NORTHWEST REGIONAL DEVELOPMENT AGENCY
NORTH WEST ECONOMIC BASELINE: FINAL FULL REPORT
A Final Report
July 2005 Regeneris Consulting 1-5 The Downs Altrincham WA14 2QD Tel: 0161 926 9214 Fax: 0161 926 8545 Web: www.regeneris.co.uk
North West Economic Baseline: Final Full Report -Summary
CONTENTS 1.
SUMMARY
1
2.
KEY ISSUES AND POSSIBLE POLICY REPONSES
11
3.
REGIONAL ECONOMIC PERFORMANCE AND PROSPECTS
33
4.
ADDRESSING BUSINESS COMPETITIVENESS AND SKILLS
63
5.
TACKLING REGENERATION, SOCIAL EXCLUSION AND WORKLESSNESS 86
6.
INFRASTRUCTURE FOR GROWTH
APPENDIX A – DATA TABLES
APPENDIX B – PAPER ON EMPLOYMENT CHANGE
APPENDIX C - BIBLIOGRAPHY
A/00163 Ref: A/00163 Page 2
112
North West Economic Baseline: Final Full Report -Summary
1.
Summary Context for the Work
1.1
This report has been produced by Regeneris Consulting for the Northwest Regional Development Agency (NWDA) as part of the process of reviewing the Regional Economic Strategy (RES). The purpose of this report is to inform the debate and discussion within the NWDA and amongst partners. We have summarised the important issues that may need a response in the new RES (see Section 2). The report also picks out a number of issues that are relevant to the development of the new Regional Spatial Strategy. The work is also important in a Northern Way context. One of the messages from the work is in fact the similarities in economic performance and challenges faced by the three northern regions.
1.2
The economic baseline draws on what is a deep and wide evidence base, it focuses on regional and sub-regional economic performance and factors which explain this performance. The agreed focus on the work has been at a regional and sub-regional level, although we draw out local variations in many places. City regions are becoming an increasingly important way of considering economic performance and policy, they cover different geographies that the sub-regions which are not precisely defined. The three city regions of Manchester, Liverpool and Central Lancashire, as part of the Northern Way development process, are in the midst of producing city region analyses and action plans. We have not, however carried out a city region level analysis in this report; a separate city region paper has been produced as part of this project.
1.3
The work does not consider wider policy issues or indeed the evidence of what interventions work and what do not work. Separate work on environmental and social sustainability is being carried out for the NWDA as part of the RES review.
Overall Position and Past Performance of the Region’s Economy 1.4
The region’s economy has improved markedly in relative and absolute terms in the period since 2000, in common with other northern regional economies. Over the period 2000 to 2003 150,000 extra jobs were created in the region and the rate of growth of GVA at 18.1% exceeded that of England by around 0.5% per annum. The rate of growth of regional GDP per capita also exceeded that of all the region’s comparator regions in continental Europe1.
1.5
However, our total Gross Value Added (GVA) of £98bn in 2003 was still 12% below the England average per capita, this represents a £13.6bn output gap or £2,000 per head of population.
1.6
The current output gap stems from two main sources: • Around a quarter is from the fact we have a lower proportion of our population in work (equating to 80,000 people below what it would be if at the England average), this element is caused in small part by our slightly lower working age compared to total population, but mostly to a lower employment rate of those of working age; • work.
Around three quarters is due to the below average rates of productivity of those in
1
These are Bayern (Germany), Centre-Est (France), Este (Spain), Lombardia (Italy), Nord Ovest (Italy), and Vlaams Gewest (Belgium).
Ref: A/00163 Page 1
North West Economic Baseline: Final Full Report -Summary 1.7
The low rates of productivity are particularly pronounced in the service sector, especially the business services sector. However, productivity rates overall are above average in the manufacturing sector – largely due to high rates of productivity and a relative specialisation in the chemicals/pharmaceuticals, aerospace and nuclear reprocessing sectors.
1.8
Our relative productivity has dropped back as employment has grown rapidly and more people, often with lower skills, have been drawn into work. The labour market in the region has performed particularly strongly and the North West is the only region to see a reduction in Incapacity Benefit claimants 2001-2003 and only one of two to see a reduction in number economically inactive.
1.9
Sub-regional performance has varied with key differences being: • First, the remarkable turn-around in the recent performance of Greater Merseyside which has become one of the fastest growing parts of the North West (and indeed England) after decades of stagnation. Liverpool has been one of the fastest growing cities in England. However, population has continued to decline although at a much slower rate than historically and with signs that the decline may have stabilised and in parts of the areas started growing. • Second, the continued poor economic performance of Cumbria in GVA terms, where it has been hard hit by contractions in its large manufacturing sectors (shipbuilding and nuclear) and in agriculture. It also suffered especially heavily in 2001/2 from the impact of Foot and Mouth. If Cumbria’s GVA had grown at the average rate of the North West 19992002 total GVA would have been some £450m higher in 2002 (8% higher in Cumbria and 0.5% higher in the whole region). However, Cumbria’s performance in job creation terms has been stronger. • Third, continued growth in Cheshire and Warrington, but at a slower rate than in the recent past and no longer substantially faster than the rest of the region. • Fourth, Greater Manchester has performed at a rate similar to the regional average since 1999. However, this rate of growth marks a significant improvement relative to the England average on the previous period. It is worth bearing in mind that Greater Manchester is by far the largest economy in the region, accounting for 40% of all GVA generated in 2002. Its performance has, as the largest part of the region’s economy, a major bearing on overall regional economic performance. • Fifth, Lancashire has seen steady economic growth; however employment growth has been faster than GVA growth indicating a reduction in productivity (output per worker).
1.10
At a more local level there are much greater variations in performance. The two main cities of Manchester and Liverpool have been two key sources of recent employment creation, especially since 2000. One of the most noticeable features of the past four years has been the strong performance of the south part of Greater Manchester (including Manchester city centre) - an area where both employment and GVA have grown rapidly. In contrast the north part of Greater Manchester has performed sluggishly with growth in GVA well below the regional average. Similarly, the overall picture for Lancashire masks significant differences in growth rates between parts of East Lancashire and the more dynamic area around Preston.
Regional Economic Strengths and Weaknesses 1.11
There are strengths and weaknesses in the performance of the region and our current assets:
Ref: A/00163 Page 2
North West Economic Baseline: Final Full Report -Summary • Skills: there is a significant skills gap at higher skills levels (80,000 fewer people of working age with graduate level qualifications than if at the England average) and we have too many people with low or no qualifications (120,000 “extra” people of working age with no qualifications compared to the England average). Our employers are less likely to train than average. There are signs however that the skills gaps are getting better at the higher skills level. • The region does of course have the potential advantage as one of the largest producers of graduates in the UK. In 2003-4 the 240,000 higher education students studying in the region was the second highest in England (after London) and has been growing at a faster rate than any other region. Around 65% of the region’s graduates finding work do so in this region. From the point of view of attracting businesses, the fact that the region has the single largest number of people with graduate level skills (over 1 million) outside London and the South East is important. • Enterprise: there is a substantial enterprise gap of around 20% fewer businesses per head and new start-ups compared to the England average. The North West would need around another 40,000 businesses if it were to mirror national levels. There is a complex set of factors explaining the gap: demand; skills; and cultural factors (which are especially important). The region has been catching up in recent years, although at current rates this will take many decades. Enterprise rates appear slightly higher in relative terms amongst younger people and attitudes to enterprise have improved over the last couple of years. • Innovation: the region performs well on several measures of innovation and R&D. The total levels of business R&D (£1.5bn in 2001) per head of population as a % of GVA are above average driven by a few peaks of world class performance and our important chemicals, pharmaceuticals, aerospace and nuclear sectors. We have a number of world class centres of excellence in our Universities, with 87 departments receiving 5 or 5* ratings in the last Research Assessment Exercise in 2001 (10.6% of the total for all English Universities). The recently created new University of Manchester has the 5th largest research budget provided by HEFCE2 of any English University and indeed the scale of HEI research activity in Manchester is larger than in any single city in the Midlands or North of England. • However, in spite of these positives, there appears to be a worrying general poor performance in a large ‘tail’ of firms - an innovation gap reflected in below average rates of patenting and in firms being “innovation active”. The region also fares very poorly in terms of its share of “other” government R&D spend (in the NHS and other research establishments which are heavily concentrated in the South of England). • Recent DTI national benchmarking data on adoption of ICT suggests that the North West overall, although lagging behind London and the South East, is ahead of many other regions. Yet recent survey data from the region’s businesses points to very low and unsophisticated usage of ICT in the region’s smaller businesses.
2
The Higher Education Funding Council; data for the academic year 2005/6. The top four were University of
Cambridge, University College London, University of Oxford, Imperial College of Science, Technology and Medicine
Ref: A/00163 Page 3
North West Economic Baseline: Final Full Report -Summary • The region has 10% fewer people employed in broadly defined knowledge economy sectors, than the England average and would need to see an additional 90,000 people employed now to reach the current England average. However, the rate of growth in recent years (1998 to 2003) has exceeded the national average and if projected forward we could converge by 2020. • Investment: overall total levels of investment in our infrastructure, housing and business base are lower than many other regions (in part reflecting the past slow rate of growth and static population which tend to reduce rates of new investment as additional houses, schools etc are not needed as much). In 2000 the rate of overall investment per head of population was 19% below the national rate. The additional investment likely to go into the new growth areas in the South East is likely if anything exacerbate the gap in the future. • On a more positive note total net capital investment in our manufacturing sector was, in 2001, at £2.0bn slightly above the national average per manufacturing employee (although this reflects the capital intensive nature of much of our manufacturing base). 1.12
Our analysis of sector strengths at a region-wide level was on considerations of regional concentration and scale (which does not pick up local strengths and is to a significant degree constrained by the data which does not pick up the extent of supply chains, for instance in the aerospace sector) highlights chemicals (key in GVA and export terms), textiles, aerospace (key in GVA terms), pharmaceuticals (key in export terms and GVA), nuclear reprocessing and more modest specialisms in food & drink, paper/pulp and rubber/plastics. We have only a few strong specialisations in the service sector: these appear to be the travel industry, home shopping and to a lesser extent air travel and provision of tourism. Although we have large numbers of businesses and employment in businesses services, financial services and computing, in relative terms at a regional level these concentrations are modest.
1.13
Increasingly there is convergence across sectors (manufacturing and services) in activities and skills such as use of ICT, industrial and commercial design and advanced materials. Specialisms and strengths in these areas are much harder to identify using standard data sources. Although not highlighted by the employment or GVA data, the region has some emerging strengths in biotechnology (biomedical), environmental technologies and creative industries.
1.14
The North West is an important trading region. In 2003 the region exported £17.0bn of goods abroad, this figure equates to 17% of total GVA, and this proportion was very similar to the England average. We imported £16.6bn in goods, making the North West only one of three English regions making a net contribution to the UK balance of trade. Our exports are highly concentrated a few categories account for a large share of exports. In particular organic chemicals (£1.9bn or 31% of the UK total) and pharmaceutical products (£3.4bn or 29% of the UK total) are key exports from the region.
Ref: A/00163 Page 4
North West Economic Baseline: Final Full Report -Summary 1.15
The issues of social exclusion, worklessness and poor skills are highly linked together and mutually driven. They are also highly concentrated in areas of deprivation. Out of the gap of 80,000 fewer people not in employment compared to the England average around 70,000 is accounted for by just six local authority areas3. Growing the economy in the future and expanding employment will mean that regeneration and economic development are much more closely linked than in the past.
1.16
The importance of the region’s core cities of Manchester and Liverpool and their surrounding city regions has been apparent in the analysis. In both cases there has been strong economic growth and many of the region’s key knowledge assets are concentrated in or close to them. The extent of their economic influence, especially Manchester, is clear from the analysis of travel to work data (see 3.34). Figure 1-1: Summary of Current Challenges
Challenge 1: the region’s productivity gap in services, most noticeably business services which accounts for around £3bn to £4bn of the total gap
Challenge 5: a significant “knowledge” sector gap – it currently has about 10% fewer people employed in these sectors than the England average. It would need about 90,000 people
Challenge 2: the significant skills gap; the region has 120,000 more people with no qualifications and 80,000 fewer people with graduate level skills in the working age population than the England average
Challenge 6: the issues of social exclusion, worklessness and poor skills are highly linked together and mutually driven. They are also highly concentrated in areas of deprivation. Just six local authority areas account for nearly all the overall extra worklessness compared to the England average.
Challenge 3: the enterprise businesses per head and new England average. The North another 40,000 businesses if levels
Challenge 7: for our city regions to capitalise on their potential advantages of scale, they need to be drawing on a large and wide labour pool. Local transport access has been and could become an even more pressing issue hampering the effective working of these labour markets.
gap of around 20% fewer start-ups compared to the West would need around it were to mirror national
Challenge 4: poor performance in a large ‘tail’ of firms an innovation gap.
Looking to the Future 1.17
The baseline examines three future scenarios for the path of the region’s economy and the five sub-regions4 over the next 20 years. All such forward looks are fraught with difficulties. The scenarios suggest a range of future net job creation 2005 to 2025 of from as little as 30,000 extra jobs under a pessimistic longer term trends continue scenario, to 270,000 extra jobs under the two more optimistic scenarios. It is important to stress that these trends and scenarios are of course not “givens”. They may not happen as suggested and in part can be influenced by intervention.
1.18
All the scenarios have the same view about the future path of total and working age population growth. In practice this is unrealistic as population change responds to economic performance and indeed economic performance responds to population change. The region’s ability to attract and retain the more mobile, higher skilled generally younger workers will be critical factors in its future economic success.
3
These are Liverpool, Manchester, Knowsley, Salford, Halton and Barrow-in-Furness (based on the local Labour Force Survey 2003/4
4
Based on modelling work undertaken by Experian. The scenarios are: longer term trends continue; recent employment success continues; regional productivity transformation.
Ref: A/00163 Page 5
North West Economic Baseline: Final Full Report -Summary 1.19
The scenarios suggest different growth paths for the sub-regions. • Cheshire and Warrington: over the last couple of decades it has been the fast growing sub-region in the North West in terms of GVA, employment and population. The long term trends scenario suggests a significant reduction in the growth rate, largely because of slow population and so labour supply growth. This fall in growth rate has at its heart the assumption that housing (and site) constraints on growth will limit the absolute scale of employment change. The area is expected to perform particularly strongly under the productivity transformational scenario as it has a higher share of employment in the knowledge economy service sector and so is well placed to capture this element of the region’s transformation. • Cumbria: over the longer term this has been the poorest performing sub-region in employment and especially GVA terms. Cumbria faces a unique and difficult set of challenges in the future, such as the run down of the nuclear sector on the West Coast, and all scenarios suggest stagnation or decline in its economy. The scenarios paint a bleak picture for the Cumbrian economy. Its economy is also geographically remote from other parts of the North West and more self contained, in part because of its location and the fact that labour market flows with the rest of the region are very limited. It is therefore less well placed to benefit from growth in other parts of the region. • Greater Manchester: this is forecast to be the best performing sub-region under all scenarios, in part because it is expected to have the fastest growing working age population. It performs well under the recent employment success scenario where net employment growth of 140,000 jobs (2005 to 2025) and even stronger under the productivity transformation scenario (160,000 jobs or 60% of all net regional growth) where it benefits in a similar way to Cheshire and Warrington. GVA per capita is forecast to exceed the UK average by 2025 as is the employment rate under the two faster growth scenarios. The subregion does particularly well under the productivity transformation scenario. • Greater Merseyside: forecasting the growth path of the Merseyside economy produces the greatest contrast under the scenarios. The prognosis for the sub-region is gloomy under the longer term trends scenario, with total employment falling slightly from 2005, productivity lagging and the employment rate changing little. Under the recent employment success scenario there is much stronger employment growth (around 60,000 extra jobs to 2025) and consequent GVA growth, with GVA per capita improving significantly compared to the England average. The prospects are not as positive under the productivity transformation scenario as the sub-region’s employment base is less well placed to benefit from the productivity improvements and shift in pattern of employment. The greatest uncertainties about the future direction of the economy exist for Greater Merseyside – largely because its recent economic performance and record in job creation is clear break from past trends. • Lancashire: this area is forecast to perform slightly better than the regional average in terms of employment creation under all the longer term trends and productivity transformation scenarios, however less well under recent employment success. It is only under the productivity transformation scenario that the area is expected to see a relative improvement in GVA per capita (and 60,000 additional jobs).
Ref: A/00163 Page 6
North West Economic Baseline: Final Full Report -Summary 1.20
Under all scenarios, the region’s economic structure becomes more average compared to the UK as manufacturing is forecast to shrink considerably in relative importance. In 1989 manufacturing accounted for 32% of the region’s GVA and will shrink to an estimated 20% of the region’s total GVA in 2005. This trend is forecast to continue. Also overall manufacturing employment is forecast to decline significantly and fall faster than the rest of the UK due to our mix of industries and assumed relative performance. However, within this overall decline there will be opportunities for growth (from high value inward investment and indigenous growth) and there are sectors which are currently highly competitive.
1.21
A large part of the change is due to a change in nature of manufacturing activity with a concentration of higher value added activity and continued outsourcing of activities to be treated as service sector activity. Although within this overall relative decline some sectors perform more strongly (such as textiles, machinery and metals). The change in scale of manufacturing activity is in part due to changes in the organisation of production and a blurring of the boundaries between sectors. These changes are not of course givens and there are some signs that the regions’ relative performance in the creation of manufacturing GVA has outperformed the England average since 1999.
1.22
A great deal of the region’s net GVA and employment growth is expected to be in the communications and business services sector (which includes computing) – in line with national trends. This growth is in part dependent on the success of the business base of the region (including manufacturing) which is served by this sector and in part on the extent to which regional firms can provide high value added services to markets outside the region. The rest of net employment growth is expected in people related services: education; health (as a result of the ageing population and trend for increased spend on health) and personal services.
1.23
As well as these economic changes, the region in common with other parts of the UK (and Europe) faces significant opportunities (and threats) from demographic changes. Over the next 10 years the region is likely to see a modest growth in numbers of people aged 20-59, within which there will substantial growth amongst the over 50 year olds. However, there will be a substantial growth in the number of those aged 60 to 69 (120,000 or 18%) and their decisions about economic activity and retirement will have an important bearing on the size of the effective labour pool.
1.24
More profoundly, the number of people over 70 will grow rapidly, by 40% (315,000) over the 20 years to 2025 creating demands on health and social services, but also business opportunities in the region, in the rest of the UK and indeed in continental Europe. The impact of this age group will depend critically on their levels of savings and disposable income.
1.25
In contrast, in the region the number of young people is set to decline over the next 10 years. The number of people aged 15-19 is forecast to fall by 12% (60,000) between 2005 and 2015, compared to a rather slower decline in England (7%). This will reduce a traditional source of recruitment and training for many employers. However, there are some parts of the region, in the main conurbations and East Lancashire, which have relatively youthful populations, often with a strong ethnic minority presence. These areas could become important sources of recruitment in the future and so attractive for many employers.
Ref: A/00163 Page 7
North West Economic Baseline: Final Full Report -Summary 1.26
The growth in higher level skills in the workforce will tend to lead to greater use of the car and longer commuting patterns (other things being equal). Transport congestion and the sustainability of economic growth could become a serious issue in parts of the region. Although the available evidence is that this does not necessarily choke off economic growth in dynamic economies, it can lower quality of life.
1.27
There will be significant changes in the patterns of employment and economic activity by sector over the next couple of decades, releasing yet more previously developed land (which can be viewed as an asset or eyesore) which will have some influence on the spatial and site specific pattern of property demand. The former employment land which is released may of course have little economic value for employment use (or even in some cases housing use). Needless to say, the likely impact on the supply of and demand for employment land of different types and in different locations is complex.
1.28
The dominant market for North West exporters is the rest of Europe (nearly 60%). For these markets, access to the Channel Tunnel and to the main container and roll-on roll-off ports in the South East is vital as well as the Humber Ports for goods to Eastern Europe, Germany and Scandinavia. The importance of key arterial routes (road and rail) southwards and through the region (especially where they conflict with more local traffic) is likely to be conflicted by traffic growth in the absence of investment either for increased capacity or more intensive management.
1.29
The tradeable service sector, especially business services and communications, will make up an increasing share of regional GVA (and presumably exports). The largest external markets for these services are the greater South East and then overseas markets. National modelling work has identified these sectors as having high propensities for air travel. Good air and rail links to the South East will be important for domestic business services markets. For the development of export markets, good international air links will become an increasingly important facilitator of business competition. The presence of Manchester Airport in the region helps provide a competitive advantage compared to other Northern regions and parts of the country without easy access to the London Airports. Figure 1-2 Summary of Future Challenges
Future Challenge 1: there needs to be a serious and concerted effort to improve employability and reduce worklessness to meet future employment growth.
Future Challenge 5: Growth in higher level skills in the workforce will tend to lead to longer commuting patterns and use of the car. Transport congestion and the sustainability of economic growth could become a serious issue in parts of the region.
Future Challenge 2: demographic trends are clearly for an increased proportion of older workers who currently are far less likely to participate economically and a sharp reduction in younger workers entering the labour market.
Future Challenge 6: changes in the patterns of employment and economic activity will release yet more previously developed land and change the spatial and site specific pattern of property demand.
Future Challenge 3: most future net employment growth will be concentrated in a few sectors and in higher skilled occupations, where the current skills/qualifications base of the region appears inadequate.
Future Challenge 7: the importance of key arterial routes (road and rail) southwards and through the region is likely to be conflicted by traffic growth in the absence of investment either for increased capacity or more intensive management.
Future Challenge 4: successful knowledge sector locations in Cheshire and Warrington, the centres of Greater Merseyside and Greater Manchester and the central Lancashire area will face continued pressure. Employment growth (and housing demand) may not sit happily with the pattern of where there is likely to be most slack in the labour and housing markets.
Future Challenge 8: the largest external markets for the tradeable service sector are the greater South East and then overseas markets. Good air and rail links to the South East and good international air links will become an increasingly important facilitator of business competition
Ref: A/00163 Page 8
North West Economic Baseline: Final Full Report -Summary 1.30
Finally, one feature of the region is the extent to which parts of the region are much less integrated with the regional economy. This is particularly true for Cumbria which faces a unique and difficult set of challenges in the future and whose economy is much less connected to other parts of the North West and more self contained.
1.31
Figure 1-3 sets out a summary assessment of the region’s strengths, weaknesses, opportunities and threats.
Ref: A/00163 Page 9
North West Economic Baseline: Final Full Report -Summary Figure 1-3: Summary of the North West’s Strength, Weaknesses, Opportunities and Threats (SWOT) STRENGTHS •
• •
• • • • • •
OPPORTUNITIES
Strong performance in world class manufacturing sectors (especially chemicals, pharmaceuticals, nuclear and aerospace) where productivity is above average and which account for large part of exports and business R&D Diversity of regional economy – with no over-reliance on one sector Second largest concentration of higher education students outside London, large number of world class research departments and creation of new University of Manchester which is 5th largest research University in England Largest concentration of graduate level workers outside London and the South East Scale, mass and growth of two core cities (Manchester and Liverpool) and their centres… …large concentration of knowledge based industries, workers and high quality housing and living environment in Cheshire and Warrington and South Manchester Premier national and international visitor destination in Lake District, Chester and Manchester and Liverpool, access to Peak District and North Wales Major international gateway for the North of England (Manchester Airport) and other important gateways (Port of Liverpool and Liverpool Airport) Links with surrounding areas, especially North Wales, North Staffordshire and West Yorkshire, which increase economic gravity and potential labour pool of parts of the region
• • • • • • • • • • •
WEAKNESSES • • • • • • • • • •
Creation of world class knowledge centres in Liverpool and Manchester (especially from the growth of the new University of Manchester and its ability to operate on a global scale) Expansion of region as centre for high value, advanced manufacturing and opportunities in emerging sectors (e.g. biotechnology) Continued development of Manchester as second city (outside London) for creative, business services and many financial services Liverpool: Capital of Culture and associated image and tourism benefits and investment in tourism infrastructure Continued self-sustaining expansion of Liverpool City Centre Redevelopment of Blackpool and super casino development Continued growth of international gateways and external air connectivity, especially at Manchester Airport, and clustering of businesses needing international air connections Using international gateways to attract increased international tourists to the region Growth in Asian and Eastern European markets, for increasingly advanced goods and services Closer collaboration with surrounding regions Spreading and building on the higher value activity, higher skills base and higher rates of enterprise of many parts of Cheshire and Warrington
THREATS
Significant productivity gap in service sector, especially business services Under representation of many knowledge based industry sectors including business services Below average rates of innovation and overall investment in R&D, especially poor representation of non-University government funded R&D Below average rates of workforce with higher level skills and largest single concentration of adults with no or poor qualification Below average propensity of employers to invest in their workforce Areas with concentrations of deprivation and worklessness High rates of worklessness and poor qualification/low skills in many ethnic minority groups, people with disabilities and lone parents Low rates of overall business start-ups and lack of culture of enterprise in many areas Large concentrations of brownfield land and poor quality housing in low demand areas Coastal resorts which have lost traditional markets and have been in decline
• • • • • • • • •
Ref: A/00163 Page 10
Continued globalisation of manufacturing and now service activity and shift of many lower value lower paid jobs overseas (e.g. in call centres) Concentration of future Government investment in housing, transport and R&D in south of England (e.g. growth areas) and continued economic dominance of London Concentration of business R&D in sectors which are vulnerable to environmental and other government policy changes (e.g. procurement) Impact of higher energy costs and environmental legislation on chemicals sector Demographic trends acting as a break on employment growth due to reduction in entry of young people and growth in older workers Adverse prospects for nuclear sector, especially in Cumbria Impact of post-2006 EU Structural Fund reforms reducing resources for investment Growth in internal congestion, especially in Greater Manchester and urban motorways, limiting effective operation of city regions Impact of low cost air travel and growth in competition for UK visitors to region’s tourism destinations
North West Economic Baseline: Final Full Report –Key Issues and Policy Responses
2.
Key Issues and Possible Policy Reponses
2.1
The work on the economic baseline has identified a wide range of issues which we regard as of sufficient importance to highlight for the purposes of the RES review. These are summarised below in seven matrices (M1 to M7), five relating to the current themes of the RES (business development, skills and employment, regeneration, infrastructure and image), the sixth relating to a number of spatial issues we have identified which cut across the themes and the seventh to key external challenges and opportunities. In each matrix, we set out the key issues, the evidence base for each issue and possible policy responses/solutions for the RES. This set of key issues draws on but extends the set highlighted in the Issues Paper produced for the NWDA as part of the RES review on 14 March 20055.
