems should be a top priority for both the new Mayor and national government. It is calling on Whitehall to recalibrate its ‘Midlands Engine’ project so that it focuses on making the West Midlands city region “jobs-fit.”

The think tank says that the West Midlands’ jobs woes were a significant factor behind its support for Brexit. Its finds that the region as a whole delivered the strongest vote to leave of any region in the UK, once other characteristics such as age and income were controlled for, while Walsall, Sandwell and Dudley saw amongst the largest Leave votes in the country.

The report shows the depth of the West Midlands city region’s jobs failure, including:

  • Entering the downturn with the lowest employment rate of any city region at 66.3%, following slower-than-average jobs growth in the years running up to the financial crisis;
  • Not sharing in the recent jobs “miracle” across the UK, with employment prospects having only improved at a glacial pace since the depths of the downturn in 2011. The West Midlands now has the lowest employment rate of any major city region at just 64.5%; and,
  • Having employment troubles that are shared across the region. Solihull is the only local authority to have a higher employment rate than the city region average at 72.7%. Birmingham is bottom of the pack with employment down at 60.9 per cent, followed by Walsall at 65.1%.

The report identified three groups that are experiencing particular troubles finding work: young people, black and minority ethnic (BAME) and low-qualified workers. It notes that barely half of all young people aged 16-29 are in work.

The report also highlights a poor recent performance on pay – the West Midlands’ lost its pay premium over other city regions during the 2000s – which has meant that living standards across the region started to stagnate even before the crisis.

The Foundation adds that despite the bleak picture on employment, there are plenty of grounds for optimism. It notes that young people receiving free school meals in state-funded schools in the West Midlands city region are more likely to progress to higher education than in any city other than London. It also has the highest proportion of students of any city region.

The Foundation highlights three key priorities for the mayoral candidates:

  • Ensure the city region has a “jobs rich” industrial strategy. As well as capitalising on its strong manufacturing base, the city region should also look to expand into more “jobs-rich” areas such as the high value services sector, including insurance and financial services;
  • Utilise the West Midlands’ “human goldmine” of its large student population. Improving its graduate retention rates by attracting knowledge jobs to the region would boost productivity and create spillover benefits for local non-graduates too; and,
  • Prioritise support for disadvantaged groups. The report calls for investment in back-to-work programmes to support young and low-qualified people into employment, along with specific outreach programmes for the region’s BAME population.

Conor D’Arcy, Policy Analyst at the Resolution Foundation who presented the report at the Library, said:

For years the West Midlands has been ignored as previous governments have focused on making London the financial capital of the world and Manchester a Northern Powerhouse. It’s high time Birmingham, Coventry and the Black Country are brought out of the shadows and made the focus of a national renaissance for Britain’s major cities.

If you can’t be bothered to read much further, here’s a summary of the responses from the mayoral candidates.

Siôn Simon: Take back control
Beverley Nielsen: Focus on SMEs, especially in manufacturing
Andy Street: It’s about leadership and collaboration.

Also on Monday, as politicians and policy wonks debated the job crisis, Marketing Birmingham was highlighting the city’s booming business sector, labelling Birmingham as the number one city for business growth.

Birmingham now has more businesses than any other city outside the capital, totalling 39,800, with 9,151 new companies created in the first six months of 2016.

The supporting data from StartUp Britain and Marketing Birmingham’s Regional Observatory, demonstrates that high value added sectors – Business, Professional and Financial Services (BPS), life sciences and digital sectors – underpinned the region’s economic success with business growth focused among these sectors as well as advanced engineering, which showed a significant 25% growth.

Meanwhile, the Greater Birmingham & Solihull LEP attracted 81 new FDI projects to the region in 2015/2016. Marketing Birmingham says subsequent new job creation amounts to more than any other region outside London.

Neil Rami, Chief Executive of Marketing Birmingham, commented:

The pace and the scale of economic growth in Greater Birmingham has been significant over the last year. The unprecedented level of new enterprises here is demonstrating how the regions can outclass London as a central hub for innovation, productivity and long-term future prospects.

Mike Payne, Chief Technology Officer of global fintech company Lombard Risk, which invested in Birmingham in 2016, added:

We considered a number of locations across Europe… We decided on Birmingham as we believe this city presents us with an exciting opportunity to build a first-class development centre to support our next generation of products.

Birmingham has a number of world-class universities nearby and a rich pool of talented technologists. It was an obvious place for us to invest in.

Responding to the Resolution Foundation’s report, Siôn Simon – Labour’s mayoral candidate, said:

Next May’s election is about taking back control of our own affairs – returning the West Midlands to our rightful place in the world. For too long, we’ve been let down by London. Their interests are not ours.

The West Midlands economy is bigger than three quarters of the world’s countries. We need to start acting like it. Now is the time to restore our pride as the great creative engine of enterprise, opportunity and jobs at the heart of England.

Liberal Democrat candidate Beverley Nielsen said:

We must turnaround successive governments’ neglect of manufacturing and this region.

Now is the time for a self-made renaissance, built by our own small and medium sized businesses, where we capture the premier global position in manufacturing and ancillary services.

Our region is no longer attractive to the graduate talent we consistently produce.

My approach…would be to focus on the growth of small and medium sized businesses who are able to offer long term sustainable employment to our local talent in the areas of renewables, recyclables and reengineering.

Andy Street, the Conservative candidate, tried to make sense of the mixed signals coming from the week’s jobs and growth news in a blog.

For decades, this region underperformed economically and the social consequences have been painful.

However, since 2010 our fortunes have begun to noticeably change. Not dramatically. But noticeably.

It was then that the new Government asked business to share in the leadership of economic development through the Local Enterprise Partnerships. It’s was a privilege to lead that organisation in Greater Birmingham & Solihull and I like to think we showed teamwork and collaboration delivers.

[The excellent Resolution Foundation] report quite rightly noted that much of the benefit from our economic growth was not touching many of the communities who need it the most.

It’s easy to understand why people feel left behind and why people feel disengaged.

For my part I have committed to eradicating youth unemployment in the West Midlands during my first term as Mayor in addition to investment in infrastructure and skills.

In the second part of this post, Kevin Johnson looks at what the candidates responses on employment tell us about the emerging shape of the campaign and what they might actually do in office.

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