2.2
Clearly, the key economic issue faced by the region is how to close the £14bn output gap on the England average by increasing the region’s growth rate above the average. As identified in the baseline a quarter of this gap relates to below proportion of people in work and three quarters to the productivity of those who do work. Behind these headline factors lie a complex set of issues which are picked up below.
2.3
The purpose of these matrices is to highlight some of the choices that are available to the region. The possible responses are not presented as definitive solutions: they simply draw on the work in the baseline analysis and the consultants’ experience and knowledge of the North West and other regions. The NWDA and its partners will draw on other information, especially the evidence of those interventions which are making the most difference, in drawing up new directions for the new RES.
5
http://nwda-cms.amaze.co.uk/DocumentUploads/ReportIssuesReportFinal.pdf
Ref: A/00163 Page 11
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 1: Key Issues Relating to Business Development and Competitiveness Issues 1.
Knowledge sector gap: relative lack of “knowledge economy” activity…low rate of overall productivity in the business services sector
Evidence Base •
•
•
10% fewer people employed in broadly defined knowledge sectors than the England average or a gap of 90,000. Business services sector accounts for around 20% of North West GVA rather than 25% in England The difference in productivity is around 20% below the England average or around £4bn in 2003 The issue stems from a combination of factors: the market segments firms operate in; the skill levels used; and the nature of business activity in the region (large element of back of office functions).
Some Possible Responses •
•
•
•
•
2.
3.
Concentration of R&D and Innovation Activity in a few Key Public and Private Nodes and … Innovation gap: apparent long tail of firms with below average rates of innovation
•
•
HEI research funding is heavily concentrated in two HEIs and private R&D is concentrated in a small number of sectors and firms. Although wider development and innovation activity is more widely diffused Region’s rate of patent applications per adult 27% below England average and second lowest proportion of “innovation active” firms of English regions
•
• •
No one single “magic bullet” solution possible as issue reflects well established structural trends and dominant role of London in the UK’s service sector economy. However, there could be greater focus within the RES to creating conditions for growth in these sectors including: suitable sites/premises; skills development for the sectors; extra emphasis to cluster networking (to offset greater economies of agglomeration in London). Across business services and wider traded services sector need to ensure existing business support activity encourages firms to move into higher value, national or international markets Scope to use regional cost competitiveness to attract business service and media related activity out of London and the South East and help build up critical mass of expertise and skills. Focus additional business support/cluster effort on the computing/digital sector as one where growth prospects are highest, region has performed well in recent years, and there is a low relative concentration on average across the region. The region’s universities have a key role to play in developing and exploiting the North West’s knowledge base. The North West has a stronger representation of universities than most other regions, and these can play a vital role in supporting high-tech centres of excellence to encourage the formation of knowledge-based SMEs. Given that the major Universities in the North West are located in the larger urban conurbations, this is likely to further cement cities’ role in driving the knowledge economy The challenge is to try and diffuse and spread the (benefits of) investment more widely within the region and consciously broaden the investment (continued support for spin-out firms). Also to engage with SMEs and encourage wider rates of innovation. The region also needs to try and attract additional sources of R&D to complement those already here (and avoid too many eggs being in one basket). Finally, it is clearly vital to maintain and help expand those key sources of R&D already in the region (private and public).
Ref: A/00163 Page 12
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 1: Key Issues Relating to Business Development and Competitiveness Issues 4.
Enterprise gap: low overall rates of business startup
Evidence Base •
•
20% per head fewer new business starts and overall stock of businesses compared to England average in 2003 The gap appears to be created by a combination of social demographic and demand side condition factors, plus important cultural reasons.
Some Possible Responses • 9
9
9
•
5.
Low survival rates
•
•
The analysis suggests that there are three types of areas and groups where different actions are needed in a more tailored approach: First, low enterprise areas (cold spots) which are explained by poor demand conditions and socio-demographic factors (e.g. Knowsley). Here the focus should be on tackling the social and demographic issues holding back enterprise as well as cultural attitudes. Social enterprise can and does have an important role to play in these areas. Second, strong enterprise areas (e.g. Macclesfield) where there is an embedded enterprise culture and the challenge is to channel and potentially spread this entrepreneurial expertise more widely Third, areas where, given the objective characteristics, we might expect higher rates of business start-up (e.g. Bolton), here the focus should be on helping address cultural attitudes and providing a supporting environment. In a similar vein a regional focus could be on those groups where enterprise rates nationally are significantly higher than the region (e.g. women, black residents, professional/associate professional occupations)
•
Three year business survival rates at 63.6% was 3.6% below England average in 2002 (for business registered for VAT in 1999) Survival rates are particularly low in Greater Manchester (6.1% below the England average)
Existing business support services are aimed at improving business management and performance, the below average rate of survival suggests that these may not be getting through to the target markets and need a further push. • Focus on survival rates and business skills may need a particular focus in Greater Manchester Note: it may be the case that efforts to raise the start-up rate will lead to a reduction in survival rates as a result of greater churn in the business base •
6.
Gaps in management skills
•
Evidence from North West ASPIRE business survey that “business management skills” are one of the main skills gap (the second highest skills gap identified by 28% of employers) and skills gaps were more associated with manager and senior officials than any other occupation.
7.
External business drivers
•
See Matrix 7 below
Greater emphasis in regional and sub-regional skills investment priorities [Note: already identified as one of the region’s 10 skills priorities]
Ref: A/00163 Page 13
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 2: Key Issues Relating to Skills and Employment Issues 1.
Higher Skills Gap: below average concentration of workers with Higher Level Skills
and
Evidence Base •
•
Mismatch future skills demand and current and pipeline supply
Some Possible Responses
Currently we have 80,000 fewer adults of working age with NVQ4+ level qualifications than the England average. The rate at 23.1% of the working age population is around 2% points below the England average but 5% and 8% points respectively behind the South East and London averages. The region is a net importer of young people studying for Higher Education qualifications and has the second largest student population outside London. It follows that the region must be a net exporter of those who then attain degree level qualifications
•
•
•
•
2.
3.
Basic/low Skills Surplus: above average proportion with no qualifications
Concentrations of low skills by labour market group
•
•
Currently we have around 120,000 extra people of working age with no qualifications (a good proxy for those with low level skills). The rate at 17.7% 2003-4 is the third highest of any English region and compares to 14.8% England average. Those with poor skills are highly concentrated in a few districts (see 0). As well geographical concentrations, low and lack of basic skills are disproportionally focussed on some labour market groups: lone parents; certain ethnic minority groups; older workers
•
•
•
Ref: A/00163 Page 14
There will need to be three strands to tackling this issue, although it is the case that attracting and developing these skills cannot be done in isolation from the creation of demand for the skills (or else those with higher skills are likely to migrate to other regions). Strand 1: up-skilling the existing workforce and those not in work with good intermediate level skills. This solution may be more important in some parts of the region than others where there tends to be less immigration and there are fewer students (e.g. Cumbria and to a lesser extent Lancashire). Actions by HEIs and activity such as AimHigher initiatives will work here. The region’s HEIs have a good record on the widening participation in the HE agenda. Strand 2: graduation retention of more of the large number of graduates leaving our Universities (although these graduates will only stay if there are the right opportunities in the region). This will tend to be focused on the large cities and to a lesser extent Preston and other locations with HEI presences (such as Chester/Warrington and Carlisle). Strand 3: graduate/higher skill worker attraction. Need to improve the quality of life offer and promote the living/working offer of the region to people with higher level skills in other parts of the UK. A lack of basic skills and worklessness are highly correlated and also highly concentrated geographically. The implication is that efforts to raise basic skill levels (which need to start in school) need to be concentrated in areas of greatest deprivation, particularly where these are located close to areas of growth and employment opportunities. There are of course a multitude of barriers to employment of which poor skills and qualifications is one of many and these issues need to be tackled in a holistic way. As well as a geographic focus, efforts to address basic skills need to have, where appropriate, particular delivery mechanisms to help address the needs of these groups
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 2: Key Issues Relating to Skills and Employment Issues 4.
5.
Below average rates of Investment in Skills
Overall number of replacement demand jobs will overshadow net new jobs
Evidence Base •
•
•
6.
Need to expand overall supply of Workforce
•
Some Possible Responses
On average employees in the region are less likely than nationally to have received off-the job training in the last 4 weeks (10.9% compared to 11.9% in England) or 13 weeks (21.4% compared to 23.0% in England) in 2002. This difference is not largely explained by the sectoral composition of employment in the region, as workers in the region are less likely to have received formal off-the-job training across most sectors (except production sector).
•
•
The low rates of skills investment suggest that many firms, sectors and parts of the region may be stuck in a ”low skills equilibrium” of low skills in the workforce leading to low rates of investment in skills. If this continues the chances of the region raising its game in terms of the up-skilling of the workforce and growth of the knowledge economy will be limited. There is a need to continue and enhance the work of “demand stimulation” being undertaken across all sectors.
In the future, Skill Level 4 occupations (broadly NVQ Level 4/degree level) will account for the majority of net growth in the region. However, Skill Levels 2 and particularly 3 will account for the bulk of overall demand including replacement demand (around 1,600,000 new and replacement jobs or 73% of total forecast demand 2004 to 2010) Once replacement demand is included many of the occupations which dominate numerically are relatively low skilled, requiring NVQ Level 2 qualifications at most. They are in sectors which, by and large, are catering for the needs of the North West’s population.
•
These occupations do provide important opportunities for job entry for those with poor and lower skills and the workless. The challenge will be to try and develop entry points that also develop into a “skills escalator” for existing workers in the sectors (e.g. as is happening in the health sector)
The slow rate of increase and in some cases decline of those of working age (based on current retirement ages) will act as a constraint on future employment and economic growth, especially in parts of the region where employment rates are already high
•
See below for responses, although there is a real challenge and possible paradox here: it may be that future expansion of the workforce is met by inmigration, especially international in-migration, or as an alternative reduction in net out-migration to the rest of the UK and if the region is very successful growth in net in-migration.
Ref: A/00163 Page 15
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 2: Key Issues Relating to Skills and Employment Issues 7.
Impact of demographics trends on overall labour supply – older people
Evidence Base •
•
•
Some Possible Responses
Over the next 10 years the region is likely to see a modest growth in numbers of people aged 2059, largely accounted for by growth amongst the over 50 year olds. However, there will a substantial growth in those aged 60 to 69 and their decisions about economic activity and retirement will have an important bearing on the size of the effective labour pool. The future value of, access to and funding of pensions for those reaching retirement will be a critical factor here.
•
•
• •
Many sectors will need to alter recruitment, training and development policies to adjust to the new age composition of the workforce. Many older workers have increasing caring responsibilities for older relatives and so flexible working practices will be needed and offering opportunities for a phased approach to retirement. The ASPIRE data suggests that most firms are little aware of or prepared for these demographic changes, there is a need to raise awareness locally and sectorally of the challenge and opportunity. The need to upgrade skills will also need to take account of older workers (many of whom tend to lack formal qualifications). The demands for locations for retired older workers may need some changes to the planning polices to take account of their needs (size of dwellings and locations)
8.
Impact of demographics trends on overall labour supply – younger people
•
The number of young people in the region aged 15-19 is forecast to fall by 12% (60,000) between 2005 and 2015, compared to a rather slower decline in England (7%).
•
The reductions in numbers of young people entering the labour market either from school/college or eventually university will reduce the traditional supply of new recruits for many firms and so there will be greater need to look to upgrade the skills of existing workers
9.
Growth in number of people over retirement ages
•
The number of people over 70 will grow rapidly, by 315,000 (40% compared to 44% in England) over the 20 years to 2025 creating demands on health and social services, but also business opportunities. This growth will not be uniform across the region and may be concentrated in current retirement areas (coastal resorts and more rural areas).
•
Need to ensure the region and parts of the region can capitalise on the market opportunities for growth in products and services for older people in the UK and the rest of Europe, covering health care, recreation, travel etc. Consideration should be given to how far very large concentrations of those over retirement age in locations is desirable in terms of the impact on local economy dynamics. There is an opportunity to further harness the role of older people in the voluntary/community sectors and in acting as carers.
•
•
•
Ref: A/00163 Page 16
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses
Matrix 3: Key Issues Relating to Regeneration Issues 1.
Strong and long lasting spatial concentrations of deprivation
Evidence Base •
•
2.
Impact of deprivation as a constraint on economic development
•
Possible Responses
The region has 28% of the most deprived 10% super output areas in England and 22% of the worse 20%. These most deprived communities are heavily concentrated in the region’s urban conurbations. In general terms the situation is improving, although at a relatively slow rate. There have been improvements in many indicators of deprivation, often at a faster rate for the UK (for example, between 1999/0 and 2003/4 the number of people in employment increased by 1.9 percentage points (compared to 0.2% for England). Research with the business community from places such as East Manchester highlighted the constraints upon creating successful business districts by issues such as crime, an inadequate supply of sites and premises, and access to workers and skills.
• •
•
• •
•
Ref: A/00163 Page 17
Continued holistic action to tackle deprivation across the North West, but with focus of resources on the most deprived communities. The development and delivery of strategic local interventions that link economic growth, regeneration and public service delivery improvements, which command the support and commitment of key public, private and community partners. Development of stronger linkages between economic development measures across the city regions with actions to assist the workless in the deprived communities to access the opportunities being created.
One implication is that the particular focus on efforts to tackle the “externalities of deprivation” (dereliction, crime etc) could be on those areas of current deprivation which are closest to or part of likely growth areas in the future, rather than necessarily those areas in greatest need. There is a need for a more joined-up approach to the promotion of enterprise and related support in disadvantaged areas. The creation of an inter-agency task group charged with developing a strategy to address the needs of the target group might be helpful. It is important to draw on the good work which is already occurring in parts of the region (e.g. the Merseyside Entrepreneurship Commission is due to report on its extensive research and analysis in spring 2005).
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 3: Key Issues Relating to Regeneration Issues 3.
Close link between deprivation, social exclusion and worklessness
Evidence Base •
•
Possible Responses
The employment rate differential between the North West and the England average gives a gap of around 80,000 people. The gap in employment is highly concentrated in a few areas - six local authority areas account for 70,000 of the gap (Manchester, Salford, Liverpool, Knowsley, Halton, and Barrow). Low levels of labour market participation are highly correlated with low skill levels, health issues, caring responsibilities and ethnicity (see page 60).
•
•
• •
4.
Strong people barriers to accessing employment
•
Many of the high-employment growth districts also have persistently high economic inactivity rates and unemployment, suggesting that local residents have not been able to take full advantage of opportunities created relatively close to them (40% of the North West’s unemployed reside in the 10 districts with the highest recent employment growth, namely Manchester, Sefton, Knowsley, Rochdale, Liverpool, Preston, St Helens, Chorley, Trafford, South Ribble).
•
•
• •
5.
Transport barriers to accessing employment
•
Whilst urban centres tend to be well served by direct and frequent transport services, some employment locations in non-central areas can be difficult for people in lower skill/paying jobs to reach by public transport (for example, in Speke-Garston or Chester Business Park) and journeys from some more peripheral urban areas are still relatively difficult by public transport (for example Skelmersdale to Liverpool)
Ref: A/00163 Page 18
•
Whilst a great deal is already being done to tackle these issues, there is a need for more targeted action upon those groups who face multiple forms of labour market disadvantage and have the greatest needs in deprived communities. This action needs to recognise and respond to the intensity and range of needs which these groups have. Stronger linkages between actions to tackle worklessness and related issues of deprivation (low demand housing, crime, education, local services and facilities, public realm, etc), in order to provide ‘attractive’ neighbourhoods which will help retain these people in their communities (rather than relocating to better performing neighbourhoods) The voluntary and community sector (VCS) has an important role to play in ensuring appropriate delivery of regional and local regeneration strategy and tackling these deprivation issues. There is the need to recognise not only the wide range of constraints and barriers to people gaining work, but also the importance of some financial (the dependency issue) and care issues. There is a need to fully understand and respond to the complex factors which constrain the ability of people gaining and retaining work – these include skills, aptitudes and attitudes, transport and financial barriers. Coordinated action to provide the range of integrated support which the workless in these communities require and can access locally. This would include action with employers, new and existing, to help them recruit and retain these workers. Extension of support for people, whose needs are greatest in making the transition into the labour market, including Incapacity Benefit claimants and in-migrants. Support for low skilled who gain work in order to help them retain work, develop their skills and progress in the labour market. Recognition that whilst the concentrations of worklessness are often in close proximity to employment growth areas, there are real or perceived transport barriers. There is the need for both better information about transport services and improved transport provision (quality, frequency and reliability) linking areas of employment with areas of high worklessness.
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 3: Key Issues Relating to Regeneration Issues 6.
Presence of potential and actual neighbourhoods of low and declining housing demand
Evidence Base •
•
•
7.
Housing affordability in rural (and other) areas
•
Possible Responses
However, as the region has enjoyed a period of sustained economic growth, the housing market has increasingly become polarised between areas of strong demand and house price inflation and areas of low demand and failure. The scale of the low demand issue is very large – in total there is an estimated half a million properties at risk, with the greatest concentrations in the urban cores and peripheral housing estates of Greater Manchester and Merseyside, as well as East Lancashire. Amongst the 19 North West districts which fall within the top 20% of deprived districts nationally, the overall population has fallen by 98,800 (-2.5%), while those in the top 10% have experienced a total fall of 74,900 (-3.5%) – this compares to an overall population increase between 2000 and 2003 of 0.3%.
•
South Lakeland, Eden (in Cumbria) and Ribble Valley are three districts with the highest ratios of house prices to local average earnings in 2004. Aldo affordability issues in parts of Cheshire.
•
Ref: A/00163 Page 19
•
• •
•
There is the need to make informed decisions about how and where the efforts to transform housing markets to support the development of the knowledge economy and the sustainable growth of the region is required Continuation of efforts to secure mixed neighbourhoods in areas with issues of low demand. Given the proximity of many of these housing areas to the centres of employment growth, some have the potential to play an important role in meeting the housing needs of the expanding workforce and this in turn with the right support will contribute towards the turnaround of these areas. However, these investments need to be made in conjunction with related investments to improve public service provision and the improvement in the stock and relevance of skills. Recognition and response to those neighbourhoods which are at risk of slipping into a spiral of low housing demand and related quality of life issues. Whilst these are not the most deprived, they are often in close proximity to them and are at risk of becoming so in the future. Increased provision of low cost housing in rural locations. Consideration of radial solutions to develop affordable housing funding via taxation. Also need to address housing affordability pressures in Cheshire, but without undermining the regeneration of the urban cores. An issue will be whether the planning system, with appropriate sequential tests to safeguard wider economic interests, can improve the function and growth performance of those localities with very tight labour markets.
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses
Matrix 4: Key Issues Relating to Infrastructure Issues 1.
Continued production of brownfield land as a result of industrial change
Evidence Base •
•
•
Possible Responses
The North West has some 11,390 ha of previously developed land (PDL) – this is the largest stock of any region in England (representing 17.7% of the total in 2003). The West Midlands and the North East have 9.8% and 6.6% respectively. Despite considerable remediation efforts the total stock of PDL in the North West has remained at broadly the same level in recent years and is fairly concentrated in particular locations across the region. The employment scenarios suggest the flow of additional PDL will continue – it will remain a major and ongoing challenge for the region for the foreseeable future.
•
•
•
Ref: A/00163 Page 20
The scale of the PDL problem in the region is such that it greatly outstrips the resources available to address it in full (the NWDA estimates that it would cost between £1bn and £2bn to tackle fully, depending on remediation approaches adopted). Partners in the region therefore need to focus on deploying their resources where they can achieve the greatest strategic impact. This approach needs to reflect the opportunities to link the development of PDL into the changing nature of demand for land (due to sectoral change) and the spatial implications. In more buoyant areas (for example, Cheshire and Warrington) PDL may help to overcome (in part) the greenfield constraint to growth. In ‘edge of city centre’ locations, there are opportunities to use PDL to present attractive propositions for knowledge based employment locations (e.g. due to proximity to HEIs and other science/ technology based developments). Need to recognise that some of the best opportunities for reuse of PDL are for housing, leisure and woodland.
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 4: Key Issues Relating to Infrastructure Issues 2.
Changing demand for type and location of sites and premises for sectoral change
Evidence Base •
•
Possible Responses
Total take-up of employment land in the North West varies across the region, with highest takeup rates in the major conurbations although takeup rates elsewhere are also significant (for example in Warrington, Halton, other parts of Cheshire and parts of Lancashire). These sectoral changes in the region, with the loss of manufacturing employment and increased service sector employment, are expected to continue into the future. Between 2000 and 2010 manufacturing employment is expected to fall by around a quarter and more than 120,000 jobs. Over the same period the scenario work suggests that service sector employment will grow strongly, creating more than 400,000 jobs.
•
•
•
•
Ref: A/00163 Page 21
In identifying future strategic employment sites one of the key factors to be considered should be the extent to which the North West’s strategic site offer is sufficiently strong and distinctive (with critical mass of services and functions) to attract investment in high value activities in target sectors. The opportunity to capitalise on strong or world-class assets such as our HEIs and private sector R&D (as in Alderley Park) should be a key consideration. Increased use of planning conditions, more tightly drawn employment land policies and more flexible use of Section 106 agreements may also enable the region to safeguard key employment sites (where demonstrated to be appropriate) and communicate its strong commitment towards attracting and supporting high value target occupiers whilst directing other demand to other sites in the region. But whilst major manufacturing inward investments into the UK are relatively few in number they are potentially significant sources of employment and particularly GVA for the region. The region needs to continue to make some provision for this type of investment and should concentrate its efforts on those parts of the sector where it has the greatest advantage and potential. Despite these industrial changes, the likelihood is that businesses will still seek to locate in and around existing regional poles and other settlements within the NW Metropolitan area and key towns and cities outside the NW Metropolitan area, where access to existing transport nodes and interchanges where accessibility is high. In other locations, developers should be encouraged to improve transport accessibility and other measures to reduce impact on the network.
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 4: Key Issues Relating to Infrastructure Issues 3.
Ability of main conurbations to benefit from potential benefits of scale as a result of congestion and lack of connectivity
Evidence Base •
•
•
Possible Responses
Economic growth and gains in employment experienced in the region in recent years have increased demands upon the strategic transport infrastructure. This has manifested itself in increases in private car usage (as a result of both rising car ownership and increased propensity to travel) and strong increases in rail patronage. The increase in traffic on major roads in the North West grew by 21% between 1993 and 2003 (same % increase for England as a whole). Rail patronage increased by 43% between 1995 and 2003 (England =35%). This increase in traffic volumes has almost inevitably resulted in increased congestion on the region’s roads and this growth is heavily concentrated spatially around the region’s major urban areas.
•
•
•
•
•
Ref: A/00163 Page 22
In general the needs to maintain efforts to lobby for those improvements to the region’s strategic transport infrastructure that have been clearly and cogently identified as of most importance to region’s economic competitiveness. This should also include working with other regions (for example the West Midlands) where improvements are mutually beneficial. Need to focus on particular pressure points which currently constrain ability to effectively link people to jobs in the region’s major conurbation and their hinterland. Important improvements include increasing the capacity to get rail services into Manchester city centre, M62/ M60 in northern Greater Manchester, parts of the M6 through the region. There is also a need to secure gains through better management of the existing capacity of the road and rail network (actions which tend to be much cheaper and quicker to implement than big capital projects). For example, adding capacity to the rail service through adding carriages to existing trains to increase capacity, closing little used station to improve journey time and punctuality and recasting the timetable to optimise supply to meet demand. Ongoing work to promote modal shift (from cars to public transport) will be important in some areas as a means of minimising or reducing congestion and other costs associated with private car usage in a growing economy. Also encouraging people to make greater use of opportunities for homeworking. Where appropriate (and recognising that transport is not the only issue), there is the need to develop transport routes that more clearly connect areas of low employment with places of high employment growth. The achievement of Metrolink Phase 3 and Liverpool LRT are important aspects of this.
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 4: Key Issues Relating to Infrastructure Issues 4.
Potential bottlenecks in and outside the region in accessing markets for goods
Evidence Base •
•
•
Possible Responses
The volume of freight moved by road has also increased significantly since 1993 (16.4%, England=19%), placing additional burdens on the strategic road network. Key congestion hotspots on strategic routes include stretches of the M6 through Cheshire and into the West Midlands, access to Manchester city centre, and the M60/ M62 in north Greater Manchester. Looking across both on and off-peak traffic, the North West has the highest traffic congestion of any region outside London (5 seconds lost per vehicle km, compared to an England average of 4.2)
•
•
•
•
5.
Potential bottlenecks and capacity issues for intercity rail travel and access to markets
•
•
Growth in knowledge economy sectors and employment is likely to drive up demand for rail travel to London and the South East (by far the main business service market in the UK) and also better connections to other adjacent city regions (Leeds especially). Currently there are key pinch points in the region’s rail infrastructure, especially the Manchester Rail Hub
•
• •
Ref: A/00163 Page 23
Could have a significant impact upon competitiveness if not addressed (for example, M6 through Cheshire to the West Midlands (Junctions 19-11); M62/ M60 in northern Greater Manchester; M62 between Liverpool and Manchester). The concentration of the most significant urban areas outside London generating local traffic and the strategic highways network in the region does and will create further congestion problems. The region needs to press for coordinated action by a range of bodies in a number of areas, for example: ensure that the region articulates in a clear voice the need for national funding bodies (e.g. Strategic Rail Authority) and government to give due priority to key agreed transport improvements needed in the North West; better cross-modal co-operation in the investment in and operation of the region’s transport system; lobby transport deliverers and those responsible for co-ordination to implement improved integration across public transport modes; research into what lessons can be learnt from the congestion charge in London and to take part in the debate being led by the Government on this issue. Planning policies need to acknowledge the major strategic transport arteries within and outside the region and recognise the potential for developments to add further congestion to them. The Network Rail's Regional Planning assessments and Route Utilisation Studies will set a long term framework for investment in rail services in the region. The region needs to consider their recommendations and decide whether additional investment is required in the longer term. There will be a need for continued lobbying for additional funds, although this will not be effective unless a robust evidence base for demand and a business case for investment is available. There is also a need to explore methods of self-financing. Prioritises include the Manchester Rail hub, as well as improved links to Liverpool, Preston, Manchester, Leeds and Sheffield.
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 4: Key Issues Relating to Infrastructure Issues 6.
Scope to benefit from our advantage in terms of air accessibility to support the knowledge economy
Evidence Base •
Possible Responses
North West has the best air connectivity of any region outside the Greater South East with Manchester Airport serving as the north’s main international air hub (carrying 78% of all international scheduled passengers in the North West and 63% from the North of England).
•
•
Ref: A/00163 Page 24
The scope to expand the volume of passengers and freight through the region’s main airports will be constrained by surface access. There is a need to improve surface access to key airports (particularly Manchester) and ensure sufficient airside infrastructure capacity in the longer term. It is important that Manchester Airport is granted 5th Freedom Rights. The accessibility and proximity of airports is a key driver of the growth of knowledge based sectors. There is a need to consider the potential for and location of sites for knowledge economy sectors with easy access to Manchester Airport in particular.
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses
Matrix 5: Key Issues Relating to Image Issues 1.
Significant improvement in image but perceptions still a constraint on investment and inmigration
Evidence Base •
•
•
2.
Opportunity to build on major regional development – especially Capital of Culture
•
Possible Responses
The available evidence suggests that the image of the region internally and externally has improved, both as a place to live and to invest. Businesses and opinion leaders from elsewhere in the UK generally view it as a good business location (62% stated good compared to 17% poor). The improvement in perceptions has been driven in part by the regeneration of the region’s major cities and their rising profile, including the successful hosting of major events such as the Commonwealth Games, as well as quality of life, cultural and leisure opportunities available. Despite regeneration led improvements to the region’s image, problems do remain and parts of the region still suffer from associations with industrial decline, crime and poor environment. The experience of hosting the Commonwealth Games has highlighted the significant short and longer term economic, image and tourism benefits which can be gained for Merseyside and the wider region.
•
•
•
•
•
•
Ref: A/00163 Page 25
The region needs to continue to work hard to overcome out dated perceptions of the North West and to promote an image which is more driven by its knowledge assets (e.g. progressive universities, a major financial centre, etc) or high-tech industries (which will become easier as the sectoral composition changes) and significant successes. There are important opportunities to build upon including Liverpool Capital of Culture in 2008, the relocation of parts of the BBC to Manchester; the proposed re-investment and rejuvenation of Blackpool (still with the UK’s most visited attractions), including the development of casinos; the on-going revitalisation of the main city centres and improved visitor and cultural offerings. In identifying Liverpool as one of the region’s key ‘brands’, the RTS recognises the potential for the development of Liverpool, Merseyside, and indeed the wider region as a major tourist destination in the period up to Liverpool Capital of Culture in 2008.
The benefits and opportunities are considerable. However, careful and coordinated planning is required across the region to understand the nature of the benefits and how these can be both maximised and shared across the region. Putting in place the planned new and improved facilities and the promotional and marketing effort will need to be a priority leading up to 2008. This will require a considerable effort from partners. There is scope to promote the region’s considerable strengths in multicultural arts and heritage assets of the region, including the tourism potential of its lesbian/gay community.
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 5: Key Issues Relating to Image Issues 3.
Scope for higher penetration of in-bound leisure international tourism market
Evidence Base •
•
4.
Scope for higher penetration of international business tourism market
•
•
5.
Threats over core UK based visitor markets from competing destinations (especially overseas)
•
•
Possible Responses
The region performs relatively poorly in capturing international tourism (5.9% of the total and 13.4% of the total excluding London). The value of international tourism within region has increased in recent years (rising from £500m to £611m or +22%). Whilst Manchester and to a lesser extent Liverpool have benefited from improved international flight connections (they are now ranked 3rd and 9th in terms of international visitors), other parts of the region such as Cumbria don’t fare particularly well.
•
•
As suggested above, the region does not do particularly well in attracting international business tourism (5.9% of England’s total, or 13.4% if exclude London), although it is boosted by the presence of Manchester Airport. Whilst the situation is improving, the region has yet to realise its potential in attracting international business tourism, including business conferences and trade events.
•
The region does reasonably well in capturing UK visitor tourism (13% of the England total and 15% excluding London), although this has declined over the period 2000-03, although some of the region’s key tourism areas such as the Lake District do far less well in attracting visitors from markets in the South. A key threat is the growth in popularity of low costs flights to European destinations.
•
Ref: A/00163 Page 26
•
•
The opportunities arise through improved accessibility of the region (availability of flights and costs), the renaissance of the region’s cities, relative proximity of major tourism attractions (e.g. Lake District, Chester) and the emergence of a strong events programme. There is a need for a strong vision in general, including distinctive visions for the Lake District and the region’s historic towns and cities. Public sector investment should be concentrated on activities which secure additional visitors to the region, reducing leakage out of the region or displaces visitors over more crowed locations. This should in turn be reflected in the appraisal of project applications. Continue on-going strategic investments in conference and events infrastructure and supporting infrastructure (such as hotels). Take advantage of the strong awareness and offer of the region’s major cities, accessibility to mainland Europe and strong trade links to build international conference and trade business.
There is a need for the region’s tourism sector to respond to the threats presented by the expansion of low cost airlines which has opened up competing destinations in Europe. This includes developing the product offered by key destinations in the North West and providing the range and quality of short breaks which will be able to compete. Ensure that there are improved internal transport links to south of England – both rail and air.
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses
Matrix 6: Key Spatial Economic Issues Issues 1.
Future economic prospects and role for Cumbria
Evidence Base •
•
Some Possible Responses
A relatively isolated and self contained part of the region with few strong labour market linkages. Dependent on a few, vulnerable sectors (nuclear, defence, agriculture). Cumbria is unlikely to benefit much from expansion and growth in rest of region. It is worth bearing in mind that the more accessible parts of the County along the M6 (Kendal, Penrith and Carlisle) have relatively strong local economies.
•
•
•
•
2.
Future growth path in Cheshire and Warrington
•
•
The rate of growth in the sub-region has been slowing down, in part because has reached near capacity in terms of labour supply, sites and housing. Forecast to grow modestly driven by near static working age population, yet part of the region with strongest concentration of knowledge economy sectors (c. 29% of employees in employment in 2003 compared to 25% for the region as a whole) and highest rates of GVA per head and per employee Sub-region is home to a large part of the region’s chemicals industry, pharmaceutical industry (AstraZeneca) and research in the nuclear sector (e.g. BNFL). It makes a very important contribution to higher value activities and to the region’s knowledge economy sectors.
• •
•
• •
Ref: A/00163 Page 27
There will almost certainly need to be very specific policy responses for Cumbria – both its rural and industrial areas. Cumbria can offer a unique quality of life in a regional context and with the advent of broadband is now better connected in ICT terms than before. The ability to attract knowledge intensive sectors (due to the small size of the labour pools) is realistically limited and may need to focus on small businesses where owner managers choose to locate. In West Cumbria opportunities from the Nuclear Decommissioning Agency are already being explored, although this is unlikely to replace the large number of jobs which will be shed at Sellafield over the next 10-15 years. However, government policy on the future of the nuclear sector is still unclear. There are opportunities to continue to harness tourism opportunities and increase the economic value of tourism, especially in areas adjacent to the Lake District (e.g. Hadrian’s’ Wall, coastal areas) The issues are complex in this sub-region where there has been concern in the past over the environmental sustainability of any future growth. There is clearly scope to explore ways of increasing the available labour supply within additional local house building via improving local transport links to North Staffordshire and those parts of Greater Merseyside (e.g. the Wirral and St Helens) and Greater Manchester (relatively close to Salford and parts of south Manchester). There is a strong case for making site provision for internationally or nationally mobile knowledge economy sector businesses in parts of the subregion which have proven attractive to such businesses (Chester area, Warrington and areas near the Manchester Airport) There is also a need to ensure those existing key knowledge assets and firms in the sub-region can grow and expand. There are also strong economic, business and labour market links with North Wales that could be further exploited
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 6: Key Spatial Economic Issues Issues 3.
Developing the Greater Manchester conurbation and its hinterland
Evidence Base •
•
•
•
4.
Developing the Merseyside conurbation
•
•
•
Some Possible Responses
Manchester has been strong focuses for recent growth and has the potential critical mass to attract new knowledge sector employment. Their capacity to grow will depend on the ability to expand the effective workforces and the role of public transport in facilitating the growth in labour pools. The area houses key knowledge economy assets such as the uster, Manchester airport, the region’s main concentration of creative/media and business services firms. Growth in the city region has not been even and parts (e.g. north Greater Manchester) have performed poorly, whereas south Greater Manchester has grown strongly. In spite of strong employment growth there are large pools of workless. Particularly in the inner urban areas which have been relatively untouched by the economic growth.
•
Liverpool and Merseyside more generally have seen a remarkable turn-around in economic fortunes, with strong employment growth. This has been translated into significant reductions in numbers unemployed and on other benefits. However, there are still enormous economic challenges in the sub-region, not least the large proportion of the working age population who are workless, the major concentration of people lacking any qualifications and the relatively low rates of productivity of those in employment. The public sector remains a particularly large part of the economy in both GVA and employment terms and has accounted for over half the net growth in employment since 1999.
•
•
•
•
•
Ref: A/00163 Page 28
The recent evidence suggests that the conurbation have reached a critical mass where their scale and success means they are starting to act as magnets for key new businesses and migrants. To capitalise on this success and to develop as a potential counterweight to London in the UK economy it will be important that the area can genuinely act as city region drawing on a large and wide labour pool. In this regard better public transport connection into the city centre and other key growth nodes will be important to counter likely growth in congestion and to spread the benefits of city region growth (as happened in the wider South East). Rail connections to areas to the north of Manchester may need to be a priority for investment as are internal light rail linkages Further development will require continued investment in land and premises, a mix of labour market and transport interventions to ensure the workforce can expand and expansion of the housing offer for better quality housing to attract more mobile workers
There are main opportunities to build upon and action which is already in train, such as exploiting the undoubted opportunities from Liverpool Capital of Culture 2008, the continued expansion of Liverpool John Lennon Airport, the National Bio-manufacturing centre at Speke, the investment underway in the Strategic Investment Areas to improve the land and property product. A key challenge relates to the overall productivity levels and mix of employment creation, with the public sector and back of office, call-centre operations predominating. There is a need to re-balance the source of new economic growth in the sub-region. The challenge of low skills (in spite of large investment in training) and worklessness are the largest in the region. Here there are opportunities both to improve access (in all labour market senses) to job creation at key nodes inside Merseyside and also to better link labour markets to development in surrounding areas (Chester/North Wales, Warrington and north Cheshire)
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 6: Key Spatial Economic Issues Issues 5.
Vulnerability of parts of Lancashire
Evidence Base •
Some Possible Responses
Overall Lancashire has performed below average in terms of GVA growth terms (below the regional and national average). East Lancashire and Blackpool are in their different ways both relatively isolated and searching for future economic roles.
•
•
•
6.
Concentration of knowledge assets
•
•
•
7.
8.
Dependency of parts of the region on particular sectors
•
Importance of “cross-border” economic linkages and opportunities
•
•
•
The region’s key knowledge assets are concentration in a key institutions (HEIs) and firms in a relatively small number of locations. The most successful research departments and research funding is concentrated in Manchester, then Liverpool and to a lesser extent Lancaster Business R&D activity is also highly concentrated in a few location (e.g. Alderley Park, Warrington/Risley)
•
•
The part of Lancashire around Preston has performed strongly recently in job creation terms, reflecting its good location, connections, business base and HEI presence. Here the RES challenge is to facilitate the growth potential. Blackpool has set out a clear vision for its future which would go a long way to turning its economy around, which is highly dependent on the successful development of resort casinos. However, the future roles for large parts of East Lancashire are less clear. The sub-region overall and the East Lancashire part of the sub-region are particularly dependent on the manufacturing sector, which is forecast to see considerable employment shedding. As with Cumbria, this is a part of the region which needs a very specific policy response. The location of these assets cannot be ignored in the RES (and indeed RSS) and if the region is to maximise the advantage from these, it will be important to facilitate their expansion and the spin-off potential. This suggest the need to continue the policy of exploiting these assets (e.g. at Daresbury and in Manchester and the new Liverpool Science Park) where they exist and accepting and indeed encouraging growth in these locations.
The region’s key sectors are not uniformly spread around, but concentrated. Chemicals in Cheshire and Warrington, aerospace in Lancashire, nuclear in Cheshire and Warrington/Cumbria, tourism in Blackpool, Chester and Cumbria
•
Need to focus on diversification strategies for sub-regional areas/local areas which are most highly dependent on particular sectors, or alter the nature of dependency to those parts of a sector with greatest growth prospects
There are three particularly strong linkages and interdependencies: Chester/Ellesmere Port/Wirral and North Wales; North Staffordshire and South East Cheshire; Greater Manchester and West Yorkshire/South Yorkshire/High Peak (3.35). Often these cross border linkages are as strong as those within the region. The North Wales/Cheshire/Wirral links are particularly strong
•
There is a need for agencies to be more outward looking and recognise the value in these interdependencies, many of which are with parts of region to the south/west as well as east/north. There are opportunities to enhance growth in parts of the region by easing these links through local transport and training actions.
•
Ref: A/00163 Page 29
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 6: Key Spatial Economic Issues Issues 9.
Concentrations of worklessness and low skills
Evidence Base •
•
Some Possible Responses
As identified in Matrix 2 there are very pronounced local concentrations of worklessness and, largely in the same areas, low skills levels Some of these areas (e.g. Manchester, Salford, Halton, Knowsley and Liverpool) are relatively well located in relation to areas of substantial jobs growth. However, others (Barrow and Blackpool) are less well located
•
Ref: A/00163 Page 30
There is clearly a need for spatial focus for policies and programmes to tackle worklessness and to help try and match new job opportunities with those neighbourhoods with the continuing concentrations of worklessness.
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses
Matrix 7: Key Longer Term External Driver Issues Issues 1.
2.
3.
Potential Impact
Continued liberalisation of trade and globalisation of production including traded services
• •
Growth in large Asian economies (especially China and India)
•
Full effects of the recent expansion of the EU and its possible further expansion
•
•
•
• •
4.
Continued development and application of new technologies changes
•
•
Some Possible Responses
Driver of overall world growth and export opportunities However, already a driving force for re-location of lower value added manufacturing activity to lower cost locations impacting on scale of lower value added manufacturing employment in the region. Likely to see trend applied to an increasing proportion of traded services (as is already happening with contact centres, shared services centres and call centres), puts as risk the highly mobile, cost sensitive back-ofoffice support services in financial and business services
•
Providing growing market opportunities for consumer goods, investment goods and, increasingly business services. Also becoming major competitors in manufactured goods and, for India, increasingly low/medium value traded services
•
Need to continue the existing efforts to develop trade and business links with these two economies and capitalise on the region’s existing links and opportunities (such as direct air services to the SubContinent)
Increasing cheaper production possibilities and continued move to “off shoring” of many lower value added manufacturing activities to cheaper cost locations. However, new and rapidly growing economies present market opportunities and Scope for increased immigration which could affect population growth and also the extent to which employment growth leads to reductions in worklessness
•
See above
Important changes include the growth in intelligent materials, the development of nanotechnology, the use of plastics and composites and further development in advanced manufacturing techniques impacting on our manufacturing sectors. In addition technology is radically impacting on the organisation of production and work in all sectors, especially the impact of mobile telephony and the internet – this can also lead to “offshoring” of service sector activity (e.g. in call centres)
•
This is where the region’s business base will need to invest to ensure firms remain competitive and can offer value added, knowledge based output Need to continue the many efforts to encourage knowledge transfer in the region (where there can be clear market failures) and perhaps better co-ordinate the current funding Major source of market opportunities (but also threats), important to help businesses be ware of the implications.
Ref: A/00163 Page 31
•
•
•
Some responses are defensive (to work with sectors to raise awareness of the competitive threats) Others could be more positive, facilitating firms who seek to “offshore” production and delivery of services to reduce costs and to concentrate more on the value added end of production
North West Economic Baseline: Final Full Report - Key Issues and Policy Responses Matrix 7: Key Longer Term External Driver Issues Issues 5.
UK Government policy in term of public sector spending and procurement
Potential Impact •
•
• • 6.
Future role of London in UK economy
•
• 7.
Changes in cost of energy and energy policy
•
• • 8.
Impact of environment legislation and regulations
•
•
Some Possible Responses
The scale and location of spending related to Defence procurement, Research, Sustainable Communities and Transport Infrastructure will influence the future economic performance of the region and scale of investment and construction activity. For transport spending this also applies to decisions on investment outside the region (especially in the West Midlands and Yorkshire and the Humber). The overall scale of the public sector in the region and its potential role in terms of purchasing and supply chains is very significant The region’s aerospace sector is particularly dependent on government procurement decisions.
•
The extent to which London remains the dominant UK location for advanced government functions, media, financial and business services has a major impact on the rest of the UK economy London is a global city and has been for centuries; it will continue to dominate many service sector function
•
Higher energy prices rising in response both to market pressures and global efforts to tackle greenhouse gas emissions could have a particularly strong adverse impact on some of the region’s sectors, such as chemicals. The UK is moving from a position of self-sufficiency to being a net importer. Increased costs of energy will also impact on transportation costs The region’s nuclear sector and expertise would be well placed if there was a strategic shift in the UK towards nuclear energy generation The impact of current and potential future EU Directives on re-cycling, emissions and other environmental matters provide potential cost for business but also business opportunities. Landfill Directive will really start to bite in the region which has a poor record in domestic waste re-cycling at present (0) and has a shortage of landfill sites
•
Note: a fuller description of external drivers is in 3.40.
Ref: A/00163 Page 32
• •
•
•
•
•
•
Continue work with and lobby central government to ensure the region’s investment needs are not overlooked. …the Northern Way provides a useful platform for this Aim to encourage the relocation of higher value government functions into the region (post Lyons Review) Practical actions to help SMEs link into public sector supply opportunities in the region and nationally. Increased cost pressures in London and quality of life issues both provide opportunities to attract people and activity to the region Excellent transport links (rail and air) will remain critical to exploiting many of these opportunities Limited scope to influence policy, possible scope to work with sectors in awareness raising about issue Business opportunities to tackle in renewable energy and energy efficiency fields
Limited scope to influence policy but need to make government aware of impact on business, need to work with wide range of partners to raise awareness. Opportunities to seize business opportunities from landfill, re-cycling and other environmental issues (including re-manufacturing and reprocessing waste)
North West Economic Baseline: Final Full Report - Regional Economic Performance
3.
Regional Economic Performance and Prospects Key Issues for the RES • The recent evidence points to a very positive overall economic performance for the region in absolute and relative terms in the last few years. This suggests that the regional economy may have started to turn the corner. • All sub-regions have performed well in terms of employment creation. However, Cumbria’s rate of GVA growth has been very low and that of Lancashire has been sluggish. One particular feature has been the turn-around in the economic performance of Merseyside and the continued strong performance of Greater Manchester overall and the south part of Greater Manchester in particular (encompassing Manchester City Centre). • The latest available data for 2003 shows that the North West’s GVA per capita was 12.2% below the England average, creating an output gap compared to the England average of £13.6bn. All sub-regions bar Cheshire and Warrington contribute to this gap, with the largest gap in Merseyside. Overall, around a quarter of the gap stems from a lower proportion of our population in work; three quarters is due to the below average rates of productivity of those in work. • The low rates of productivity are particularly pronounced in the service sector, especially the business services sector; however the productivity performance is much stronger in manufacturing especially chemicals, pharmaceuticals, aerospace and nuclear (and the first two of these account for a large share of the region’s exports). • Under the rather pessimistic longer term trends scenario for the region its growth prospects look poor. The challenge is to build on recent success: to continue recent rates of employment growth; and further to transform the productivity of parts of its services. If these were too occur, the region would have the very real potential to start to close the output gap and catch up the rest of the UK.
How has the Region Progressed in Recent Years? 3.1
During the 1980s and most of the 1990s, the North West was one of the worst performing regions of the UK. Its overall record in job creation, wealth creation (Gross Value Added) and in terms of population change was poor, driven by large scale industrial re-structuring in its main towns and cities. Due to this history, it faces considerable linked issues of social inclusion – with some of the largest concentrations of relative and absolute deprivation in England. Whilst the environmental legacy left by industrial and demographic transition continues to raise challenges for the region in terms of the age and quality of the region’s housing and building stock.
3.2
During much of the 1990s, relative to England and the UK, GVA per capita remained broadly constant in proportion terms. However, as population has been falling in the North West and growing faster in other regions, the region’s share of total England GVA has fallen6. There have been fluctuations over this period as shown by Figure 3-1. The key points are that the region’s economic performance has followed a cyclical pattern:
6
From 12.8% in 1991 to 12.0% in 2003
Ref: A/00163 Page 33
North West Economic Baseline: Final Full Report - Regional Economic Performance • First, during the early to mid 1990s the region saw its GVA per capita stay fairly constant compared to the England average (at around 10% lower) • Second, when the UK economy started growing more strongly from the mid 1990s onwards this led to a growth in the GVA gap as a result of particularly strong economic growth in the greater South East area. This led to the GVA gap growing to an historic high of nearly 14% in 2000. • Third, there has been a very noticeable improvement in relative regional GVA per capita since 2000, although the improvement is still to a position which is worse than the early 1990s. 3.3
These changes in recent relative economic performance of the region must be seen against a period of almost unprecedented and sustained economic growth across the UK. The fluctuations in relative economic performance within the UK have been within the context of a steadily growing economy (something that was not true for instance in the early 1990s). Figure 3-1: Trends in Relative GVA per Capita, 1989 to 2003 GVA per Capita at Current Basic Prices, % points difference from England=100 0 1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
-2
-4
-6
-8
-10
-12
-14
-16
Source: ONS Note: GVA figures are GVA at current basic prices not ONS headline GVA estimates
Ref: A/00163 Page 34
1999
2000
2001
2002
2003
North West Economic Baseline: Final Full Report - Regional Economic Performance
Recent Economic Growth May Mark a Turning Point in Regional Economic Fortunes… 3.4
There has clearly been a substantial improvement since 2000 and undoubtedly, the three/four years since 1999 and 2000 have been ones of relatively strong regional economic performance. The region has seen a substantial increase in number of businesses, employment, and hence an increase in employment rate7, GVA has increased strongly (the GVA gap improved by 2% point between 2000 and 2003) and population has started rising after many years of stagnation or decline.
3.5
The improvement in relative GVA performance since 2000 is significant. However, this change has been shared by many other regions. Indeed the North West’s GVA per capita growth was exceeded over this period by Yorkshire and the Humber and the South West8 and many other regions outside London (which performed particularly badly) grew at a similar rate to the North West (see Table A3.1 in Appendix A).
3.6
What are the factors that lie behind these recent changes and what are the implications? • First, the recent period has been one of continued growth in the UK economy, yet one of relative slow growth in London (and to a lesser extent rest of the South East) on the back of the end of dot com bubble and slow down in the financial services sector in the City of London. The region has always had strong relative growth in these circumstances. This relative growth rate has been similar to that of the other northern regions. • Second, the region’s economic structure is becoming more “average”, so that the adverse effect of our structure (in terms of a concentration of manufacturing sectors in Figure 3-2: Overall Economic Change, 2000-2003 decline) on economic growth North West England is less strong than in the No. % Rank* % past. In 1989, Employees (000s) + 145 +5.1% 4th +1.8% manufacturing accounted for GVA (£bns) + £15.0 +18.1% 4th +16.4% 32% of the North West’s Basic current prices GVA or 8% points above the Basic GVA per capita - +17.6% 3rd +15.0% England average; by 2000 (£000) this had fallen to 23% and GVA per employee - +12.4% 8th +14.4% 5% points above the (£000) No. of Firms + 7,214 +4.5% 4th +2.6% England average. • Third, a significant portion of recent employment and associated GVA growth has been in public services. This type of employment tends to be
7
Working Age Population (000s) Total Population (000s)
+ 64
+1.5%
8th
+2.1%
+0.4% 8th +30 Source: ONS and Regeneris Consulting calculations Note: *Rank out of 9 English regions. More detailed information in Table A3.7 in Appendix A
+1.3%
An increase of 1.9 percentage points 1999/2000 to 2003/4 (or a 2.7% increase) in the region compared to just a 0.2% point change in England, the best improvement of any English region along with the North East
8
North West growth in nominal GVA per capita 2000-2003 of 17.6% (England average of 15.0%) was exceeded by the South West (17.8%) and Yorkshire and the Humber (19.2%). Growth in London was just 9.0%.
Ref: A/00163 Page 35
North West Economic Baseline: Final Full Report - Regional Economic Performance distributed around the country pro rata to population. Indeed, roughly half of net employment growth in the region since 1999 has been in the public sector. • Finally, the ripple effect of the housing market and associated consumer boom which started in the south east of England has spread northwards since 2001. 3.7
The recent growth in population experienced in the region is significant. In 2000 and 2001 population stabilised and in 2003 there was a small net inflow of migration into the region, in contrast to the population outflows of the previous decade. The early part of the new millennium may mark a turning point with overall population decline halted and modest growth to come.
3.8
The strong relative growth in regional economic performance in the region in a UK context has also led to strong growth compared to other EU comparator regions9. This partly because of the UK’s relative strong economic performance and partly because of the North West’s strong growth within a UK context (see Figure 3-3). Although the region has made strong progress, its GDP per capita in 2002 was still well behind that of several of the comparator regions: GDP per capita was 37% higher in Lombardia, 30% higher in Nord Ovest and 22% higher in Bayern (although it should be noted that these are some of the most successful regional economies in Europe). Figure 3-3: Change in GDP per Capita, 1999 to 2002 EU Comparator Regions
12%
10%
10%
10%
Nord Ovest
Bayern
Lombardia
16%
Este
16%
Vlaams Gewest
19%
North West
20%
Yorkshire and The
25% 20% 15% 10% 5% 0%
CentreEst
Change in GDP per capita (Purchasing Power Parity), 1999-2002
Source: Eurostat Note: purchasing power parity takes account of currency fluctuations between countries. Data not available for 2003. GDP is a very similar measure to GVA.
9
These are the NUTS 1 regions of Bayern (Germany, including Munich), Centre-Est (France, including Lyon), Este (Spain the Catalonia region including Barcelona), Lombardia (Italy, including Milan), Nord Ovest (Italy, including Turin), and Vlaams Gewest (Belgium, the north part of Belgium including Antwerp) as well as Yorkshire and the Humber. They were selected as having some similar economic characteristics to the North West in terms of scale, structure and not being locations of capital cities.
Ref: A/00163 Page 36
North West Economic Baseline: Final Full Report - Regional Economic Performance
3.9
One feature of recent growth has been that employment has risen rapidly relative to growth in GVA so that average GVA per employee has fallen in relative terms. This is consistent with a relatively large number of people entering the labour market for relatively low paid, lower value added jobs10. Around two third of jobs created since 1999 have been part-time, around half have been in the public sector and there may be an issue over the long term permanence of some of this growth. In 2000, much more of the overall GVA gap was accounted for by low employment rates than it was by 2003, but less by low productivity rates. A more detailed analysis of activity rates is contained in Section 5.
3.10
This phenomenon of GVA growth being driven more by employment growth than productivity growth is not just a North West phenomenon and is similar to most other regions outside London. It has also been true for the UK economy as a whole where the improvement in relative GVA per head of population has resulted more from growth in employment than an improvement in labour productivity compared to other major economies. “It also seems to be the case that productivity and employment are not acting independently of one
another. Analysis suggests that this strong labour market performance may actually have held back UK productivity growth. As the economy has generated more jobs, it has brought marginal workers into employment. These workers tend to be less experienced – if not less qualified – and therefore less productive than the average. This ‘batting average effect’ has the effect of lowering average measured productivity”. DTI Economic Paper 6, 2003, page 11.
How have the Sub-Regions Fared? 3.11
10
A noticeable feature of regional economic performance has been, in common with most other regions, striking divergences in the paths of economic performance by area. Since 1995 (the last point in consistent GVA series) sub-regional economic performance has varied widely. Cumbria has seen its GVA stagnate and has indeed been the worse performing sub-region in England. Cheshire and Warrington, Merseyside and Greater Manchester have performed at or close to the England average whilst Lancashire’s growth rate of GVA has lagged the regional average. The relative rate of growth in Greater Manchester has slowed down since 1999.
See Appendix B for more details on jobs created
Ref: A/00163 Page 37
North West Economic Baseline: Final Full Report - Regional Economic Performance
Figure 3-4: GVA Growth by Sub-Region, 1995-2002
Change in GVA per capita, 1995 to 2002 30% 25%
percentage
20% 15% 10% 5% 0%
1995-1999 1
Cheshire Greater Manchester
1999-2002 2
Lancashire Merseyside
Cumbria England
Source: ONS, NUTS 2 data, basic GVA workforce based. Note: Cheshire includes Halton and Warrington
3.12
A similar shift in fortunes is shown in considering changes in employment. Figure 3-5 shows the absolute change in employment by sub-region over the last 12 years. This chart really emphasises the major turn around in fortunes of the two main conurbations in the region.
Ref: A/00163 Page 38
North West Economic Baseline: Final Full Report - Regional Economic Performance
Figure 3-5: Change in Employees in Employment, 1991-2003
Change in Employees in Employment, Sub-Regions, Total Jobs Change 1991-2003 120,000
1991-97
100,000
1998-03
80,000 60,000 40,000 20,000 0 Cumbria -20,000
Cheshire & Warrington
Greater Manchester
Greater Merseyside
Lancashire
-40,000
Change in Employees in Employment, NUT S 3 Areas in North West, T otal Jobs Change 1991-2003 80,000 70,000
1991-1997
60,000
1998-2003
50,000 40,000 30,000 20,000
Wirral
Sefton
Liverpool
East Merseyside
Halton and Warrington
Cheshire CC
Lancashire CC
Greater Manchester South
Greater Manchester North
-30,000
Blackpool
-20,000
East Cum bria
-10,000
West Cum bria
0
Blackburn with Darwen
10,000
Source: ONS; Annual Employment Survey, 1991 to 1997 and Annual Business Inquiry, 1998-2003 (Note: the two data series are not completely compatible)
Ref: A/00163 Page 39
North West Economic Baseline: Final Full Report - Regional Economic Performance
3.13
The more recent key trends at a sub-regional level have been: • First, the remarkable turn-around in the performance of Greater Merseyside which has become one of the fastest growing parts of the North West (and indeed England) after decades of stagnation. Liverpool has been one of the fastest growing cities in England in GVA terms. However, population has continued to decline although at a much slower rate than historically and with signs that the decline may have stabilised and in parts started growing. • Second, the continued poor economic performance of Cumbria in GVA terms. However, its performance in job creation terms has been much stronger. It has been hard hit by contractions in its large manufacturing sectors (shipbuilding and nuclear) and in agriculture. It also suffered especially heavily in 2001/2 from the impact of Foot and Mouth. • Third, continued growth in Cheshire and Warrington, but at a slower rate than in the recent past and no longer substantially faster than the rest of the region. • Fourth, one of the most noticeable features of the past four years has been the strong performance of Greater Manchester (including Manchester city centre) in employment terms. This growth has been largely focused in the south part of Greater Manchester. This subregion has been the main source of net employment growth in private sector service activity (business services and transport & communications see Table A3.10 in Appendix A)
Figure 3-6: Recent Sub-Regional Economic Performance 2000 to 2003 Area
Total Population
1999 to 2002
Employees
Employment Rate*
1.0%
6.0%
1.1%
Cumbria
0.5%
6.5%
5.3%
5.5%
Greater Manchester
0.6%
4.2%
1.1%
12.7%
Greater Merseyside
-0.7%
7.3%
46.2%
19.0%
Cheshire Warrington
&
Lancashire
GVA**
19.6%
1.1%
4.2%
2.5%
14.7%
North West Total
0.4%
5.2%
2.7%
14.9%
England
1.3%
1.8%
0.3%
16.0%
Source: ONS Note: * based on local Labour Force Survey where there are margins of error (=/-2% to 3%) at a sub-regional level. Shows the % change in the employment rate of working age people between 1999/00 to 2003/4 **GVA data is for a slightly time different period and is basic GVA at current prices. GVA for Cheshire includes Halton and Warrington
• Fifth, Lancashire has seen steady economic growth; however employment growth has been faster than GVA growth indicating a reduction in productivity (output per worker). 3.14
The sub-regional figures mask very significant more localised variations. For instance the southern part of Greater Manchester (including Manchester, Salford, Trafford and Stockport) has been the area with the fastest rate of GVA growth in the region since 1995 (total nominal GVA growth of 55% compared to the regional average of 38%), whereas the northern part of Greater Manchester has performed very poorly (23% nominal GVA growth over this period which compares to 12% in Cumbria) (see Table A3.2 and A3.3 in Appendix A).
Ref: A/00163 Page 40
North West Economic Baseline: Final Full Report - Regional Economic Performance 3.15
In considering these changes it is important to bear in mind the relative importance of different parts of the region in terms of economic output. Greater Manchester accounts for nearly two fifths of total economic output of the region, Cheshire, Lancashire and Merseyside are all similar sized economies with just under a fifth of total GVA each and Cumbria is much smaller at 6% of regional output.
Figure 3-7: Sub-Regional Shares of GVA, 2002
Shares of Regional GVA, 2002
45%
39.5% (£36.5bn)
40% 35% 30% 25%
19.6% (£18.1bn)
18.4% (£17.0bn)
20%
16.5% (£15.3bn)
15% 10%
6.0% (£5.5bn)
5% 0% Cumbria
Cheshire
Greater Manchester
Merseyside
Lancashire
Source: ONS, NUTS 2 data, basic GVA workforce based. Note: Cheshire includes Halton
What is the Current Position of the Region? 3.16
Much focus of the Regional Economic Strategy and the Government’s interest in regional economic performance, and indeed the Northern Way is couched in terms of GVA per capita and “GVA gaps”. A GVA (or output) gap is simply a measure of the additional GVA a region would need to generate to move up to the relevant benchmark figure (it assumes that there is no change in that figure). At present, in spite of the strong growth in the last few years the region has a substantial GVA gap.
3.17
The most recent official data, just released, indicates that for 2003 the region generated an estimated £98 billion of Gross Value Added or £14,300 for every resident of the region. This figure was 10.2% below the UK and 12.2% below the England per capita averages, equating to a GVA gap compared to England of around £1,950 per head of population. In 2003 the total GVA gap compared to the England average was £13.6bn.
3.18
In absolute terms this region has the largest GVA gap of any region in England and in relative terms the region is the second worst performing region in England (see Figure 3-8). Although it’s relative performance is very similar to Yorkshire and the Humber and the Midlands regions.
Ref: A/00163 Page 41
North West Economic Baseline: Final Full Report - Regional Economic Performance
Figure 3-8: Per Capita GVA Region, 2003 160%
GVA per capita 2003, England =100%
140%
143%
120% 108%
100% 88%
80%
88%
89%
89%
92%
93%
78%
60% 40% 20%
Lo nd on
Ea st So ut h
N or th
Ea st
Yo N or rk th sh ire W es & t th e Hu m be r W es t M id la nd s Ea st M id la nd s So ut h W es Ea t st of En gl an d
0%
Source: ONS © Crown Copyright Note: GVA at current basic prices and workplace based (which tends to overstate GVA per capita in London and understate in the South East and East of England due to commuting flows)
There are several key factors explaining the Output Gap 3.19
Fundamentally, there are two main factors which explain this GVA gap: the number of people in work and the productivity of those in work - for the region as a whole approximately three quarters of the gap is due to productivity factors (£10.5bn) and a quarter due to employment factors (£3.1bn)11. There are several factors (both positive and negative) affecting relative productivity in the region: • First, a relatively small contributory factor may be the slightly fewer hours worked per person employed). This gap could also caused in part by the relative importance of parttime working in the region or the hours worked by part time workers. ONS data suggests that GVA per hour worked in the region may, in the case of the North West, be 6.6% below the England average compared to a difference of 7.0% to 7.3% for all people in employment. These comparisons suggest that some part of the lower GVA per person employed may be caused by lower hours worked. However, the data is from different sources and the estimates of total hours worked need to be treated cautiously, the more recent ONS data for 2003 suggests the issue is less significant than we previously thought. Understanding this issue better will require further analysis in the future.
11
Largely due to a lower employment rate (accounting for 2.4% points of the overall 12.2% points gap compared to England, but also due to our slightly lower ratio of working age to total population (0.7% points of the gap). The remainder (9.1% points) is accounted for by lower productivity of those in work
Ref: A/00163 Page 42
North West Economic Baseline: Final Full Report - Regional Economic Performance • Second, we have relatively more employment in manufacturing which tends to have high GVA per employee, so the overall effect of our industrial structure is to increase GVA per employee (by around 2.4%) compared to the England average. However, as manufacturing is becoming increasingly less prominent and our industrial structure converges with the national picture, this factor is becoming much less important. • Third, our productivity within sectors tends to drive down overall productivity. In sectors operating in national or global markets (especially manufacturing), regional productivity is similar to the national average and much of the difference in productivity is due to the capital intensity of production, and the region’s manufacturing base is relatively capital intensive12. The region has slightly above average productivity in education (due to the large HE presence), agriculture, and energy/water. However, these only contribute in a small way to closing the productivity gap. • The single biggest contributors to the productivity gap is the below average productivity per employee in most service sectors (see Figure 3-9 and Figure 3-10), which is largely explained by the type of service activity undertaken. The region has below average output per employee in transport & communications (84% of England average in 2002), financial services (77%), business services (80%) and public administration (77%). • Depending on how they are measured, the overall GVA per employee for all service sector activity is between 83% and 88% of the England average. Business services13 accounts for 35% to 40% of the total gap (an estimate of over £4bn). However, if we compare the region to England less London and the South East (see the second chart in Figure 3-10) the scale of the gap falls • It is important to note in this analysis that the distinctions between manufacturing and services are increasingly blurred with many activities directly related to the manufacturing process now undertaken in the service sector and other service sector type activity (e.g. provision of finance) delivered by manufacturing firms.
12
Indeed, given the sectoral composition of the region’s manufacturing sector, with a relatively large proportion of employment in those capital intensive sectors with high GVA per worker the overall manufacturing labour productivity in the region might be expected to be higher. If GVA per employee were the same as the England average in all manufacturing sub-sectors then the overall average based on data from 2001 would be around 5.8% above the England all-sector average, in actual fact overall manufacturing GVA per employee was 1.3% above the England average (Source: Annual Business Inquiry, ONS)
13
Business services covers a wide range of activities from legal and accountancy, through IT/software, advertising and PR, to recruitment and technical services. It excludes financial services and broadcast creative and media
Ref: A/00163 Page 43
North West Economic Baseline: Final Full Report - Regional Economic Performance
Figure 3-9: Relative Sectoral Labour Productivity, 2002
173%
92%
82%
Other services
Health and Social Work
77%
Education
80%
Public Administration and Defence
104% 77%
Business Services
84%
Financial Services
88%
Transport and Communications
93%
Hotels and Restaurants
Construction
81%
Wholesale and Retail Trade
101%
Energy and Water Supply
122%
Manufacturing
200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0%
Agriculture
percentage
GVA per Employee by Sector, 2002 England = 100
Source: ONS and Regeneris Consulting calculations Note: sector productivity measured by combination of GVA and employee data (from the Annual Business Inquiry)
Figure 3-10: Sectoral Contributions to North West Productivity Gap, 2002 (Note: a positive value indicates an output gap or a below average productivity) Contribution to GVA Output Gap Compare d to England by Se ctor, 2002 ÂŁms 5000 4000
ÂŁms
3000 2000 1000 0
Ref: A/00163 Page 44
Health and Social Work
Education
Public Administration and Defence
Business Services
Financial Services
Transport and Communications
Hotels and Restaurants
Wholesale and Retail Trade
Construction
Energy and Water Supply
Manufacturing
-2000
Agriculture
-1000
North West Economic Baseline: Final Full Report - Regional Economic Performance
5000
Contribution to GVA Output Gap Compare d to England le ss London and South East, by Se ctor, 2002 £ms
4000
£ms
3000 2000 1000 0
Health and Social Work
Education
Public Administration and Defence
Business Services
Financial Services
Transport and Communications
Hotels and Restaurants
Wholesale and Retail Trade
Construction
Energy and Water Supply
Manufacturing
-2000
Agriculture
-1000
Source: ONS and Regeneris Consulting calculations Note: scale of sector contribution indicative only as based on a combination of GVA and employee data
3.20
Why is there such a large productivity gap in the service sector? Within the service sector differences in output per worker is largely due to the skill content of jobs. The main differences are almost certainly down to the composition of activities (for example, the type of accountancy and law practiced and the average earnings levels compared to the national average). This is demonstrated in part by the large differences in average (mean) full time earnings: in business services these are just 85% of the UK average; and in financial services 62%15. The “earnings gaps” for these two sectors were, respectively, £1.4bn and £1.8bn in 2004. Part of the reasons is also likely to be the extent to which the clients of business services firms are “demanding”, those firms largely servicing local markets in the region are unlikely to require the same level of specialisation and skill as those serving national or international markets.
3.21
The relative size of these gaps compared to GVA raising interesting issues and will need to be the subject of future research. However, the extent to which on a like for like basis North
West service sector firms operating in the same markets as elsewhere are less productive is not entirely clear. There is an information gap on the reasons for poor productivity performance in the traded services sector. 3.22
The output gap is not uniformly distributed across the region. Figure 3-11 shows how it is broadly shared in different parts of the region16. The key points are: • A large part of the current output gap is located in Merseyside, due to its low GVA per capita. In Merseyside, the low employment rate remains an important cause of the output gap of around £6bn, but the productivity of those in work still accounts for over three quarters of the productivity gap. • In both Cumbria and Lancashire the output gap (£2bn and £4bn respectively) is caused almost entirely by low productivity of those in work, as employment rates are at or above the England average.
15 16
Overall, average full-time earnings for all sectors were 91% of the UK average in 2004. A similar exercise has been carried out for the region’s NUTS 3 areas, but this needs to be treated with caution – see Table A3.18 in Appendix A. Commuting flows between sub-regions mean that the estiamtes need to be treated cautiously
Ref: A/00163 Page 45
North West Economic Baseline: Final Full Report - Regional Economic Performance • In Greater Manchester the output gap (around £3bn overall) is small relative to the size of the economy and is caused 1/3rd by employment factors and 2/3rds by productivity factors. • Finally, Cheshire and Warrington stands out as the only sub-region that acts to reduce the regional output gap, both because of a higher employment rate and because of higher productivity of those in work. Figure 3-11: Shares of Output Gap by Sub-Region, 2002 £16,000
Productivity
£14,000
Employment
£12,000 £10,000
GVA £ms
£8,000 £6,000 £4,000 £2,000 £0 -£2,000
Cumbria
Cheshire & Warrington
Greater Manchester
Merseyside
Lancashire
North West
-£4,000
Source: ONS and Regeneris Consulting Calculations Note: the employment gap is calculated based on residents in work, the productivity gap is calculated based on productivity of employees in employment (unadjusted GVA workplace based divided by employees in employment) Cheshire and Warrington includes Halton and Merseyside excludes Halton in this analysis.
3.23
There is more detailed information on sectoral productivity gaps at a sub-regional level for 2002 (see Table A3.4 in Appendix A). This information, which needs to be treated with caution, shows that there is a contrast between manufacturing productivity levels (output per employee) in Cheshire and Warrington which are estimated to be 50% above the England average (due to the presence of the chemicals and pharmaceuticals sectors), whereas elsewhere they range from 5% below (Lancashire) to 23% below (Merseyside). The striking regional business services gap is present to some extent in all sub-regions. In absolute terms it is concentrated in Greater Manchester due to the large share of regional employment in the sector and the fact that overall productivity rates appear to be no better than the regional average. Overall average productivity per employee compared to England ranges from 5% over Cheshire and Warrington, to 10% and 12% below (Greater Manchester and Lancashire respectively) to Cumbria and Merseyside where they are running at around 20% below the England average.
Ref: A/00163 Page 46
North West Economic Baseline: Final Full Report - Regional Economic Performance The Role of the Five Drivers of Productivity 3.24
The DTI and Treasury have developed a framework for assessing regional economic performance; it focuses on the contribution of five key drivers: skills, innovation, enterprise, investment and competition. It is not possible to quantify precisely the contribution of these factors to the GVA gap (and in any case the impact is likely to be interrelated). However, we have provided a stylised assessment in Figure 3-12. Figure 3-12: Contribution of The 5 Drivers of Productivity to North West Economic Performance
Driver
Skills
Innovation
Investment
Enterprise
Competition
Current Contribution
NEGATIVE. The region has a significant deficit in higher level skills (around 80,000 fewer people with graduate level skills compared to rates for England) and surplus in residents with no or poor skills (at least as proxied by qualifications held, where there are 120,000 more people than if we had the England average proportion) MIXED. Strong overall levels of business R&D (just below England average) but average overall R&D per capita 15% below England average; innovation not widely diffused in firms MIXED TO NEGATIVE. Overall business capital investment per head of population is 19% below the England average, but manufacturing investment is at the national average. The lower overall levels of investment are in part a result of a static population and so less demographic related capital investment NEGATIVE. Low business birth rate, low overall stock and low survival rates, some evidence of less entrepreneurial attitudes.
Recent Changes
POSITIVE. Some evidence of catching up in numbers of population with NVQ Level 4 or better qualifications (degree level), although the rate of fall in those with no qualification is behind the national average
NEUTRAL. No signs of significant change
NEUTRAL/NEGATIVE. No sign of significant change. However, housing and other private investment tends to be driven by population growth which is low in the region and much higher in the South East.
WEAK POSITIVE. Evidence of recent improvements in business birth rates and survival rates, but nevertheless gap remains significant. DIFFICULT TO JUDGE. As second largest economy in the UK, the region will have reasonably strong local competition. But nature of markets for some high value sectors in the region means that firms concentrate on lower end of the value range. Competitive pressures strongest on manufacturing rather than service sector. The region’s economy is as dependent on exports as the average but generates fewer exports per head of population or per £1 of GVA than the North East, East Midlands and the South East
Source: Regeneris Consulting
3.25
The conclusion is that the current performance of the region on all drivers varies from mixed to negative performance (in a relative UK context), but importantly there are some signs of improvement in relation to skill and enterprise.
3.26
The relative position of the sub-regions in relation to those aspects of the 5 drivers that can be measured sub-regionally (essentially skills and enterprise) is summarised in Figure 3-13. The differences are stark; not least the concentration of the skills gaps (both in terms of large numbers with no skills or small proportion with graduate level skills) in greater Merseyside and the reverse situation in Cheshire and Warrington. The data also illustrates that the enterprise gap is concentrated in Greater Merseyside and to a lesser degree Greater Manchester.
Ref: A/00163 Page 47
North West Economic Baseline: Final Full Report - Regional Economic Performance
Figure 3-13 : Contribution of Enterprise and Skills Drivers of Productivity to Sub-regional Economic Performance
Sub-Region
Skills Gap* - Working Age Population No Qualifications (2003/4) compared to England average % points
000s
Enterprise**
NVQ Level 4 or equivalent or better (2003/4) compared to England average
Business startups per 10,000 working age pop. (2003)
Enterprise Gap, Business Stock per 10,000 working age population (2003)
% points
England = 100
England = 100
000s
000s
Cumbria
-2.0
-11
-1.9
-5
82
115
-2
Cheshire & Warrington
-1.2
-3
5.3
28
97
103
-1
Greater Manchester
3.8
58
-2.2
-34
90
80
16
Greater Merseyside
8.0
71
-5.7
-51
62
56
20
Lancashire
0.4
3
-1.9
-16
84
87
5
Whole Region
2.9
119
-1.9
-78
83
82
38
Sources: local Labour Force Survey 2003/4; Small Business Service Notes: * figures for England were 25.0% for NVQ4+ and 14.8% for no qualifications ** figures for England in 2003 were 51 registrations and 468 stock of VAT registered business per 10,000 adults of working age
How does the North West earn its Living? 3.28
What are the main sources of employment and wealth generation in the region? Figure 3-14 and Figure 3-15 show at a broad level the main sources of GVA and employment in the region. The three headline features of the region’s economic structure are: • First, the continued relative importance of our manufacturing base in terms of wealth creation (21% compared to 16% in England). The sector is particularly important in wealth creation rather than employment terms as it contributes just 14.5% of all employees in employment. • Second, the lesser important of business and financial services (25% of GVA compared to 33% in England). However, in 2002 the output generated by the business services sector was almost identical to that of manufacturing as a whole. Over the period 1989 to 2002 regional manufacturing GVA grew by just 22% (in nominal terms or a real reduction in output) compared to 184% growth in the business services sector. •
3.29
Third, the slightly above average shares of public sector.
A key point is the overall differences between our regional economic structure and that nationally have been closing over time.
Ref: A/00163 Page 48
El Pr ec M im tri ar cit anu y y, fa c G as tur an ing d W at Co W er ho ns l t es ru Ho al ct te e i ls an on an d R d et Re Tr ai an st l a sp ur or an ta ts nd Fi na Co nc m ia s. l Bu Se sin rv ice es s s Se rv ice Pu bl s ic Ad He m al in th E . an du ca d So tio n ci al W O th or er k se rv ic es
percentage of total employment Pr M im ci an ar ty u y fa , G ct as ur an ing d W at er C W ho on st le sa ru Ho ct le te i an on ls d an Re d ta R Tr es il an ta ur sp an or ts t an d Fi Co na m nc s. ia lS B er us vi in ce es s s Se rv ic Pu es bl ic A H dm ea in lth . Ed an uc d a So tio ci n al W O or th k er se rv ic es
El ec tr i
percentage of total GVA
North West Economic Baseline: Final Full Report - Regional Economic Performance
Figure 3-14: Shares of GVA by Sector, 2002
25%
Shares of GVA, 2002
20%
North West
England
15%
10%
5%
0%
Source: ONS Š Crown Copyright Note: GVA at current basic prices
Figure 3-15: Shares of Employees in Employment by Sector, 2002
25%
Shares of Employment, 2002
20%
North West
England
15%
10%
5%
0%
Source: ONS Š Crown Copyright Note: GVA at current basic prices
Ref: A/00163
Page 49
North West Economic Baseline: Final Full Report - Regional Economic Performance
3.30
There are significant variations in the nature of economic activity across the sub-regions even at a broad sector level (see Figure 3-16 and Figure 3-17). The main features are: • Cumbria: is the most dependent sub-region on manufacturing and retail/hotels/catering. This reflects the “bi-polar” nature of the economy with large scale manufacturing on the West Coast and Furness Peninsula coupled with a more traditional tourism (and agriculture) based rural economy in much of the county. The area has a particularly low proportion of financial and businesses services GVA reflecting its relative isolated and rural nature. • Cheshire and Warrington: has the most relatively important financial and business services sector reflecting the strength of financial services in locations such as Chester and the concentration of business services activity in Warrington and along the M56 corridor and close to Manchester Airport. Manufacturing is also an important component of GVA reflecting in particular the presence of the highly capital intensive chemical sector and the pharmaceutical sector in the sub-region. • Greater Manchester: as the largest sub-region its overall structure is more average, although financial and business services stand out as particularly important (reflecting the role of Manchester city centre and the South Greater Manchester area along the M60 and down to the Airport. • Lancashire: this sub-region has the second largest concentration of manufacturing and particularly low share of financial and business services. • Greater Merseyside: the most significant features are the importance of the public sector in GVA, the low importance of manufacturing and the significance of financial and business services overall. In relative terms Merseyside has an above regional average concentration of GVA and employment in the financial services sector, but its shares of GVA business services are similar to the regional average and its employment share lower. Figure 3-16: Shares of GVA by Selected Sectors, North West Sub-Regions 2002 Sub-Regional Shares of GVA, 2002 35% 30%
% of GVA
25% 20% 15% 10% 5% 0% A ll Manufacturing
A ll Retail, Wholesale and Hotels and Restaurants
A ll Financial and Business Services
A ll Public Sector
Cumbria
Cheshire & Warrington
Greater Manchester
Lancashire
Merseyside
North West
Source: ONS © Crown Copyright, December 2004 Note: GVA at current basic prices for NUTS 2 areas; Cheshire and Warrington includes Halton.
Ref: A/00163 Page 50
North West Economic Baseline: Final Full Report - Regional Economic Performance
Figure 3-17: Shares of Employment by Selected Sectors, North West SubRegions 2003
%of employees in employment
Sub-Regional Shares of Employment, 2003 40% 35% 30% 25% 20% 15% 10% 5% 0% A ll Manufacturing
A ll Retail, Wholesale and Hotels and Restaurants
A ll Financial and Business Services
A ll Public Sector
Cumbria
Cheshire & Warrington
Greater Manchester
Lancashire
Merseyside
North West
Source: ONS © Crown Copyright Note: employees in employment
Our Trading Role 3.31
The region is a trading region. There is no comprehensive data on our market areas for service sector exports outside the UK or for goods and services within the UK. We do have good data on exports of goods from companies based in the region: • In 2003 the region exported £17.0bn of goods abroad, this figure equates to 17% of total GVA, and this proportion was very similar to the England average. We imported £16.6bn in goods, making only one of three English regions making a net contribution to the UK balance of trade17
Figure 3-18: Value of North West Exports, 2003 by Geographical Market Main Country
Export Value (£bns)
NW share of England
USA
2.710
North West 15.9%
16.4%
11.7%
Germany
2.144
12.6%
10.5%
14.5%
France Irish Republic Netherlands
1.402
8.2%
9.6%
10.4%
1.058
6.2%
6.1%
12.3%
0.860
5.1%
5.8%
10.5%
Italy
0.820
4.8%
4.5%
12.9%
Spain Saudi Arabia Belgium
0.803
4.7%
4.7%
12.2%
0.565
3.3%
1.2%
33.9%
0.563
3.3%
5.9%
6.7%
Japan
0.525
3.1%
2.3%
16.6%
11.449
67.3%
67.0%
All Above Source: HM C&E
17
% of all Visible Exports
The other two are the North East and East Midlands
Ref: A/00163 Page 51
England
North West Economic Baseline: Final Full Report - Regional Economic Performance • Other figures such as exports per firm or per head of population place the region very much in the average. In proportional terms, exports from the North East, East Midlands and the South East are higher. • The latest data for 2003, shows that our export markets are similar to the national picture, with 55% going to the EU (pre accession), 19% to North America. • Just 10 countries account for over two third of our exports. Our pattern of trade is broadly similar to the UK average, although Japan and Germany are relatively more and France relatively less important. The rest of exports are spread across a great many other countries.
Figure 3-19: Value of North West Exports, 2003 by Category Type of Export
Value £ms
Food and Live Animals Beverages and Tobacco Crude Materials, Inedible, excl. Fuels Minerals, Fuels, Lubricants etc. Animal and Vegetable Oils etc. Chemicals and Related Products Manufactured Goods Machinery and Transport Equipment Misc. Manufactured Goods Commodities not classified elsewhere Total
% of total North West
England
£715
4.2%
3.3%
£66
0.4%
1.0%
£497
2.9%
1.8%
£62
0.4%
3.9%
£17
0.1%
0.1%
£8,365
49.2%
18.8%
£1,951
11.5%
12.6%
£3,937
23.1%
44.7%
£1,379
8.1%
13.5%
£26
0.2%
0.2%
£17,013
100%
100%
Source: HM C&E
• Saudi Arabia stands out as a market due to the sales from the aerospace sector. • The nature of our exports is dominated by two broad categories: chemicals and related products account for 49% (£8.4bn) of all exports compared to 19% for England; machinery and transport equipment account for 23% (£3.9bn) compared to 45% for England. 3.32
At a more detailed level the export data shows that a few categories account for a large share of exports. In particular organic chemicals (£1.9bn or 31% of the UK total) and pharmaceutical products (£3.4bn or 29% of the UK total) are key exports from the region. Within the machinery and transport equipment category, the exports are spread across a range of goods. Direct exports of automotive goods (£480m) and other transport equipment (largely aerospace, £450m) were relatively small elements.
What are the Main Cross Border Economic Linkages? 3.33
Unfortunately there is no data on trade flows within the UK across regions. Data on goods moved on the roads indicates first that the majority of amount of tonnage moved on the roads which started in the North West ended in the region (69% in 2003 of goods whose destination was in the UK (see Table A6.10 in Appendix A). The two most important destinations externally for our goods were Yorkshire and the Humber and the West Midlands (6% each). This data indicates that the vast bulk of goods moved are for short journeys, it does not indicate the value of good moved or the importance to our economy of other UK markets. The data does not cover goods which arrive or leave the UK and so excludes exports moved from the region by road to ports.
Ref: A/00163 Page 52
North West Economic Baseline: Final Full Report - Regional Economic Performance 3.34
We have been able to analyse 2001 Census travel to work data to give some indication of the nature of labour market linkages with surrounding regional areas: • The main headline is that overall, as we would expect, the labour market across the whole region is relatively self contained. • Overall, around 80,000 workers commuted from the region to other parts of England and Wales19 (or 2.9% of residents in work) and around 100,000 commuted into the region (3.4% of those working in the region). Giving a modest net inflow. • These cross border flows are much more significant in some parts of the region, especially Cheshire and Warrington (where the inflow was 10% of those working and the outflow 7% of those living in the sub-region) and to a lesser extent Greater Manchester (inflow was 4% of those working). •
The following flows stand out: ¾
First, the strong cross border flows between North Wales and Cheshire/Greater Merseyside. Overall the impact is a net inflow from North Wales of around 10,000 workers.
¾
Second, the strong cross border flows between North Staffordshire and the region (especially Cheshire and Warrington), with a net inflow of around 4,000.
¾
Third, the strong inflows from Derbyshire (largely High Peak), with a net inflow of 12,000 (largely to Greater Manchester).
¾
Fourth, strong two way flows with West Yorkshire.
Figure 3-20: Travel to Work Patterns, 2001 (000s of people) Destination Origin
Cheshire
Cheshire
303
0
44
29
2
North West Total 377
Cumbria
0
209
1
0
4
214
3
217
33
0
974
16
24
1047
25
1072
34
0
19
493
12
558
13
571
Greater Manchester Greater Merseyside Lancashire
Cumbria
Greater Manchester
Greater Merseyside
Lancashire
All outside North West 29
All 407
4
3
34
15
545
601
12
613
North West Total
374
213
1071
553
586
2797
82
2880
All outside North West All
39
3
39
9
8
98
0
0
413
216
1110
562
594
2896
82
2880
Source: 2001 Census, travel to work statistics
3.35
19
The flows appear to reflect proximity, ease of access and relative economic opportunity. Within the region Greater Manchester stands out as the main area for net in-commuting, reflecting the economic success and scale of the sub-region. Overall, there is a net inflow from other areas of nearly 40,000 workers or 3.4% of its workforce. These net inflows are predominantly from Lancashire, Cheshire and Warrington and from outside the North West.
The data does not cover Scotland and Northern Ireland
Ref: A/00163 Page 53
North West Economic Baseline: Final Full Report - Regional Economic Performance 3.36
Cumbria stands out as the sub-region, which is not surprising given its geography, with the smallest labour market links either outside the region or with other parts of the region. The main flow is between South Cumbria and north Lancashire.
3.37
The scale and relative importance of “cross border” flows varies considerably by the skill level and gender of those in employment. For instance in Greater Manchester overall 12% of those who work in the sub-region are residents from outside the sub-region, however this rises to 30% in higher managerial and 24% in higher professional occupations but is just 5% for semi-routine occupations. There are similar variations in Greater Merseyside (see Tables A3.12 to A3.14 in Appendix A).
3.38
A key point for consideration is that for many sub-regions total flows across the border with surrounding regions are collectively more important flows than with any single North West sub-region. It is a mistake therefore to lose sight of the dynamics of these cross border links in considering the future economy of the region. Key points are: • North East Wales, with strong links to Chester and the Wirral, has been a dynamic and fast growing economy, which viewed collectively with the area around Chester has been a key economic growth pole. There are strong current and historic business and other links between North Wales and Chester/Liverpool. Chester tends to act as the business services centre for North Wales. • North Staffordshire has not been a dynamic economy and faces a difficult future from industrial re-structuring, it does offer a potential further source of labour for growth in the Crewe/Congleton area • The links between Greater Manchester and West Yorkshire (and to a lesser extent South Yorkshire) are a reminder of the economic continuum that operates along the M62/Transpennine corridor. Business and residents in Yorkshire and the Humber are major users of Manchester Airport and there is often strong links between professional firms between Manchester and Leeds, which, in terms of rail links, are nearly as close together and Manchester and Liverpool. • There are also strong links between East Lancashire and part of North Yorkshire (Skipton)/West Yorkshire (Aire Valley) • Finally, in Cumbria Carlisle acts as a sub-regional centre for parts of South West Scotland (Dumfries) as well as Cumbria. Border TV which serves this region is based in Carlisle. More importantly there are strong historic links to Scotland and much of Scottish trade passes through the region along the M6.
3.39
The region also has important links to Ireland (North and South). We have seen that in 2003 the Irish Republic was the fourth most important export market for the region (£1bn of exports), and a great deal of Irish trade to the UK and beyond passes through this region (via Liverpool, North Wales or Heysham and Scotland). The Irish Republic has been a rapidly growing economy and given its proximity the strength of links is not surprising. Although there is no hard data, Irish investors have played important roles in the regeneration of Manchester and Liverpool city centres.
Ref: A/00163 Page 54
North West Economic Baseline: Final Full Report - Regional Economic Performance
Where is the Region Heading? Key Drivers of Change 3.40
Most changes in the region’s economy are driven by external forces often outside the region’s direct control. Any assessment of future prospects has to make assumptions about these factors. Clearly, the key assumption in the longer term is the path of the UK economy and of different sectors in terms of employment and productivity growth. Any view about the region’s economy can easily be knocked off track by a downturn in the UK economy, which in turn is driven by global economic factors. The current short term forecasts for UK economic growth are for a slight slow down, but not at present for a significant slow down.
3.41
Looking to the future there are other key influences on the region’s economy including those summarised in Figure 3-21. In some cases the trends and dynamics are outside the regions influence, in other cases they are influenceable; furthermore some trends present opportunities and others may require pre-emptive (defensive) action.
Figure 3-21: External Drivers on the North West Potential External Comment Influencer Full effects of the expansion of the EU and its possible further expansion
• • • •
The possible entry of the UK into the Euro
•
Increasing cheaper production possibilities and continued move to “off shoring” of many lower value added manufacturing activities to cheaper cost locations. However, new and rapidly growing economies present market opportunities and Scope for increased immigration which could affect population growth and also the extent to which employment growth leads to reductions in worklessness Impact would depend on the rate at entry and the extent to which the UK and Euro zone economies are synchronised. Entry at too high a level would damage exports (55% of exports are to the EU and a large part of these to the Euro Zone). Lack of entry may reduce scope to attract inward investment (new and reinvestment)
•
Strong impact on our region’s rural economies. Change in farm subsidies alter relative economics of production, would be likely to lead to further reductions in farm incomes from agricultural sources especially on upland farms and pressures on less efficient farms. Although economic impact limited, important potential impact on landscape and tourism.
Post 2006 reforms to EU Structural Funds and State Aid rules
•
Almost certain to be a net reduction in EU funding for skills and economic development. Will be a particular issues in Merseyside, although transitional funding likely. Raises issues of ongoing support for a wide range of business and skills activities and delivery organisations
Continued growth in the large Asian economies of China and India Continued liberalisation of trade and globalisation of production including traded services
• •
Acting as major investment goods and consumer markets, but also increasingly as competitors in higher value added goods Opportunities for exporting and joint ventures
•
As already seen in the shift of call centres to India and elsewhere.
•
Globally demands for clean water are growing and access to water will become an increasing issues. The region has considerable expertise in water treatment.
•
Important changes include the growth in intelligent materials, the development of nanotechnology, the use of plastics and composites and further development in advanced manufacturing techniques impacting on our manufacturing sectors. There is need to understand how the region’s R&D strengths are positioned in relation to these emerging technologies.
•
An area of growth due to combination of ageing population and the high propensity to spend on health as incomes rise. Present opportunities for biotechnology, pharmaceutical and medical devices and firms involved in the supply chain to the health sector.
•
Could have major impact on the disposable income and wealth of residents of the region in the future. The impact may be more adverse than in other regions as housing equity lower in most parts of the region than in the south of England.
The impact of current and future Common Agricultural Policy (CAP) reform
Water resources
Technology changes
Strong growth in demand for medical related products and services Funding of future pensions
Ref: A/00163 Page 55
North West Economic Baseline: Final Full Report - Regional Economic Performance Figure 3-21: External Drivers on the North West Potential External Comment Influencer •
Decision by government about the scale and direction of spending related to Research, Sustainable Communities and Transport Infrastructure will influence the future economic performance of the region and scale of investment and construction activity
•
Other areas where Government policy may impact on the region are in terms of national planning policy, aviation policy
•
The profound increase in global temperature will affect the region’s climate (becoming warmer and wetter) and is likely to lead to increased flooding in lower lying areas. Agriculture and tourism will be particularly affected.
Long term changes in the cost of energy and energy policy
•
The possible impact of energy prices rising in response both to market pressures and global efforts to tackle greenhouse gas emissions. Particularly strong impact on some of the region’s sectors, such as chemicals and nuclear.
Impact of other environmental legislation
•
The impact of current and potential future EU Directives on re-cycling, emissions and other environmental matters provide potential cost for business but also business opportunities
UK Government policy in term of public sector spending and procurement Other Government Policy Climate change
Source: Regeneris Consulting
3.42
A key implication is that with the exception of the production of goods and services which need to be at or near the point of consumption or where close proximity to other businesses is essential, other activities will move to lower cost locations than the North West unless there is a clear comparative competitive advantage in location in this region (such as particular skills concentrations or knowledge). UK and Global Economic Context
3.43
As part of the development of the baseline, Experian have produced a summary report on UK and regional short to medium term economic prospects. Headline messages for the UK are: UK Economy: Headline Messages for 2005 and 2006
•
The global background remains positive, despite high oil prices.
•
UK growth faltered in the later part of 2004 due to falling industrial output, but is set to revive in 2005.
•
A slowdown in UK household spending is under way and 2005 will be the weakest year for a decade as
a result of higher interest rates and slower house price growth…although house prices are set for a soft landing in 2005. •
As UK consumer spending and government consumption moderate in 2005, prospects for growth
become highly dependent on investment and exports. •
In the case of investment, Experian forecast a continuation of the strong growth seen over the past year
and an export revival will support growth with export growth expected to approach 6 per cent in 2005. If achieved, this would be the strongest out-turn since the boom year of 2000. •
Experian expect annual export growth at around 5 per cent, in line with the expansion of world trade.
This assumes a strong increase in exports of services, since the UK will almost certainly continue to lose market share in manufactured goods to low-cost countries •
GDP will grow steadily at around its long-term trend over the medium term, The main motor of
employment (and GVA) growth will become private services with government services and construction growth moderating •
Interest rates are near their peak in the current cycle, as inflation remains subdued.
Ref: A/00163 Page 56
North West Economic Baseline: Final Full Report - Regional Economic Performance
Scenarios for the Future 3.44
We have examined future scenarios for the path of the region’s economy and the five subregions20 over the next 20 years. Attempting to look this far ahead is fraught with difficulties. Most forecasting models are driven by longer term trends based on past experience and are not well designed to pick up turning points in the fortunes of areas or indeed fundamental shifts in the success factors of locations. This work also drew on the recently published long term forecasts produced by the North West Economic Forecasting Panel. Their long term forecasts (which are not available for sub-regions) lie between Scenarios A and B below (that is to say they are more optimistic than the longer term trends scenario, but less optimistic that either the recent employment success or regional productivity transformation scenarios..
3.45
Our work has considered three main scenarios for regional economic prospects prepared by Experian. Clearly, as they are scenarios they should not be taken as predictors of what will happen, nor have we attached any greater weight or probability to any one scenario: • A. Longer term trends continue: assumes the relative performance of the region and its areas seen over the last two decades continuing by sector. Under this scenario the rate of growth of GVA lags behind that of the UK, largely because of lower employment growth but also slightly lower productivity growth. GVA per capita does not improve relative to the UK average. This is a fairly pessimistic scenario as the difficult industrial restructuring of the past decades in the region is unlikely to continue and impact in the same way in the future. • B. Recent employment success: assumes the strong employment growth over the last 4-5 years will continue into the future, but productivity performance remains sluggish. This assumption is applied to each sub-region, so the sub-regions who have performed best in terms of recent employment growth are assumed to continue to perform best into the future. Total employment growth rates exceed those of the UK, but GVA growth lags behind. Under this scenario employment rates grow and exceed the national average. • There are constraints on the likely unfolding of this scenario, which implies a continuation of employment growth which is able to soak up increasing numbers of relatively low skilled residents of the region and the ability to ensure the underlying, complex factors leading to worklessness can be addressed. • C. Regional productivity transformation: assumes the region as a whole is able to transform its economic base in two ways: ¾
First, so that the share of finance and business services reaches those of the UK average
¾
Second, productivity levels in its traded service sector improve to those of the best performing region outside London and the South East.
• Under this scenario the GVA growth rate equals that of the UK and there is an element of catch up in GVA per capita. However, under this scenario different sub-regions are assumed to perform differentially in relation both to their relative shares of sectors and in relation to their long run historic performance compared to the regional average. Growth rates in employment are not therefore necessarily consistent with those in the Recent Employment Scenario.
20
Based on modelling work undertaken by Experian
Ref: A/00163 Page 57
North West Economic Baseline: Final Full Report - Regional Economic Performance 3.46
Clearly, from a policy perspective Scenario A is the least desirable and Scenario C (at an overall regional level) the most desirable as only under this latter scenario is the GVA growth rate comparable with the UK average.
3.47
For modelling purposes, the assumed changes in population and working age population are identical under these three scenarios. All forecasting models are weak at modelling the relationship between economic performance and population change. Potentially, the recent trends in population if continued for the next few decades could help further transform the region’s growth prospects. The assumed changes in working age population, which is a key determinate of the assume capacity for employment growth, made by Experian are very similar to the most recent ONS 2003-based sub-national projections.
3.48
Figure 3-22 and Figure 3-23 summarises the main overall longer term implications of these scenarios at a regional level. The path of economic change assumed over the next 20 years is not uniform under the scenarios or across the period: • Under the longer term trends scenario a net growth of 80,000 jobs is assumed 2005 to 2010, followed by a decline of 20,000 2010 to 2015 and then growth of 60,000 2015 to 2025. • Under the two higher growth scenarios the assumed path is rather different: 140,000 extra jobs in the next 5 years, then 40,000 followed by 90,000 over the last 10 years. Figure 3-22: North West Growth Scenarios, 2005 to 2025 Scenario
Key Changes 2005-2025 Total Employment
Total GVA
GVA per fte job
Comment
GVA per capita
UK Comparison
+6%
+67%
+57%
+55%
A. Longer term trends
+1% (30k)
+51%
+53%
+47%
Scenario implies very sluggish regional growth with a further increase in GVA gap of the region and little net employment change
B. Recent employment success
+8% (270k)
+61%
+52%
+57%
Scenario implies strong employment growth at a faster pace than nationally, although at a slightly slow rate of productivity growth. Overall employment rates would exceed the UK average
C. Regional Productivity transformation
+8% (270k)
+66%
+56%
+62%
This in overall terms represents additional productivity growth as well as employment growth in scenario B. Overall GVA grows in line with the national average and GVA per capita grows faster than the national average
Source: Experian Note: under each scenario there is the same overall assumption about population growth of around 3% and of people of working age (16 to current retirement age)
Ref: A/00163 Page 58
North West Economic Baseline: Final Full Report - Regional Economic Performance
Figure 3-23: Forecasts of Employment Change, 2005-2025 F o r e c a s ts o f E m p lo y m e n t C h a n g e , 2 0 0 5 -2 0 2 5
U K B ase N W L o n g er T erm T ren d s N W R e c e n t E m p lo y m e n t S u cc e s s
9% 8%
8.0%
6 .9 %
7%
percentage
6% 5%
4 .5 %
4. 1 %
4% 3%
2.4%
2%
2.7%
2 .1 % 1 .1 %
1%
0.9%
0 .2 %
0% -1% -2%
2005-10
-0 . 6 %
-0 . 8 %
2010-2015
2015-2025
2005-2025
Source: Experian Note: UK growth assumed to be same under all scenarios. Employment is all employment full and part-time and includes the self employed
3.49
Experian also produce forecasts ahead to 2015 for EU regions. These suggest that the North West, under the relativity pessimistic longer term trends scenario, will see GDP grow at a similar rate to most other regions bar Este in Spain, but employment growth below all regions bar Bayern in Germany. Under the recent employment success scenario the region’s growth rate of GDP would exceed all other except Este and its employment growth rate would be similar to most other regions.
EU Benchmark Region Comparisons: Average annual growth rate (%) 2005-2015 Region
Population
North West (longer term trends) North West (recent employment success) Vlaames Gewest
0.1
Employment (fte) 0.1
0.1
0.4
0.1
0.3
2.1
Bayern
0.2
0.1
1.8
-0.1
1.0
2.9
0.5
0.6
2.3
-0.4
0.4
1.9
Este Centre Est Nord Ovest/Lombardia
GPD (constant prices) 2.0 2.5
Source: Experian
Implications of the Scenarios 3.50
There are a number of key points emerging from the scenarios: • Challenge of implications of longer term trends based scenario. Under this scenario the prospect is broadly more of the same, the region’s relative performance in the longer term reverts to “trend” with the rate of GVA growth, GVA per capita growth and employment growth performing at a similar relative rate to the last couple of decades. The recent improvement in relative performance is not translated through into the longer term.
Ref: A/00163 Page 59
North West Economic Baseline: Final Full Report - Regional Economic Performance • Ambition of alternative scenarios. Either the recent employment success or productivity transformation scenarios would represent a major step forward for the region and imply that recent improvements are not cyclical but become a permanent feature of the region. In both cases the region would be creating around an additional 300,000 jobs over the next 20 years. • Strong sectoral change: under the longer term trends scenario a large net decline in manufacturing employment is forecast up to 2025 (around -40% or around 200,000 jobs); and strong growth in communications (+60%, 35,000 jobs); business services (+20%, 80,000 jobs); education and health (+25% to +30%, 180,000 jobs); and other (personal) services (+50%, 100,000 jobs). For more detail see Appendix B. • Changes in employment rates: the big difference in the scenarios is the growth in employment rates in the region and its sub areas. The implication of the higher growth scenarios is a further substantial growth in the employment rate within a broadly static working age population and so success in drawing people into the labour market.
Potential Sub-Regional Implications 3.51
The scenarios throw up various and potential implications for the sub-regions. We counsel that too much weight should not be based on the precise figures given the great difficulties of attempting to predict sub-regional economic performance21. The general messages are as follows: • Cheshire and Warrington: over the last couple of decades it has been the fastest growing sub-region in the North West in terms of GVA, employment and population. The long term trends scenario is for a significant reduction in the growth rate, largely because of slow population and so labour supply growth. This fall in growth rate has at its heart the assumption that housing (and site) constraints on growth will limit the absolute scale of employment change. However, the rate of productivity growth is forecast to outperform the rest of the region. The area is expected to perform particularly strongly under the productivity transformational scenario as it has a higher share of employment in the traded service sector and so is well placed to capture this element of the region’s transformation. Under this scenario it would have a rate of growth faster than the national average. • Cumbria: over the longer term this has been the poorest performing sub-region in employment and especially GVA terms for a range of reasons linked to its economic structure. Under all scenarios this relative poor performance is expected to continue, with employment falling under all scenarios and GVA growth well below regional and national averages. The scenarios paint a bleak picture for the Cumbrian economy. This is consistent with the major adverse implications for the Cumbrian economy (especially West Cumbria) of the run down of nuclear re-processing activity at Sellafield. A recent report indicated that the impact of the run-down could be the reduction of 8,000 to 10,000 jobs on-site over the 20 years22.
21
Sub-regional forecasts under the different scenarios are included as Table A3.17 in Appendix A
22
“West Cumbria: Socio-Economic Study – 2003 Update” Prepared by ERM Economics, August 2003 for the The
Environment Council: BNFL National Stakeholder Dialogue
Ref: A/00163 Page 60
North West Economic Baseline: Final Full Report - Regional Economic Performance • Greater Manchester: this is forecast to be the best performing sub-region under all scenarios, in part because it is expected to have the fastest growing working age population. It performs well under the recent employment success scenario where net employment growth of 140,000 jobs (2005 to 2025) and even stronger under the productivity transformation scenario (160,000 jobs or 60% of all net regional growth) where it benefits in a similar way to Cheshire and Warrington. GVA per capita is forecast to exceed the UK average by 2025 as is the employment rate under the two faster growth scenarios. The subregion does particularly well under the productivity transformation scenario because of the relative concentration of employment in business services and other sectors. • Greater Merseyside: forecasting the growth path of the Merseyside economy produces the greatest contrast under the scenarios. The prognosis for the sub-region is gloomy under the longer term trends scenario, with total employment falling slightly from 2005, productivity lagging and the employment rate changing little. Under the recent employment success scenario there is much stronger employment growth (around 60,000 extra jobs to 2025) and consequent GVA growth, with GVA per capita improving significantly compared to the England average. The prospects are not as positive as under the productivity transformation scenario as the sub-region’s employment base is less well placed to benefit from the productivity improvements and shift in pattern of employment (as the current share of business services employment is a key factor here). • Lancashire: this area is forecast to perform very slightly better than the regional average in terms of employment creation under all the longer term trends and productivity transformation scenarios, however less well under recent employment success (as the relative increase in employees has been less than other sub-regions). It is only under the productivity transformation scenario that the area is expected to see a relative improvement in GVA per capita compared to the current position (and 60,000 additional jobs). Figure 3-24 : Estimated GVA per capita in 2025 Under Different Scenarios (England=100) Area (England=100)
2005
Scenario in 2025
Base Estimate
North West Cheshire & Warrington
Longer term trends
Recent Employment Success
Regional Productivity Transformation
89
85
91
93 114
111
104
110
Cumbria
77
60
65
64
Greater Manchester
94
94
99
103
Greater Merseyside
76
71
80
77
Lancashire
86
81
84
87
Source: Experian forecasts and estimates Notes: population change is constant under each scenario; GVA is workplace based
Ref: A/00163 Page 61
North West Economic Baseline: Final Full Report - Regional Economic Performance
Figure 3-25: Estimated Total Employment Change by 2025 Under Different Scenarios Area
2005
Change 2005 to 2025
Base Estimate
Longer term trends 000s
North West
3,360
32
%
Recent Employment Success 000s
1%
270
% 8%
Regional Productivity Transformation 000s 270
% 8%
Cheshire & Warrington
489
6
1%
34
7%
46
9%
Cumbria
230
-26
-11%
-8
-4%
-16
-7%
Greater Manchester
1,291
60
5%
138
11%
162
13%
Greater Merseyside
655
-23
-3%
55
8%
19
3%
Lancashire
696
14
2%
51
7%
60
9%
Source: Experian forecasts and estimates Notes: (1) estimates of total not full-time equivalent, includes employees and self-employed (2) predicted UK growth= 7% over this period
Ref: A/00163 Page 62
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills
4.
Addressing Business Competitiveness and Skills Key Issues for the RES • There is a large productivity gap of the order of £9bn to £10bn in 2003. Much of this is accounted for by services, most noticeably business services. The issue appears to be about the composition of activity undertaken within this sector which reflects the skills base of the region and nature of markets served. In contrast, overall productivity in the region’s manufacturing sector is similar to the national average (and above it in some subsectors). • There remains a relatively large enterprise gap, explained in part by the region’s industrial structure and legacy and by the skills profile and socio-economic composition of the population. However, cultural attitudes to enterprise are also a key explanatory factor. There is some evidence that the gap has narrowed and will continue to do so as the region’s skills profile and industrial structure continues to converge with those of the UK as a whole. • There are strong world class peaks of innovation and research. However, outside of these concentrations there appears to be a long tail of relatively ‘low-innovation’ firms. • There is a strong higher level skills gap (“knowledge workers”); however there are major variations in the presence of these across the region, with some locations proving attractive. There is some evidence that these workers, who are often nationally or even internationally mobile, cluster in locations which are accessible to suitable job opportunities and are attractive environments for living. • Although the majority of skills demand comes from replacement demand for jobs (often at NVQ Level 2), in overall terms the strong net growth will be at Level 4 (graduate level). • The extent to which future supply of labour will be sufficient is finely balanced; much depends on the working patterns of those aged over 55 in the future.
Overall Business Competitiveness 4.1
We have seen in the previous section the headline finding that in terms of GVA per person employed overall the region is relatively uncompetitive. In making the comparisons in this section we focus on the North West’s relative position within the UK, simply because there is a much richer set of data available. However, in reality for many sectors it is not the relative competitiveness in a UK sense that matters but global competitiveness. So for instance, the region of a sector might appear to score well on skills and innovation, but overall if the UK is lagging our major competitors then there is still cause for concern.
4.2
The DTI have recently published their latest assessment of relative UK competitiveness23 based on data up to 2002. The headline findings from this research are that the UK economy has been very successful at creating employment but less successful in raising labour productivity (overall and per hour worked). In terms of the DTI’s five drivers of productivity:
23
“DTI Economic Paper No. 6: UK Productivity and Competitiveness Indicators, 2003” DTI November 2003 http://www.dti.gov.uk/competitiveness/pdf/indicators2003.pdf
Ref: A/00163 Page 63
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills • Investment: the UK lags our major competitors in terms of levels of business investment and business R&D investment, it is catching up in terms of government investment • Innovation: the UK performs strongly on science and basic research but less well in innovation and translating science into products and processes. Patenting is behind other competitors, but catching up. • Skill: we perform well in terms of higher level skills but relatively poorly in terms of basic and intermediate level skills, overall human capital is a relative weakness. In terms of lifelong learning we are middle ranking. Management skills in the UK are overall perceived as weak compared to competitors. ICT skills are making strong progress. • Enterprise: the UK is a “middle ranking enterprise economy”, with level of enterprise well behind those of the US and evidence of risk aversions • Competition: the competitive environment for business in the UK scores well compared to most other competitors, the flexible labour market is strength.
There has been a complex pattern of sectoral change… 4.3
4.4
In which sectors has the economy been most competitive in recent years? There are different measures of competitiveness, but the richest data is for employment creation. Figure 4-1 shows sectoral performance for key sectors and Table A3.10 in Appendix A provides more detail. The main sectors where growth has occurred (1999-2003) are: ¾
Public sector services (+75,000 jobs or a growth of 10% in line with the 11% growth for all England) (split 25,000 growth in education and 46,000 growth in health/social care and 5,000 in public admin)
¾
Financial and business services (+71,000 or 16%, much faster than the England average of 7%) – all the net growth has been in business services (employment actually declined on average in financial services). At a more detailed level the region has performed quite strongly in absolute and relative terms in employment creation in key traded services (computer and related, 13,000 jobs and 37% growth; other (specialised) business services, 50,000 jobs and 19% growth).
¾
Distribution, hotels and catering (+42,000 or 6% in line with the England average of 6%);
¾
Transport and communications (+25,000 or 16%, much faster than the England average of 3%).
How do we square these figures with the analysis in the previous section on falls in GVA per employee and the weak performance in business services? • First, many of the new jobs created in traded services sectors are quite probably “call centre” type jobs, which are relatively low paid and low GVA generating (see Appendix B); and • Second, the region has seen a relative reduction in the scale of its manufacturing sector where jobs tend to be relatively higher value added. However, those job shed in the manufacturing sector have tended to be at the lower value added end of the spectrum, boosting productivity within the sector.
Ref: A/00163 Page 64
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills
Figure 4-1: Pattern of Sectoral Employment Change, North West 1999-2003 Employment growth 19992003
Change Much Better than National Rate (over 10%)
Major Regional Employment Growth (over 10,000 jobs)
•
Significant growth (4,000 to 10,000 jobs)
• •
Significant decline (4,000 to 10,000 jobs)
•
• • •
Change Similar or Slightly better than National Rate
Change Worse than National Rate (by over 2%)
Other business activities Construction Computer and related Real estate activities
• • •
Health and social work Hotels and restaurants Supporting transport activities
• • •
Land transport Financial services (except insurance and pension funding)
•
•
• • •
Recreational, cultural and sporting activities Communications Personal services Public administration
• • • • • • • • •
Metal products Chemicals and chemical products Garages Wholesaling Transport equipment Food and Drink Clothing Other machinery and equipment Textiles
• •
• • •
Education Retailing
Water Insurance and pension funding, except compulsory social security Automotive Pulp and paper Electrical machinery
Source: ABI © Crown Copyright and Regeneris Consulting analysis
4.5
It is not possible to carry out an identical analysis for changes in GVA as there is not the same degree of sectoral disaggregation. However, at a broad level, taking the period 1999 to 2003 we are able to identify sectors in terms of their absolute and relative performance (see Table A3.6 in Appendix A). Figure 4-2 shows that in most sectors GVA growth was similar to the England average, the region exceed the rate of growth (or decline) in education, transport & communications and manufacturing (where the rate of decline was slightly less than the England rate). The rate of growth was worse in health, financial services and retail/wholesale. Figure 4-2: Sectoral GVA Change, North West 1999-2002, Compared to England Rate of growth compared to England average Absolute Rate of Change Better Similar Worse • Construction (33%, £1.4bn) • Financial services Above Regional • Education (30%, (+41%, £1.3bn) £1.5bn) • Business services (24%, Average •
Around Regional Average
•
Below Regional Average
•
Transport and communications (15%, £1.0bn)
•
Manufacturing (-1%, £0.1bn)
•
•
£3.7bn) Hotels and catering (19%, £0.5bn)
•
Health and social work (+19%, £1.1bn)
•
Wholesale and retail trade (+12%, £1.3bn)
Other services (19%, £0.7bn) Public administration (16%, £0.6bn) Agriculture (-6%, £50m)
Source: ONS Gross Value Added by industry groups, current basic prices by region December 2004 Note: regional average was 15% growth in total nominal GVA
Ref: A/00163 Page 65
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills
4.6
We have been able to carry out a more detailed analysis available of productivity by manufacturing sector (unfortunately a similar analysis is not available for services - see Table A4.1 in Appendix A). There a number of important features of the region’s manufacturing sector: • First, as already noted on average the region’s manufacturing productivity is slightly above the England average. The particular nature of our manufacturing base - with high shares of activity in capital intensive activity (e.g. chemicals and nuclear fuel re-processing) tends to boost our GVA per employee – the effect was to boost it by around 6% compared to the England average (based on 2001 data). As actual GVA per employee in the manufacturing sector is only 1.3% above the England average we can see that the relative productivity on a like by like basis by sector is below the England average (by around 4% overall). • Second, only four sectors stand out as having productivity above the national average for these sectors: chemicals (including pharmaceuticals), rubber/plastics, transport equipment and other non-metallic products (including glass). Two of these are also key export sectors. • Third, the region has above average shares of activity in a number of sectors which are highly capital intensive and so has above average GVA per employee: chemicals, nuclear reprocessing and transport equipment. • Fourth, were it not for these three sectors the performance of the region’s manufacturing sector would look much less strong. Indeed productivity per employee is below the England average in 10 out of Sensitivity of an Upward Shift in Productivity the 14 sectors. per Worker in Service Sector
• What is the potential impact of step change in productivity per worker to the best performing region outside London and the South East in financial services, business services, public admin and communications? • This change leads to a fundamental improvement in the region’s economic performance with an extra £14.4bn of GVA by 2025 compared to the longer term trends scenario (an uplift of 10%). The improvement would be very similar in most subregions bar Cumbria, which benefits less from the change due to its low base in these services.
4.7
The conclusions from this analysis are consistent with the comments elsewhere about the poorer performance of the region’s economy outside of a few peaks and world class players.
4.8
We have already noted the poor performance of the region in terms of productivity per employee in the business services sector compared to the England average. In part this is due to Source: analysis by Experian and Regeneris Consulting the London effect. However, when we benchmark the region against England less London there is still a significant difference in average GVA per employee: the gap is 18% rather than 20%. Other regions such as the South West, East and West Midlands have much higher apparent GVA per employee (we assume to proximity and spillover effects from London and the South East). We have modelled that impact of shifting service sector productivity – see box – to the best performing regions outside the greater South East.
Ref: A/00163 Page 66
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills 4.9
Unfortunately, there is very limited data on the business services sector in terms of any sectoral disaggregation of GVA and productivity and on market areas (in particular how the sector and its elements are serving regional needs or serving wider markets). Also we are unable to measure the extent to which the relatively low concentration of headquarters of major firms acts as a constraint on demand for regionally delivered business services.
4.10
Within the business services sector those parts related to ICT/digital industries and to supporting manufacturing (design, consultancy, marketing etc), are areas where the region may have the greatest growth potential. In some cases these will be covered by existing cluster programmes and activities. There are distinct areas of regional specialisation…..
4.11
What are the sectors in which we appear to have a significant degree of specialisation? Figure 4-3 uses employment data at a fine grained detail to establish those activities where, compared either to the England average (for manufacturing) or the England less London average (for services), we have a degree of specialisation. This analysis has significant limitations, not least that it is driven by traditional SIC sector classifications. It is however, the most reliable source of relative comparisons of sector scale and strengths at a finegrained level. Unfortunately the data is only available up to 2003 and so does not cover changes since then. The analysis is weakest in trying to capture emerging sectors and ones which cut across SIC boundaries (such as creative and media, environmental technologies, digital). Having said this, if there were very obvious existing large strengths it is the view of the consultants that they would be picked up.
4.12
The analysis only looks at those sectors employing more than 10,000 in 2003 (and so by definition my exclude some very small but important sectors). The key points are that: • First, not surprisingly given the size of the region looked at as a whole relatively few strong specialisations stand out. That is not to say at a sub-regional or local level there are not more specific specialisations. • Second, our specialisations tend to be in manufacturing related activities, although, would the data allow, in some cases it would tend to show strength in related service sector activities. • Third, those specialisations that do exist are largely linked to historic strengths and industrial structure of the region. •
4.13
Fourth, the region as a whole has very few service sector specialisms.
The main specialisms which stand out are: • Traditional industrial strengths of chemicals (a sector which is very important in GVA and export terms as well), textiles and aerospace (also important in export and GVA terms). • Smaller scale but highly specialised activities related to nuclear fuel reprocessing and the pharmaceuticals sector (both sector important in GVA terms and the latter in export terms). • Other manufacturing sectors where we have more modest specialisation such as food and drink, pulp/paper and rubber/plastics (which is linked to the chemicals sector).
Ref: A/00163 Page 67
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills • In the service sector the two areas with the greatest specialisation are the travel sector (travel companies, many of whom are located in the region, in part due to the presence of Manchester Airport) and home shopping (the region is home to several of the UK and Europe’s biggest players) • Other significant sectors with some degree of specialisation are air travel and tourism related (hotels, recreation and property letting) • Public sector administration and social security reflect the large number of administrative functions in the region (although these tend not to be higher value jobs). 4.14
Some sectors are slightly noticeable by their absence. For instance automotive does not stand out in this analysis nor do some of the target clusters such as construction, creative industries, digital industries, environmental technologies, finance and professional services, maritime and sport. In some cases this is simply because the region as a whole has no significant specialisation (e.g. automotive) and in others because the clusters tend to be hidden in the data (creative, digital and environmental). It is also the case that some sector which are large and important (e.g. construction) are not regional specialisms.
4.15
The exercise can also be repeated at a sub-regional level (see Figure 4-4). Although such an approach tends to throw up more apparent specialisms for the smaller, less average economies such as Cumbria, the sector specialisms identified through this exercise are very similar to those at a regional level. It is perhaps surprising that sectors such as business and financial services, or creative and media do not show up in Greater Manchester. The reason for this is the sheer scale of the Greater Manchester economy, so although these sectors are very important in the Manchester local authority area at a sub-regional level they do not stand out as strong specialisms.
Figure 4-3: North West, Sector Specialisms, 2003 (defined by SIC codes and employment) Manufacturing Related
Degree of Specialisation
Large Scale
Service Sector
Smaller Scale
Large Scale
Highly Specialised
• • •
Chemicals Textiles Aerospace
• •
Nuclear Pharmaceuticals
• •
Travel Home shopping
Medium Specialised
•
Food and drink
•
Pulp and paper
• •
Air transport Social security
Lower degree of specialisation
•
Rubber and plastics
• •
•
Hotels Other recreational activities Property letting Investigation and security Public sector admin
• •
Advertising Database activities
• •
Other scale)
(smaller
•
Clothing
Smaller Scale
•
Water and sewage supply
Source: Regeneris Consulting analysis of ABI © Crown Copyright. Carried out at a SIC three digit level Notes: Specialisation based on location quotient analysis. Highly is over 1.5; medium 1.2 to 1.49; lower 1.1 to 1.19 (these are with reference to England for manufacturing and England less London for services) Scale is by reference to employment only: smaller scale is 10,000 to 20,000; larger over 20,000. This analysis cannot be repeated for GVA
Ref: A/00163 Page 68
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills
Figure 4-4: North West Sub-Regions Sector Specialisms 2003 (defined by SIC codes and employment) Primary Manufacturing Related
Service Sector
•
Agriculture, forestry, food and drink, wood manufacture, nuclear, chemicals
•
Hotels and catering, recreational services
•
Paper, nuclear, chemicals, motor vehicles, water
•
Financial services
Greater Manchester
•
Textiles
•
Air travel, travel sector
Greater Merseyside
•
Chemicals
•
Public admin
Lancashire
•
Aerospace, paper, textiles, clothing, rubber/plastics
Cumbria Cheshire Warrington
and
Source: Regeneris Consulting analysis of ABI © Crown Copyright, carried out at a SIC two digit level Notes: Specialisation based on location quotient analysis for those sector with a LQ over 1.5 and at least 0.5% of sub-regional employment; (these are with reference to England for manufacturing and England less London for services). This analysis cannot be repeated for GVA In Greater Manchester clothing, food and drink and in Greater Merseyside health/social work nearly included (LQs of 1.4. Also insurance and other business services both had LQs for England less London of 1.3.
4.16
The region has about 10% fewer people employed in broad “knowledge” sectors than the England average and needs to see about 90,000 people shift into these employment sectors to match the national average (see Table A3.4 in Appendix A)24. However, between 1998 and 2003, the North West managed to grow its base of knowledge sector employment by 88,000 people representing a 5 year average growth rate of 2.6% compared to a national growth rate of 1.5%. Over the period since 2000 the region’s relative performance was even stronger as overall employment in these sectors stood still in England but grew by 9% (60,000) in the region. The main concentration of growth in the region has been in Greater Manchester and, since 2000, in Cheshire and Warrington. At these relative rates of growth the proportion of North West employees in knowledge sectors will converge with the national average in 2020.
4.17
This is one area where we can benchmark the region to some degree internationally using the EU benchmark regions. Figure 4-5 shows that the region performs in the middle rank of the benchmark EU regions, although it has seen the second fastest rate of increase since 1998 (after Este in Spain). We also have data on employment in knowledge intensive services – this puts the region as having one of the highest proportions.
24
Note: this definition is based on those private business sectors where nationally more than 25% of the workforce is of graduate level (NVQ level 4 or equivalent or higher as of 2001). However, it is important to note that this definition is very broad brush and needs to be treated cautiously and does not differentiate between the quality of employment. In these sectors which may vary from region to region.
Ref: A/00163 Page 69
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills Figure 4-5: Share of Employment in High Technology Sectors, 2001
17% 14% 10%
Hum ber
andThe
9%
Yorkshire
11%
Este
12%
Centre-Est
Vlaam s
Gewest
Lom bardia
12%
NorthW est
15%
NordOvest
20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%
Bayern
percentage
Percentage of Employment in HighTech Manufacturing and Services, 2001
Source: Eurostat. Note: defined as NAICE DG24, DK29 to DM35, I64, K72 and K73
Regional Performance in Relation to Innovation and R&D 4.18
Getting reliable regional data on innovation is problematic; we have considered information on R&D and some national innovation surveys. There is no reliable data at a sub-regional level. In terms of innovation the story in the region is of some Himalayan style peaks, but with a large tail of companies underperforming in relation to rates of innovation: • The North West has a reasonable overall performance in terms of R&D spend, bolstered by strong business R&D spend. However, business R&D spend is highly concentrated in a few sectors and few firms (pharmaceuticals, nuclear, chemicals, aerospace) where we have world class firms and world centres of R&D. • Despite high levels of investment, the North West has lower than average numbers of people working in R&D – between 1998 and 2003 the proportion employed in R&D in the North West actually fell from the national average to 15% below. • All of these indicators point to the likelihood that the North West’s R&D spend is dependent on a small number of large companies, investing heavily in expensive R&D which actually requires relatively few people. R&D activity traditionally concentrated in a few sectors, in which the North West has a strong base e.g. aerospace, pharmaceuticals and chemicals. As a 2001 report by Arthur D Little stated, “Given the size of investment by major
firms – AstraZeneca, BNFL, Unilever, BAE Systems for example – it is clear that the private sector science base is overwhelmingly in a few influential hands.”25 • The region’s share of government funded (non-HEI) R&D is poor (just 31% of the England average per head of population in 2001) and far lower than regions in the south of England, however our share of HEI R&D is a bit higher but still 15% below the England national average.
25
A D Little (2001) North West Science and Daresbury Development Study, p7. The main players in this regard were identified to be: AstraZeneca, BNFL, Avecia, Unilever, BAE Systems, ICI and Pilkington.
Ref: A/00163 Page 70
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills • Other measures of business innovation are less positive when looking at performance across the broad sweep of the region’s business base. In 2001, for instance, patent applications per 10,000 adults were 27% below the England average (see Figure 4-6). EU regional data for 2001 benchmarked the North West at 12 high tech patents per million inhabitants. This was better than Este (6) and Nord Ovest (9) regions, but low than the other four regions and considerably lower than Bayern (128), Centre Est (35) and Lombardia (19). • According to DTI figures26, the region had the second lowest proportion of “innovation active” firms over the period 1998-2000 - this pattern was consistent by size and sector of firm. • In terms of ICT, the recent NWDA ASPIRE survey has revealed some potentially worrying figures27:
4.19
26
¾
26% of businesses do not use computer systems, although non-use is predominantly skewed towards smaller businesses
¾
40% of companies with PCs do not have a local network and just 13% are linked into a wider network
¾
81% of those not using PCs believe their company has no need for IT
¾
Nearly 60% of companies with over 50 employees provide no means for staff to remotely access internal systems
¾
Only 40% of businesses are certain that broadband is available at their premises, whereas according to BT current coverage is 98% of NorthWest households (and presumably a slightly higher number of businesses).
There are no national benchmark comparable figures to this survey. A national DTI ICT Benchmarking Survey28 indicated a rather more positive view of the overall position of the region compared to other parts of the country.
However, patent application data needs careful interpretation as firms based in the North West may not necessarily register patents in the region.
27
When reading these statistics, it should be borne in mind that nearly 36% of the 8,934 respondents were from businesses with 10 or fewer employees and who stated that they “need no IT skills to do their job effectively”.
28
“Business in the Information Age: The International Benchmarking Study” 2004, DTI
Ref: A/00163 Page 71
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills
Figure 4-6: Patents Per 1,000 Firms, 2001 12
1 0 .9
1 0 .5
9 .9
patents per 1,000 firms
10
9 .7 8 .9
8
7 .6
7 .5
7 .4 6 .6
6
5 .2
4 2
es t
d an gl En
hi rk s
W
Yo
la id M
h ut So
re
s nd
es W
Ea So
ut
h
Ea N
or th
W
t
st
st
t es
on or th
Lo
nd N
of st Ea
Ea
st
M
id
En
gl
la nd
an
s
d
0
Source: Patent Office Annual Reports
The Extent and Potential of the Region’s Knowledge Base 4.20
Knowledge represents a key asset which will distinguish western post-industrialised economies from lower cost competitors elsewhere in the world. Valuable knowledge is a scarce and precious commodity which is hard to develop, exploit and retain. Intense competition for scare knowledge resources is likely to be major feature of regional and cityregional economies in coming years. In the region the knowledge assets we have at present are the Higher Education (and in some cases further education) institutions (in terms of research, but also teaching), research and development activity and centres in the region’s major firms (manufacturing and service) and finally the pool of “knowledge workers” – that is to say people who use advanced knowledge in their work. This could for instance include all the workers with advanced ICT skills operating across the manufacturing and service sectors. Knowledge assets and workers tend to be concentrated in terms of either living or working in parts of the region such as the two main conurbation cores and parts of Cheshire and Warrington. Although there are important concentrations in Lancashire and in isolated locations such as West Cumbria (focused around the nuclear sector).
4.21
However when the other two key sources of R&D investment (HE & Government) are added back in and spend per resident is considered, the Region falls back down the rankings to 5th place. R&D Expenditure from government is almost negligible in this context and HE plays only a modest role. The low level of government investment in the North West is explained in large part by the fact that public sector research institutions are unevenly distributed across the UK, with the majority in the Southern regions, and probably driven by the location of major institutions. In short, although business expenditure on R&D is comparatively high, all sources of R&D investment need to grow to match levels in South & East.
Ref: A/00163 Page 72
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills
4.22
Significant investment goes into the region’s HEIs each year, with the lion’s share going to the newly unified Manchester University (£61m of the £110m of Government funded research in the region in 2004/5) followed by Liverpool University (£22m). Although there are many highly rated departments (4 and 5), the region has smaller numbers which are truly internationally recognised as excellent (5*), particularly in the important Science, Engineering & Technology arena. A city analysis of the core cities shows that the universities in Greater Manchester received the largest allocation for teaching and research. Figure 4-7: R&D Expenditure Per 10,000 Inhabitants, 2001 £7,000,000
Expenditure on R&D per 10,000 residents by Region and Sector, 2001
HEI expenditure
£6,000,000
Governm ent expenditure £5,000,000
Business Expenditure
£4,000,000 £3,000,000 £2,000,000 £1,000,000 £0 East
S outh East
East Midlands
S outh West
North West
London
West Midlands
Yorkshire and the Humber
North East
Source: ONS Regional Trends, 38 and NOMIS, Mid-year population estimates. 4.23
An initial review of the region’s science base suggests that there are some excellent strengths: • Bioscience - especially biomedical science - is the pre-eminent area of strength, with the Northwest well placed to exploit the ‘new biology’. Clinical links are excellent despite low NHS R&D funding compared to the size of the region, and exploit a good base of regional patient data. • Aspects of the physical sciences are strong: examples are surfaces and catalysis, physics, imaging, nuclear sciences (in the private sector). Computer science, communications, modelling and mathematical/statistical sciences are strong and widely relevant. • University strengths in management and social sciences are important assets for nonscience-based development.
Ref: A/00163 Page 73
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills 4.24
Industrial change has reduced R&D in some areas important to the Northwest, and has altered university-industry relationships. Although all regions face a major challenge exploiting their HEI assets, the North West appears to be somewhat behind its counter-parts. There is some evidence to suggest that the region’s HEIs’ links with firms and exploitation of Intellectual Property underperforms many other regions30. The average number of contracts with the private sector per HEI in the North West was 20% below the England average in 2001-2 and at the lower end of the spectrum when regions are compared. The situation may well have improved since 2001-2.
The North West’s Performance in Terms of Enterprise 4.25
New businesses are the bed-rock of future economic opportunities and prosperity. Although many new businesses struggle to survive and, directly, often contribute little value into an economy, the spirit of enterprise from which they emerge is a key indicator of the vitality, buoyancy and confidence in local markets and communities. New entrants mean greater competition for existing suppliers and greater momentum in the cycle of innovation which leads to new ideas, products, services and processes. The North West region must keep pace with progress in other UK and European regions if it is to stand a chance of closing the gap on the best performing areas. A considerable body of academic research shows that successful economies are associated with above average rates of business start-ups.
4.26
The North West starts from a low business base: the region’s stock of VAT registered business per 10,000 adults31 is 18% below the England average and only the North East has a lower density of businesses. The North West would need another 38,000 businesses if it were to mirror national levels. The North West start up rate per 10,000 adults is 17% below the English average in 2003, making it the third worst performing region in England and hence contributing to the gap in the total stock of businesses (see Table A4.5 in Appendix A). To compound the low levels of existing and new businesses, those which are established tend not to be as durable as those in other regions. The three year survival rate of new businesses in the North West between 1999 and 2002 is slightly below the national average (63.6% compared to 65.9%), making the North West the second worst performing region, (behind London which has a much larger formation rate as a cushion).
4.27
Whilst there is some evidence that the North West is slowly beginning to make up ground on the England average, there is no scope for complacency. Were the North West to maintain its 2003 growth rate in total business stock, it would still take the region until nearly 2020 to hit the current national average for net registrations per 10,000 registered businesses.
4.28
Why is the enterprise rate so low? There appear to be four main explanations: • First, the demand and economic conditions have been simply not as buoyant in many parts of the region as other areas, dampening down business opportunities. Nationally, past population growth is highly correlated with start-up rates. • Second, our skills and socio-economic mix is not conducive to enterprise. People with higher skills and qualifications are much more likely to start new businesses and we have a gap in these groups.
30
“Higher Education Business Interaction Survey 2001-2” HEFCE 20004
31
Adults of working age population 15-64 years old.
Ref: A/00163 Page 74
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills • Third, our past industrial structure – business start rates are negatively correlated with high shares of employment in manufacturing and positively correlated with high shares of employment in business services. • Fourth, linked to the above cultural and role model factors. There is limited data which gets to the heart of this issue, but the Global Entrepreneurship Monitor (2004) suggests that residents of the region are 12% less likely to know an entrepreneur than the England average. Research suggests that this type of knowledge and experience of entrepreneurial activity plays an important role in influencing the decision to start businesses. 4.29
Much of the explanation is provided by the first three factors, many of which are not about a lack of an ‘enterprising culture’ per se but the social and industrial structure in the region. However, when taking them into account there is still a strong residual factor, which is likely to relate to cultural factors. There are some signs that some of these factors may be weakening. The incidence of enterprise (as proxied by self employment) tends to be slightly higher amongst younger age groups in the region, as industrial structure and skills factors converge to national averages.
4.30
Enterprise also varies greatly by area within the region (see Figure 4-8) – driven by the factors above which tend to be strongly correlated with each other. The business start-up rate per 10,000 adults varies from 3% below the England average (Cheshire and Warrington) to 38% below in Greater Merseyside. The current “gap” of 38,000 businesses is concentrated in a few areas. We have evaluated the overall performance and potential of these districts along a range of variables. Table A4.11 in Appendix A compares the performance of the districts on the basis of four factors:
Ref: A/00163 Page 75
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills • Backdrop: composed of the current level of new business registrations and business density in the district
Figure 4-8: Rate of VAT Registrations per 10,000 Adults by District, 2003
• Supporting factors: consisting of the factors identified, which are positively associated with business start up rates – the level of earnings of residents in the district; the proportion of the working age population qualified to NVQ4+; recent population change; and the current self employment rate • Enterprise gap: composed of the gap on the national level in the level of selfemployment, the number of new business registrations, and the business stock.
Source: Admin Map 2005, Nomis VAT Registrations © Crown Copyright
• Trend in business density: over the period 1998-2003 (although it is recognised that this may mask recent improvements in business densities in more recent years).
From this it is possible to identify three broad categories of district: • Those with a favourable backdrop, and a positive recent growth trend but with an identified gap where the region will wish to make progress towards national patterns of enterprise. Included in this category would be Bury and Warrington, for example. • Areas with no or little gap (i.e. a surplus) where the region will wish to maintain current performance and concentrate on building higher value adding new starts or simply maintain current performance, such as Eden, Congleton, Macclesfield, Trafford. • Areas with a clear gap, and/or really tough context or negative trend patterns where prospects are difficult, but need is arguably greatest. Districts falling into this category would be Blackpool, Knowsley and Barrow-in-Furness.
Ref: A/00163 Page 76
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills 4.31
Looking at cultural attitudes toward enterprise, it would appear that people in the North West believe they have the requisite skills to start a business but tend to have a greater fear of failure than in other regions. Significantly, only 25% of people in the North West are acquainted with an entrepreneur – this is the second lowest of the English regions and possibly a major factor in people’s inclination to start a business.32
4.32
Self-employment varies across age bands and the regional age profile is but one factor in shaping current levels of enterprise in the North West. Self-employment rates are lower in younger age groups and peak out at the 55-59 age bracket. The North-West deficit in numbers of self-employed can be attributed to key age groups. Figure 4-9 shows that it is those age groups with the highest rates of self-employment (broadly 35 to 69 year olds) for whom that the region experiences the greatest deficit. Looking to younger age groups, the prospects for closing the deficit in coming years do not look positive – although the scale of each age group stays steady until its falls dramatically with the 25 to 29 group. This would be tolerable if there were already high levels of self-employment in these younger age groups which would roll forward – this however is not the case. Levels of self-employment drop off dramatically in age bands below the age of 40.
600,000
12.0%
500,000
10.0%
400,000
8.0%
300,000
6.0%
200,000
4.0%
100,000
2.0%
-
0.0% 16
0
17 -79
-30
16
17
18
19
-117
-185
18
19
20 to 24
25 to 29
30 to 34
20 to 24
25 to 29
30 to 34
35 to 39
35 to 39
40 to 44
40 to 44
45 to 49
45 to 49
50 to 54
50 to 54
55 to 59
55 to 59
60 to 64
60 to 64
65 to 69
Regional Defecit in Self Employed
-2000 -3000
70 to 74 -1,074
-1,463 -2,238
-2,589
-4000 -5000
70 to 74
65 to 69
-1000
-4,449 -4,851
-6000 -6,240
-7000
-5,907 -6,549
-6,576 -7,443
-8000 areas
32
Self Employment Rate
Number of People
Figure 4-9 : The Region’s Self Employment Deficit By Age Band and the Next Generation Future
The upper chart shows the age distribution in the North West (green bars) and the self-employment rate in each age group (orange line). The lower chart shows each age group’s contribution to the Region’s selfemployment gap (i.e. it shows the gap between the actual number of self-employed in the North West and the level the Region would have, if the Region achieved national rates in each age group.
Global Entrepreneurship Monitor 2004. Based on a national survey of 25,000 respondents of which 3,000 are North West based.
Ref: A/00163 Page 77
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills
How Important is Inward Investment and how does the North West Fare in Relation to it? 4.33
In addition to new business start-ups and the performance of existing firms in the region, the other source of potential economic growth is inward investment, particularly from the USA. Historically, the region has been an important beneficiary of inward investment and several key manufacturers (including for instance Ford, Vauxhall, Heinz) and major service sectors firms (MBNA) have US parent companies. Past inward investment has been significant in this region which has a high share of foreign owned companies, particularly US owned. The US has continued to be by far the largest source of inward investment into the region. Much of this investment is highly embedded in the region and we have been fortunate that there has not been much evidence of past inward investment becoming closures.
4.34
The region has been less successful in attracting Japanese and Far Eastern inward investment, although in many ways this has been a blessing in disguise due to the considerable job loses and closures associated with some of these past inward investments in other regions (such as the North East).
4.35
Interestingly, the data on foreign ownership of manufacturing plants shows that less of the region’s manufacturing investment and output is accounted for by foreign owned plants than in most other regions and is well below the England average. The £4.75bn of manufacturing GVA in foreign owned firms in 2002 was 32% of the total compared to 40% for England33 and it was lower in only two regions (East Midlands and Eastern). Similarly, in the service sector, foreign owned firms accounted for £4.57bn of GVA or 13% of the total (compared to 19% in England and it was lower in only two regions – Yorkshire and the Humber and East Midlands.
4.36
Some work carried out by the DTI and the WDA has indicated that in the past that foreign owned firms tend to perform better than UK owned firms, so the low levels of foreign ownership of industries may not be a positive factor in the region.
4.37
After a period of decline brought on by the post 9/11 global downturn, world FDI34 flows are beginning to recover. Factors including increasing macroeconomic growth rates, stable interest rates, and healthy levels of corporate profitability indicate that this recovery is likely to continue over the coming years. The UK is likely to benefit from this increased FDI activity. The UK has played host to the second largest amount of FDI in the European Union over the past decade, and in a recent survey of Investment Promotion Agencies, the UK is predicted to be the second most important host for FDI, after the US.
4.38
Although the North West secured fewer projects than some other regions, particularly London and the South East, the number of jobs created and safeguarded by these investment projects has been much greater than in any other English region. The total number of associated jobs secured was 9,800 in 2002/3 and 12,700 in 2003/4, 26% and 29% of the England totals, respectively (see Table A4.6 in Appendix A). Certainly in recent years the region has attracted an above average share of all inward investment jobs into the UK although we have no evidence of the quality of the jobs. In the light of the positive global environment, there is every reason to expect that the North West will continue to be wellplaced in attracting certain types of inward investment.
33
Source: DTI Regional Competitiveness Indicators, 2004.
34
FDI is foreign direct investment – the term widely used for inward investment from aboard
Ref: A/00163 Page 78
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills 4.39
The US continues to be the largest source of FDI at a global and national level. Surveys indicate that this is likely to remain the case in the next few years. Other European countries, including France, Germany and the Netherlands, are also important outward investors. Recently, however, China has been emerging as a source of FDI, and is expected to be the fifth most important source in the next few years, at a global level. These trends have been reflected in the North West: the US is by far the most significant foreign investor in the region, although the second largest source of inward investment has been companies from other UK regions.
4.40
At a global level, the sectoral composition of investments has been changing in line with global structural shifts in production. The share of manufacturing investment has been falling over the past decade, while service sector investments have been increasing in significance. This trend is predicted to continue. Manufacturing projects have been especially in decline in the developed world, since the opening up of low cost developing countries has been creating efficiency saving opportunities for mobile investors.
4.41
The role of the service sector in inward investment in the North West is likely to increase. This has implications for the type of land and property that the region must seek to offer. Within the service sector, call centres and shared service centres have been important recent growth areas. Liverpool and Manchester have hosted most of these projects, driven by their suitable labour and property supply. Prospects for both sectors are good, although the current lack of suitable office space may be a constraint. Greater Manchester and Greater Merseyside have absorbed the majority of inward investment in recent years (see Tables A4.9 and A4.10 in Appendix A). Within these sub-regions, the core cities of Manchester and Liverpool have performed the best overall. With continued growth in the service sector, these areas will continue to be central to the North West offer.
4.42
The fact that the region has managed to secure a large number of projects that are expansions by existing investors indicates that the region appears to be doing well in its after care services for investors. A significant number of new investments have also been secured, which is also encouraging.
What is the Pattern of Skills and Qualifications across the Region and how well does this match Business Needs? Skills Supply Issues 4.43
The report has already mentioned the stark skills gap that exists in the region – at least as proxied by qualification levels. What does the available evidence tell us? Figure 4-10 shows relative qualification levels of the region emphasising the gap at either end of the spectrum. The region has slightly higher proportion of people qualified to NVQ L2 and with trade apprenticeships than England as a whole.
4.44
There have been significant changes in qualification levels at a regional level in the North West with progress being made at all levels. As Figure 4-11 shows the most rapid progress has been at NVQ level 4 plus (the 3.5% points rise over the period is equivalent to around an additional 35,000 people with graduate level qualifications). The rate of reduction in people of working age with no or very low level qualifications has slightly lagged that of England over the period. The main reason for the changes over this period is the cohort effect (as younger people tend to be better qualified than older people retiring from the workforce).
Ref: A/00163 Page 79
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills Figure 4-10: Comparison of Qualification Levels Between the North West and England, 2003/4 W orking Age Population by Highest Qualification, 2003/4
25
North West
25.0
23.1
England
20
17.7 16.3
15
14.8
14.7
15.3
14.9
14.6
14.8
10 9.0
O therQ uals
N VQ1
N VQ2
Trade
N VQ3
N VQ4+
0
6.4
6.2
N oQ uals
7.1
5
A pprenticeships
percentageof all of w orkiongage
30
Source: Local Labour Force Survey, 2003/4
Figure 4-11: Changes in Qualification Levels Between the North West and England, 2003/4 (people of working age)
4
percentagepointschange
3
Change in Proportions with Highest Equivalent Qualifications Levels, 1999/00 to 2003/4 3. 5
North West
2. 6 1. 9
2
England
2.0 1. 2
1
0.7
0
Level 4+
Level 3
Level 2
-1
Level 1 -0. 8
No Quals.
-1.0 -1.4 -1.7
-2
Source: Local Labour Force Survey, 2003/4 and 1999/00 Note: does not show data for other qualifications and trade qualifications, these fell by 4.4% in the North West and 2.6% in England over this period
Ref: A/00163 Page 80
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills
Figure 4-12: Highest Equivalent Qualification Levels by Age, 2003/4 (people of working age)
% of Working Age with No Qualifications 30
North West
percentage
25
27.1
England
23.6
20 17.3
15 10
14.6 12.5
12.1
10.4
8.8
8.3
5
10.0
0 20-24
25-29
30-39
40-49
50-retirement age
Age Band
% of Working Age with NVQ 4 or better Qualification North West
40 35
percentage
32.2 28.3
25 20
England
35.4
30
20.0
29.5 25.9
27.9 21.3
20.7
23.4
15 10 5 0 20-24
25-29
30-39
40-49
50-retirement age
Age Band Source: Local Labour Force Survey, 2003/4 Note: does not show data for other qualifications and trade qualifications, these fell by 4.4% in the North West and 2.6% in England over this period
Skills Demand Forecasts 4.45
The demand for skills in the region is the product of national or even international drivers as they impact on the region’s economy. This report draws on detailed work carried out for the regional skills partnership (Business Skills North West) in 2004 in preparing a regional Skill Stocktake35. Future forecasts of skills demand in the region are also propelled by national trends in sectors, occupations and generic skill needs. These all apply to the region.
4.46
The modest forecast net growth masks profound changes in the nature of skills demanded as a result of sectoral and occupational changes. Demand comes from two sources: expansion as a result of net employment growth (or decline) and replacement, as a result of the need to fill vacancies left by people retiring from sectors/occupations or moving into new occupations. For most occupations and sectors replacement demand dominates expansion demand. The main elements of “turbulence” are as follows:
35
The Regional Skills Stocktake, 2004 was completed for the Regional Skills Partnership (Business Skills North West) and is available from the NWDA or the Learning and Skills Council in the region
Ref: A/00163 Page 81
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills • Sectors: continued net fall in employment in engineering, construction and most manufacturing sectors and strong growth in finance/professional, education, retail, health/social and digital. Two of the top 5 sectors are essentially public service sectors. However, these net changes are overshadowed by replacement demand. • Occupations/Levels: the combined effect of expansion and replacement demand can best be seen in Figure 4-13. In the future, Skill Level 4 occupations (broadly NVQ Level 4/degree level) will account for the majority of net growth in the region. However, Skill Levels 2 and particularly 3 will account for the bulk of overall demand.
Figure 4-13: Forecast Employment Demand, North West 2004-2010, (000s of jobs) Occupation
Expansion
Replacement
Total
Level 1
-75
+101
+26
2
-43
+577
+535
3
+45
+1,065
+1,110
4
+139
+443
+582
• Generic skills: finally, drawn from Source: Working Futures; Regeneris analysis national survey work we can be confident that there will be continued growth in the need for many generic skills such as communication skills (within teams and with customers), technical/ICT skills, planning and organisation skills, problem solving, as well as basic numeracy and literacy skills. 4.47
The work carried out for the recent Regional Skills Stocktake included a look at detailed sectoral and occupational demand for skills in the future. This work distinguished between net (due to overall employment change) and replacement demand growth. The results of this analysis are summarised in Figure 4-14. There is a very significant contrast in the demands driven by net as opposed to replacement demand. …the future growth of the workforce depends much on retirement and activity patterns of older workers and changing numbers of younger workers..
4.48
Only modest growth in the region’s working age population is forecast for the next 6 years. However, this growth is entirely due to a large increase in the numbers of those aged 60-65. Excluding this age group, the working age population could fall over this period.
Ref: A/00163 Page 82
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills
Figure 4-14: North West Occupation Demand Forecasts, by Sector (highest increases only), 2004-2010 Replacement Demand 6 yr change
Sector
Net Employment Growth 6 yr change
Per annum
Per annum
Cross Cutting*
338,200
56,400
Finance & Professional
50,200
8,400
Retail
309,300
51,600
Education
44,600
7,400
Education
220,300
36,700
Retail
33,400
5,600
Health & Social Care
213,200
35,500
Health & Social Care
32,800
5,500
Tourism
211,600
35,300
Digital industries
20,200
3,400
Finance & Professional
162,200
27,000
11,900
1,900
Public Administration
114,000
19,000
Sport
10,800
1,800
Construction
111,600
18,600
Bio-Technology
4,900
800
Food & Drink
85,100
14,200
Other Services
3,000
500
Logistics
62,500
10,400
Food & Drink
-9,000
-1,500
Land Based
61,600
10,300
Automotive
-14,500
-2,400
Textiles
-18,800
-3,100
-20,300
-3,400
Creative
Engineering
60,700
10,100
Other Services
55,000
9,200
Construction
-26,300
-4,400
-30,500
-5,000
Automotive
43,100
7,200
Cross Cutting*
Creative
36,700
6,100
Engineering
Source: Working Futures 2004, Regeneris Consulting analysis Note: the Cross Cutting “sector” is made up of Basic occupations (Cleaners, domestics; HGV drivers etc); Administrative Occupations (General Office Assistants; PAs and other secretaries; Receptionists etc); certain Management Occupations (Customer care managers; Storage and warehouse managers); Finance Occupations (Accounts wages clerk, bookkeeper; Credit controllers etc) and IT Support Occupations (IT operations technicians; Database assistants and clerks etc). Some of these occupations are also covered in the other sectors listed, any duplication has been removed and cross cutting occupations are only counted in the “Cross Cutting sector” figures.
4.49
Applying current economic activity rates by age (which fall off amongst the 50 year olds and drop even more sharply amongst 60 year olds) to future demographic trends, suggests that the effective workforce potentially available to employers in the region is likely to be static or declining over the next 5-10 years. Much depends therefore on decisions about retirement amongst those approaching 55 to 60.
4.50
Whatever happens it is the case that overall the workforce is becoming older on average. A number of sectors are notable for having much older workforces (agriculture, construction, education, health/social work), due to falling employment levels or difficulties recruiting sufficient numbers of younger people. These sectors will be faced by a high replacement demand for workers, even those which are experiencing declining overall employment levels
4.51
There will also be a reduction in the number of younger people entering the labour market (whether from school/college or higher education). The region is forecast to see a 13% reduction in the number of 15-19 year olds between 2005 and 2015 or 60,000 fewer people of this age. Most of this reduction will take place from 2010 onwards. Employers who traditionally recruit (and train) younger people will be faced by a much tighter labour market in the future.
Ref: A/00163 Page 83
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills …future skills needs at higher levels may not be met by current supply trends…. 4.52
Some employment forecasts38 indicate a substantial increase in Level 4 employment (not quite the same thing as NVQ level 4 qualifications but broadly comparable) of the order of 140,000 net additional jobs 2004 to 2010 (around 25,000 a year) in the North West. Can and will the growth be met by an increase in skills and qualifications?
4.53
The trend increase in higher skills needs would be substantially boosted under the Higher Productivity Scenario. We have examined the potential consequences of the regional enhanced productivity scenario on the region’s occupational structure, focussing on the 10 years to 2015 as this is the period to which Experian forecast regional occupational structure. The chart below shows the impact on the demand for skills by broad category under three circumstances over the next 10 years: first, the longer term trends scenario; second, the productivity transformation scenario, but with the current expected industrial/occupation mix in 2015; third, with the application of the overall UK industrial/occupation mix in 2015. The impacts for each broad occupation are additive i.e. the overall effect is the combination of all three impacts. Figure 4-15: Sensitivity of Change in Occupational Structure to Scenario Change in T otal Employment by Occupation, 2005 to 2015 104 64
0
-1
18
17
29
30
61
49 23
14 -3
-26
Adm in a nd s ecre taria l
Asso ciat e pr ofes sion als
Prof essio nals
-150
Man age rs
-50 -100
79
37
-15
Skil led Trad es
000s
50
-46
-36 -97
-18
Ope rativ es
100
Pers ona l ser vice s
150
-46
Growth Under Longer T erm T rends Scenario Impact of Changed Industrial Structure of Higher Productivity Scenario Impact of Applying UK Occupational Structure
Source: analysis by Experian and Regeneris Consulting
4.54
38 40
As can be seen, the biggest impact is that of applying the UK occupational instead of the forecast North West structure in 2015. The implied skills shift, if our occupational structure were to change as our productivity improves and approaches UK levels, are very considerable.
Working Futures for DfES These five districts account for around 250,000 (26%) out of the 940,000 people of working age with higher level qualifications (local Labour Force Survey, 2003/4)
Ref: A/00163 Page 84
North West Economic Baseline: Final Full Report – Business Competitiveness and Skills 4.55
At present our “gap” in number of working age adults with these qualification levels compared to the national average is around 80,000. There is a cohort led trend increase in Level 4 qualifications held by the region’s workforce. Each year the retiring year is replaced by an inflow of young people who are much more likely to have a degree level qualification. These cohort effects will not on their own be enough to lead to the increase in Level 4 occupations required, implying the need for upgrading of skills amongst those currently employed. There is also the issue of the location of skills. Figure 4-16 shows how the proportion of the workforce with higher level skills is distributed. However, in absolute numbers the five main districts with the highest number residents with NVQ Level 4 and equivalent qualifications or higher are Manchester, Stockport, Liverpool, Wirral, Trafford40.
Figure 4-16: Proportion of Working Age adults with NVQ4 or higher or Equivalent Qualifications by District, 2003/4
Source: Admin Map 2005, Nomis Labour Force Survey 2003/04 © Crown Copyright
Ref: A/00163 Page 85
North West Economic Baseline: Final Full Report – Regeneration and Worklessness
5.
Tackling Regeneration, Social Exclusion and Worklessness Key Issues for the RES • The recent employment growth has provided an excellent opportunity (through the creation of many lower skilled and part-time jobs) to enable those from the region’s deprived communities seeking jobs to access employment. But the success is mixed – the growth has had limited impact on some communities and groups (see paragraphs 5.2-5.10) – and points to the complex relationship between deprivation and worklessness, but also the need for more targeted action. Future employment growth will provide further opportunities to tackle worklessness, as it will continue to be heavily concentrated in close proximity to areas of high worklessness. • The region continues to have a well above average share of regeneration and social exclusion problems (see paragraphs 5.11 to 5.27). Despite the considerable efforts to tackle these problems, they remain heavily concentrated within the region, both spatially and by particular groups. This remains a significant constraint on the ability of the region to raise economic performance (for example, the lower employment rate for the North West, which is in part a function of deprivation and social exclusion, accounts for £3.1bn of the region’s £13.6bn output gap). • The presence of potential and actual “sink” neighbourhoods and low housing demand is a major issue for the region. Employment growth is expected to continue over the next decade and is likely to be concentrated in the North West’s City Regions. The investment which is currently being made in the low demand and other ‘at risk’ areas (alongside support to get people into work) is vital to reversing the trend of depopulation in these areas. However, the employment prospects in some parts of the region which are experiencing housing failure remain poor (such as East Lancashire) and this will impact upon the ability to tackle low demand issues. • There remain major challenges for the region’s rural areas, although the picture is by no means uniform across the region. The remoter rural areas, such as Cumbria, have poorer economic prospects in general in part due to economic restructuring but also the issue of accessibility to markets and labour. However, the more accessible rural areas on the urban fringe have faired much better, in part as a consequence of in-migration. The challenge in these areas is one of managing economic growth in a sustainable way
Introduction 5.1
This section examines social exclusion, worklessness and regeneration challenges faced by the region. It demonstrates that whilst the region has made some progress in tackling these issues, the challenges remain considerable. The analysis covers: •
The concentration of worklessness and its link to social exclusion;
•
The nature, scale and incidence of deprivation;
• The quality of life (or ‘liveability’) offered by the region’s towns and cities and the extent to which they still face problems of decline and decay; • The nature of housing markets within the region, in particular the incidence of housing at risk and its affordability; and
Ref: A/00163 Page 86
North West Economic Baseline: Final Full Report – Regeneration and Worklessness • The performance and prospects of the North West’s rural areas and the challenges this presents for the region.
Worklessness and Social Exclusion There is a strong link between social exclusion and worklessness… 5.2
We note later in this section that the spatial concentration of deprivation and social exclusion is a feature of the North West (see paragraph 5.11). A key aspect of this deprivation is the spatial concentration of worklessness, which needlessness to say is a major contributory factor to deprivation41. There is a strong correlation between worklessness at a district level and other aspects of deprivation, such as crime, health and environment and housing. The legacy of industrial decline and subsequent job loss and worklessness has been at the root of many of the problems which these communities face.
5.3
The factors which explain low levels of labour market participation vary and include low skill levels, health issues, caring responsibilities and ethnicity, which tends to be highly concentrated in the region’s more deprived communities (a number of charts, which present the variations in employment rates by group, are presented in Appendix A): • Three fifths (60%) of the economically inactive in the region have no qualification (56% across England as a whole), which compares to a little more than a quarter (27% for the NW and 26% for England as a whole) of those who are economically active. • Although employment and economic activity rates are lower for women than men, those for women are closer to the comparative England average (1% below compared to 3% for men). Also the male economic inactivity rate has been increasing in recent years in the North West, particularly amongst older males. • Disabled people in the North West have employment rates well below the national average for this group; in 2003, 28.4% of all disabled people of working age were employed, as compared with 33.7% in England as a whole. • The Census of Population 2001 points to an employment rate of 48% amongst lone parents compared to 50% in England, although improvements in maternity leave and pay have been associated with higher employment rates for females in recent years; • Employment rates for all ethnic groups in the region (including white residents) are below national rates, although there are marked differences in employment rates across ethnic groups. People of Asian origin had the lowest employment rate (40% compared to 48% for England as a whole and 59% for white people in the North West), whilst within this group those of Pakistani or Bangladeshi origin account for by far the lowest levels of economic participation of any ethnic group in the North West (and these ethnic groups are particularly concentrated in Greater Manchester and Lancashire). • There are considerable variations in economic activity rates by age, the North West has above average concentrations on economic inactivity relative to the national rates in the very youngest (16-19 year olds, especially women) and then in older workers (over 50 years olds, especially men). The gap on the England average in the economic activity rate amongst
41
A study by the Social Exclusion Unit explores this relationship in detail (Jobs and Enterprise in Deprived Areas, Social Exclusion Unit, September 2004)
Ref: A/00163 Page 87
North West Economic Baseline: Final Full Report – Regeneration and Worklessness 16-19 year olds is 5.5%, with an 8.4% gap among females in this age group. The gap among 50+ year olds is 7.0%, with a 7.8% gap among males.42 5.4
5.5
The analysis presented above highlights aspects of the labour market inequalities faced by groups across the North West. A study published by the NWRA43 confirms these findings – it points to concentration of low participation and employment rates, poor qualifications and earnings, and generally poor career prospects amongst particular groups. The study also highlights the particular difficulties faced by groups which are not highlighted above, including: ¾
Young people: the analysis highlighted the challenges faced by younger age groups, in particular associated with the transition into work and development of skills. Too many young people drop out at this stage and can find the transition back very difficult.
¾
Black and minority ethnic women: BME women can face the combined racial and gender barriers to education, work and career development.
¾
Lesbian, gay, bisexual and transgendered groups: whilst there is limited data available on these groups, the Census suggests that the greatest concentrations of same sex couple households are located in Manchester and Blackpool. A survey undertaken in Manchester44 found that two thirds of the sample had experienced some form of discrimination at work due to their sexual orientation, including dismissal from employment and diminished career prospects.
Although the employment rate is now only slightly lower than that of the England average (giving a gap of around 80,000 people), the England average is of course held down by many areas of high worklessness in the North West and other regions. It is interesting to compare the region with the best performing region (the South East). The latest data for 2003/4 suggests that the region’s employment rate was about 8% below that of the South East45, this equates to a rather larger gap of around 270,000 jobs. The gap in employment is highly concentrated in a few areas. Taking account of resident students who are concentrated in our two main cities, six local authority areas stand out as having particular concentrations of worklessness with around 70,000 of the gap compared to England (Manchester, Salford, Liverpool, Knowsley, Halton, and Barrow) whilst just two of these (Manchester and Liverpool) account for over 40,000 of the gap. …although there are some welcome signs of improvement…
5.6
The sustained period of employment growth which the region has experienced over the past four to five years has, we believe, played an important part in reducing worklessness. Between 1999 and 2003 the numbers of employees in employment grew by 150,000 in the region (a 5.3% increase). A key issue for the region is the extent to which the workless residents have been able to access the jobs which have been created (as opposed to the additional demand being met by in-migrants, for example).
42
Labour Force Survey, 2003-4.
43
Measuring the Economic Contribution of Equalities Communities in the North West, NWRA, October 2004
44
Employment Discrimination Against Lesbians, Gay Men, Bisexual and Trangendered, Lesbian and Gay Network for Manchester, December 2003
45
72.8% compared to 78.9% in 2003/4 all in employment as a % of working age (Source: Labour Force Survey) Ref: A/00163 Page 88
North West Economic Baseline: Final Full Report – Regeneration and Worklessness 5.7
In general terms the signs are positive as the growth in employment has been accompanied by falls in worklessness: • The level of economic inactivity has fallen between 1999/00 and 2003/00 in the region (the fall of 1 percentage point is equivalent to around 46,000 people) and is one of the few regions which have secured a decline in economic inactivity (along with eastern region). This decline is accounted by the fall in female inactivity (a fall of two percentage points), whilst male inactivity has actually risen (by one percentage point). The analysis of employment change (presented in Appendix B) suggests that this is partly a consequence of the nature of jobs which are being created (many in the retail and personnel services sector and often on a part time basis). • The number of people claiming the Job Seekers Allowance has declined by 42% (69,000) between 1999 and 2003 (compared to a 37% reduction for England). • Whilst the numbers of people claiming Incapacity Benefit has fallen (by -0.5% or 1,800), the decline has been modest and from a historically high level. But, as noted above, the North West was the only English region to experience a decline in the number of IB claimants over this period. Consultations with Job Centre Plus suggest that although this group is skewed towards higher age groups, there is a significant proportion that are aged under 50 and an increasing number amongst much younger age groups (there is limited data available publicly to support this).
5.8
An examination of employment growth and the changes in worklessness in the region’s more deprived districts paints a complex picture (see Table 5-1): • Overall, the 19 most deprived districts have accounted for half of the employment growth in the region, half of the fall in economic inactivity (50%), but proportionately far more of the fall in IB and JSA claimants (87% and 68% respectively). But despite this strong employment growth, the decline in worklessness in these communities has been relatively modest when judged against the scale of the problem (a less than 1% reduction in IB claiming and 27% reduction in JSA claiming). • Some of the most deprived districts have been particularly successful in generating net employment growth in recent years including Manchester, Liverpool, Knowsley, Salford and St Helens, whilst others have been far less successful such as Blackpool, Oldham and Wirral. • Of those districts which have experienced strongest employment growth, the extent to which this has been reflected in reduced worklessness has varied widely. For example, Manchester and Salford have collectively created 26,000 jobs (+5.8%), whilst economic inactivity grew by 10,000 (+2.2%), and IB and JSA claimants fell by just 370 (-0.9%) and 3,400 (-17%) respectively. On the other hand, Liverpool and Knowsley have collectively created 20,000 jobs (+14%), with inactivity falling by 2,000 (-5.9%) and IB and JSA declining by 1,000 (-1.8%) and 7,400 (-32.4%) respectively. These distinct patterns reflect to a large degree the differing types of employment being created and the accessibility of the local labour markets. We believe that Manchester has been more successful in creating high level jobs and these are accessed from a wider geographical area (again, more detail is provided in the employment analysis contained within Appendix B). But in addition, the on-going investment by the Objective One programme on Merseyside in work readiness and skills measures may well have prepared the workless for entry into the new jobs which have been created.
Ref: A/00163 Page 89
North West Economic Baseline: Final Full Report – Regeneration and Worklessness • Some areas with high levels of deprivation and worklessness, such as Wirral and Burnley, have not been successful in creating jobs, but due to their proximity to employment growth areas such as Manchester, Liverpool and Chester have been able to secure significant reductions in worklessness. On the other hand, whilst Barrow has had some employment growth it does not appear to have made significant inroads to tackling worklessness. Table 5-1 Employment change and Worklessness in 19 Most Deprived Districts (IMD) Employment change 199903 (000s) No % Manchester 21.6 8% Knowsley 10.3 23% Rochdale 9.8 14% Liverpool 9.7 5% St Helens 8.2 15% Wigan 4.9 5% Tameside 4.3 6% Salford 4.2 4% Halton 2.6 5% Barrow 2.6 12% Blackburn 2.4 4% Pendle 2.0 7% Hyndburn 1.5 5% Copeland 1.5 6% Bolton -0.3 0% Burnley -1.0 -3% Wirral -1.2 -1% Oldham -2.1 -3% Blackpool -4.3 -7% Sub-total 76.7 6% NW Total 150.3 % of NW 51.1 Total % Source: ABI; NOMIS
5.9
Economic Inactivity Change 1999-03 (000s) No % 9.0 2% -4.0 -13% 0.0 -3% 2.0 1% 1.0 4% -6.0 -12% -1.0 -2% 1.0 -2% 0.0 -6% 2.0 22% 4.0 18% 1.0 14% 0.0 0% -4.0 -22% 0.0 -1% -2.0 -19% -10.0 -21% -2.0 -4% -1.0 -12% -10.0 -3% -20.0 50%
IB Claimant Change 2001-03 (000s) No % -0.2 -1% -0.2 -2% -0.1 0% -0.8 -2% -0.6 -5% -0.8 -3% 0.1 1% -0.2 -1% -0.1 -1% 0.1 1% 0.2 3% 0.1 3% 0.1 2% 0.2 5% 0.4 3% 0.0 -1% -0.1 0% -0.1 -1% 0.3 3% -1.6 0% -1.8 87%
JSA Claimant Change 1999-03 (000s) No % -2.7 -18% -2.2 -38% -1.1 -25% -5.2 -27% -1.2 -27% -1.3 -23% -0.9 -24% -0.7 -16% -1.1 -32% -0.5 -31% -1.3 -38% -0.4 -33% -0.1 -9% -0.6 -32% -1.2 -26% -0.3 -27% -3.4 -37% -1.1 -26% -0.8 -22% -26.0 -27% -38.4 68%
The analysis raises the issue of employment accessibility and the match between the location and types of jobs which are being created and the ability of the workless in the region’s more deprived communities to access these jobs. Net employment is forecast to continue to grow in the next few years, albeit more modestly. The base forecasts prepared by Experian (which are based upon a continuation of historic trends and relative performance) show that total employment in the region will increase by 2.4% to 3.36m. Although it is difficult to predict what are likely to be the major hotspots of future employment growth in and around the region, we believe it to be most likely that the following will be prominent or growing in importance: • City Regions – the city regions (or at least parts of them, including Manchester, Liverpool and Preston and their immediate hinterlands) are likely to continue to act as major regional and sub-regional engines of employment growth and opportunity; • Warrington – assuming it proceeds as scheduled the development of Phase 1 of Omega (Omega South) is likely to lead to substantial employment growth;
Ref: A/00163 Page 90
North West Economic Baseline: Final Full Report – Regeneration and Worklessness • Chester, Deeside and other parts of Flintshire – Chester and Deeside are already major employment locations and have proved to be particularly attractive to investors (major proposals for development/ redevelopment in Deeside and elsewhere in Flintshire will result in a substantial additional increase in demand for labour); • The Region’s main airports – in particular the areas surrounding Manchester and Liverpool airports. 5.10
Clearly, these areas are in close proximity to large concentrations of the region’s workless and this in particular highlights the need to consider transport and travel alongside other potential barriers to employment. To varying degrees, there is a need for action around actual and perceived transport, as well as skills, aptitudes and attitudes, and financial issues. Our consultations suggest that the level of IB payments can also create financial barriers to claimants returning to work.
5.11
Whilst the region’s recent strong employment growth has helped to reduce the scale of worklessness, partners face a major challenge in their efforts to tackle the problems of persistent worklessness in general, and in particular its concentration in more deprived communities. As shows, in practice the region has different areas facing different challenges: • First, areas such as Manchester, Knowsley and Liverpool which have seen strong employment growth (in absolute terms) yet large and persistent problems of worklessness and deprivation persist in these areas; • Second, areas of high deprivation close to areas of stronger employment growth (e.g. Halton, Wirral, parts of north Greater Manchester); • Third, areas of deprivation where employment performance has been poorer and which are relatively isolated from areas of growth (Barrow, Blackpool and East Lancashire); • Fourth, areas of strong employment growth which are not themselves area of significant deprivation, but could, potentially, be accessible to areas of regeneration need (e.g. Chester, Warrington).
5.12
The scenario and sensitivity analysis undertaken by Regeneris Consulting and Experian examined the economic impact for the region of an improvement in the employment rate in the 6 local authority districts with the lowest employment rates to the regional average. The key points are highlighted in the summary box opposite.
Sensitivity of Raising the Current Employment Rate in the 6 Worst Local Authority Districts to the Current North West Average Raising the employment rate by this amount would increase the overall employment rate by 1.2% points (54,000 people) and largely close the 1.5% points gap with the national average in the short term. The longer term modelling suggests that as well as increasing employment (by well above the rather pessimistic view of the long term trends scenario of just around 30,000 by 2025), the effect of increasing employment would be to boost regional GVA by around £1.7bn (in 2001 prices) or by 1.1% in 2025 Source: analysis by Experian and Regeneris Consulting Note: the six districts are Liverpool, Manchester, Knowsley, Salford, Halton, Barrow-in-Furness
Ref: A/00163 Page 91
North West Economic Baseline: Final Full Report – Regeneration and Worklessness
Figure 5-1: Relationship between recent Growth in Employees in Employment (20002003) and Areas of Need (Index of Deprivation, 2004)
Sources: Admin Map 2005; ODPM IMD 2004; Annual Business Inquiry © Crown Copyright Notes: Deprivation is based on rank in England of the local authorities (0-10% means in the top 10% most deprived areas in England) Shadings represent extent of absolute employment growth: • Heavy hatchings are areas where employment growth has exceeded 10,000 • Vertical lines are areas where employment growth has been between 5,000 and 10,000 jobs • The dotted area are where employment growth has been between 2,500 and 5,000 jobs
Nature and Scale of Deprivation The region continues to have a well above average share of regeneration and social exclusion problems… 5.13
The available evidence confirms that physical decay and social exclusion remain major problems within the North West, although there is evidence of an improvement in recent years. The Index of Multiple Deprivation, despite the constraints of using a composite index,
Ref: A/00163 Page 92
North West Economic Baseline: Final Full Report – Regeneration and Worklessness provides a usual measure of the scale, nature and concentration of deprivation across England (we have also examined contributory factors below). 5.14
The Index of Multiple Deprivation 2004 (IMD 2004) indicates that 9 districts (a fifth of NW districts) in the North West are ranked in the 10% most deprived districts in England, whilst 19 are ranked in the 20% most deprived (44% of all districts in the region) This is worse than for most other regions in England. Whilst the analysis of the root causes of deprivation, presented later in this chapter, points to a complex picture across the region, it also highlights the poor performance of some parts of the region on a wide range of criteria. An analysis of IMD 2004 using so-called “super output areas” clearly shows the concentration of the most deprived communities in particular parts of the region (although this is by no means unique to this region) – Greater Manchester and Merseyside, and to a lesser extent in parts of East Lancashire and the coastal towns in Lancashire, and West Cumbria (see ). The region has 28% of the 10% the most deprived super output areas in England and 22% of the worst 20%. These most deprived communities are heavily concentrated in the region’s urban conurbations.
5.15
Although deprivation is often masked in the official statistics for the region’s rural communities, it is also a major issue in many of these areas. In parts of the region, residents who live in rural areas and commute to work in urban areas tend to push up measures such as earnings and skills. However, the wage rates and incomes of those relying on rural employment are often poor. The fact that it occurs in smaller ‘pockets’ raises issues around the ability to target assistance effectively upon those who most need it.
5.16
But what are the characteristics of deprivation within the region and why is it so concentrated within many of the region’s communities? The nature and pattern of deprivation within the region is closely linked to industrial decline in many of the region’s traditional employment bases, with the consequent loss of large numbers of jobs. This resulted in high levels of worklessness, poverty and ill health, as well as large areas of dereliction and decay. The geographical concentration of deprivation in particular locations closely mirrors the spatial pattern of industrial decline.
5.17
We present below an overview of a selection of indicators for the contributory factors of deprivation and social exclusion (the analysis is not intended to be comprehensive). These indicators include economic activity, education and skills, health, crime and housing. Around 23% of all people aged 16 to 59/64 (or 36% of all people aged 16 to 74) in the North West are currently economically inactive (compared to 22% for England as a whole) – that is, 1.7 million people aged 16 to 74 in the region who are not engaged in the labour market. However, this varies widely across the region – the highest rates are experienced in the core cities (Liverpool and Manchester have rates of 45% and 44% respectively) and the former industrial heartlands (Blackburn and Barrow both have rates of 39%), whilst the incidence of inactivity is lowest in the regions rural or rural fringe areas such as South Ribble and Eden (30% respectively). (Table A5.1 in Appendix A presents the economic activity rates by district).
5.18
Other key points are: ¾
Male economic inactivity in the region is much higher relative to the England average (+3 percentage points difference) than for females (+1 percentage point) – see Figure 5-3.
¾
The extent to which people are inactive due to sickness or disability is far greater in the North West: 7.7% of the working age population in the North West are inactive
Ref: A/00163 Page 93
North West Economic Baseline: Final Full Report – Regeneration and Worklessness for this reason, compared with 5.3% in England as a whole. The key concentrations are in Greater Manchester (139,000) and Merseyside (106,000), and to a slightly lesser extent in Lancashire (73,000). ¾
Also, fewer of the economically inactive in the North West actually want to gain a job in the foreseeable future (80% do not want a job, compared to 74% for England).
¾
The economically inactive are spread across the region, but concentrated within the main urban centres such as Manchester, Salford, Bolton, Liverpool, Wigan, St Helens, Sefton, Oldham and Rochdale. But there are also significant concentrations outside of these areas, including places such as the Wirral and Blackpool. Figure 5-2: North West IMD by Super Output Area, 2004
Source: Admin Map 2004; ODPM 2004 © Crown Copyright
Ref: A/00163 Page 94
North West Economic Baseline: Final Full Report – Regeneration and Worklessness
Figure 5-3 Economic Inactivity of Working Age Population of the English Regions, 2003/4 35% 30%
26%
25% percentage
33%
31%
28% 25%
23%
22%
20%
18%
28% 22%
19%
28% 22%
24%
23%
21% 19%
17%
17%
27%
26%
16%
15%
18%
14%
23% 18%
13%
13%
Eastern
South East
22% 16%
10% 5% 0% North East London
North West
East West Yorkshire Midlands and The Midlands Humber
South West
England
areas
Source: ONS Labour Force Survey © Crown Copyright
Total
Males
Females
5.19
The extent of sickness and disability as a cause of inactivity within the region is clearly illustrated by the level of Incapacity Benefit claimants (8.9% of the working age population compared to 5.9% for England as a whole). The region now accounts for 20% of Incapacity Benefit claimants in England (compared to 13.6% of its population) and has the largest number of any region (around 400,000 or 9% of the working age population - the second largest region, London, has only 280,000).
5.20
An analysis of IB claimants confirms the strong geographical concentration – the percentage of IB claimants as a proportion of the working age population exceeds 10% in 13 of the region’s 43 districts compared to the NW average of 8.9% and England average of 5.9%). The incidence of IB claiming is heavily concentrated amongst, but not restricted to, older age groups (73% are aged over 40). The North West region has slightly higher levels of lone parent families than the national average – data from the 2001 Census of Population indicates 5.1% of the working age population are lone parents compared with 4% for England (this equates to around an extra 20,000 people). Table 5-2: IB Claimants by Age Band, 2003 North West
England and Wales
No. of claimants
% of total
no. of claimants
% of total
% (England=100)
Under 30
42,995
10%
245,580
10%
97
30-39
77,635
18%
435,422
18%
98
40-49
101,705
23%
558,116
23%
101
50-59
153,270
35%
834,706
34%
101
60 and over
64,690
15%
353,032
15%
101
Age of Claimants
Source: Job Centre Plus, IAD Information Centre
5.21
Table 5-3 compares the level of qualification in the North West with that in England. The key points in terms of overall qualification rates are that the North West has a much higher rate of people with no qualifications than England and far fewer people with graduate level qualifications (NVQ level 4 and above). As noted earlier this equates to around 120,000
Ref: A/00163 Page 95
North West Economic Baseline: Final Full Report – Regeneration and Worklessness more people with no qualifications and 80,000 fewer people with graduate level skills in the working age population compared to the England average. Table 5-3 Level of Qualification for Working Age Population 2003 (%) NVQ Level:
North West
England
No Qualifications
18.9
Other Qualifications Level 1 Level 2 Level 3 Level 4+
6.5 15.0 16.1 14.3 21.4
NW less England %
no
15.4
3.5
-120,000
9.2 15.0 15.3 14.4 23.9
-2.7 0.0 0.8 -0.1 -2.5
-105,000
-14,000 +42,000 -2,000 78,000
Source: LFS; gap calculated by Regeneris
5.22
5.23
There are major variations spatially. At a subregional level Merseyside and Greater Manchester stand out in terms of the high proportion of people of working age with no qualification – 22.8% and 18.6% respectively. This compares with 14.8% for England as a whole. In turn, the incidence of people with no qualification is heavily concentrated in the more deprived areas – the region’s 19 most deprived districts (i.e. those in the top 20% of most deprived in England) have a rate of no qualification of 21%.
Figure 5-4 Proportion of Residents with No Qualification by District, 2003/04
Evidence from the British Crime Survey suggests that, for most of the indicators, crime levels are comparatively high in the North West, relative to Source: Admin Map 2005, Nomis Labour Force Survey © Crown Copyright England and Wales. The region performs particularly poorly in terms of burglary and criminal damage.
Ref: A/00163 Page 96
North West Economic Baseline: Final Full Report – Regeneration and Worklessness
Table 5-4: Crime in the North West, 2003/04 (per 1000 population) Type of Offence All recorded crime Violence against the person Robbery Burglary Theft and handling of stolen goods Theft of and from vehicles Criminal damage Drug offences
North West 121 19 2 19 42 18 29 3
England & Wales 113 18 2 16 43 17 23 3
Source: British Crime Survey, 2003/04
5.24
The scenario and sensitivity analysis undertaken by Regeneris Consulting and Experian examined the economic impact for the region of a reduction in number and proportion of the working age population holding no qualifications. The key points are highlighted in the following summary box.
Sensitivity of a Downward Shift in Number and Proportion of the Working Age Population Holding no Qualifications We have assumed that the fall in overall regional proportion to the England average is concentrated almost entirely in Greater Manchester and Greater Merseyside – where the greatest gap at present occurs. There is an offsetting increase in those with NVQ level 2 type qualifications. The effect is a switch of 120,000 adults from no to Level 2 qualifications. The assumed long run impact from Experian’s model is for a rather modest increase of £700m in GVA (0.5%) above the longer term trends scenario and around 20,000 extra jobs. The biggest proportional impact would be in Greater Merseyside (1.2%). This modelling works through the impact of changes in qualification on employability and so the expected employment rate. The interesting feature of the modelling is that the overall increase in employment predicted is far lower than the reduction in numbers with no qualification, this is because the Experian model places a relatively weak weight on the proportion with no vs. Level 2 qualifications. In practice the impact may be greater if the additional skills equating to the Level 2 qualification enable more of the region’s residents access employment. However, it is of course the case there are a multitude of other factors which explain worklessness. It is also the case that some of those with no formal qualifications (particularly older workers) will be in employment This sensitivity provides a useful reality check and reminds us of the difficulties in tackling worklessness. Source: analysis by Experian and Regeneris Consulting
5.25
The North West suffers from high levels of residents with limiting long term illnesses and a multitude of other problems - 20% of its residents are affected by such illnesses in comparison to 18% for England as a whole. Clearly, poor health amongst the working age population is strongly linked to the high number of IB claimants.
5.26
An examination of overall mortality rates indicates that whilst the North West doesn’t have the highest rates, it is nevertheless above the England average and most regions (with the exception of the North East and South West). In 2003 the rate per 1,000 population was 11, which compares to the regional extremes of 11.3 for the North East and 7.8 for London. Although the regional pattern isn’t exactly the same for infant, neonatal and perinatal mortality rates, the North West stills compares poorly. Needless to say, the statistics for the
Ref: A/00163 Page 97
North West Economic Baseline: Final Full Report – Regeneration and Worklessness region as a whole mask the concentrations of ill health in many urban areas especially in the larger cities and their immediate hinterlands. 5.27
Looking at evidence on causes of death it appear that both males and females in the north west are more likely than those in England and Wales to die of cancer or heart disease. Deaths from these causes are around 10% above those in England and Wales.
Table 5-5: Deaths from Cancer and Heart Disease by Region, 2002 (England and Wales=100) Diseases of the Cause of Death Cancer (Malignant neoplasms) circulatory system Region
Males
Females
Males
Females
England and Wales
100
100
100
100
North East
117
113
112
112
North West
110
108
112
111
Yorkshire
106
105
105
103
East Midlands
96
100
102
101
West Midlands
102
98
104
101
East
94
95
91
92
London
99
99
96
94
South East
93
94
90
93
South West
93
94
91
94
Source: ONS, Mortality Statistics.
There have been some improvements in deprivation and social exclusion across the region… 5.28
In light of the great deal of money and effort devoted to tackling these issues, to what extent have these issues been eased or alleviated? Needless to say the situation is very complex and the conclusions drawn depend upon the nature of the data examined and the time period considered. However, in general terms the situation is improving, although at a relatively slow rate. Key points include: • Economic Inactivity Rate: between 1999/0 and 2003/4 the level of economic inactivity fell 0.7 percentage points in the North West (compared to a 0.5% rise for England as a whole) and has only been outstripped by the Eastern region with a fall of 0.9% (see Figure 5-5). However, this decline has occurred through the increased participation of women, with male inactivity actually rising. The picture has varied across the sub-regions, with Merseyside and Cumbria experiencing the greatest declines (-2.3% and -2.9% respectively), whilst there was a modest increase in Greater Manchester (+0.3%). In terms of the 19 most deprived districts, the level of economic inactivity fell by an average of 0.7 percentage points, although the rate increased in 6 of these districts. Employment Rate46: Between 1999/0 and 2003/4 the employment rate increased by 3% in the North West, equivalent to an increase of 145,000 people in employment. This compares to next to no change for England (0.1% increase). Indeed, the number in
46
the employment rate is a component of the overall economic activity rate (the other element being unemployed people seeking work) which records the proportion of the working age population within in or seeking work; the economic inactivity rate records the proportion who aren’t currently in or seeking work.
Ref: A/00163 Page 98
North West Economic Baseline: Final Full Report – Regeneration and Worklessness employment increased in all of the sub-regions, with the greatest gains seen in Greater Merseyside (44,000) and Lancashire (34,000). Although Cumbria saw a small increase relative to the other sub-regions (6,000), since this was from a lower base, it represented a 3.7 percentage point increase, just below the 4% in Greater Merseyside. Figure 5-5 Change (% Point) in Economic Inactivity Rates of Working Age Population in English Regions, 1999/0 – 2003/4 3% 2.4%
3% 2%
percentage
2%
2.0% 1.9% 1.6%
1.5% 1.2%
1.1%
0.9%
1% 1%
0.6%
0.4%
-1% -1%
0.1% 0.1% -0.1%
-0.3%
0% East Midlands
Eastern
London
0.1%
1.0% 0.5%
0.4%
0.0% -0.2% -0.5%
-0.1%
North East North West South East South West -0.7%
-0.9%
1.2% 0.9%
0.6%
West Midlands
Yorkshire and The Humber
-0.1%
England
-2% -1.6%
-2%
-2.1%
-3% Source: ONS Labour Force Survey © Crown Copyright
Total
Males
Females
• Incapacity Benefit: Between 2001 and 2003 (the longest period for which data is available) the North West was the only region to experience a decline in the rate of IB claiming, albeit a modest one (-0.5% or 1,800) – see Figure 5-6. This is in stark contrast to strong growth in most other English regions. The declines have been concentrated in those districts which have experienced strong employment growth in recent years or are in close proximity to areas of employment growth (more detail is provided later). Figure 5-6 Change (%) in Incapacity Benefit Claimants in English Regions, 20012003
North West
-0.5%
North East
0.4%
Yorkshire and The Humber
2.6%
West Midlands
2.8%
East Midlands
3.2%
South East
5.1%
London
5.2%
East of England
5.3%
South West -1%
5.8%
0%
Source: ONS Neighbourhood Statistics
1%
2%
3%
4%
5%
6%
7%
percentage
• Qualification and Skills. Qualification levels are improving across the region and England. Between 1999 and 2003, the number of people with no qualifications fell by 0.2%. In terms of those with qualifications, the greatest growth has been at 3 and 4 1.4% and 1.8% respectively). However, in relative terms the data suggests that overall the region is
Ref: A/00163 Page 99
North West Economic Baseline: Final Full Report – Regeneration and Worklessness neither catching up nor slipping compared to England as a whole. Qualification levels have also been improving in the most deprived districts, with percentage point increases of 3.5% and 2.6% in the number qualified to levels NVQ4+ and NVQ3 between 1999 and 2003. The number with no qualifications fell by 1.3 percentage points in the same period. • Health. There has been a reduction in mortality rates across England, despite an aging population. The mortality rate for the North West has fallen from 11.7 per 1000 population of all ages in 1996 to 11 in 2003. The fall is the fastest of any English region with the exception of London and the South East. • Crime. Evidence from the British Crime Survey suggests that although the North West has experienced a reduction in crime levels from 2002-2003/04, crime levels remain high. The region has experienced reductions of 15.5% and 7.5% respectively in vehicle related crime and burglaries which are above the national change, but it still has the fourth highest rate amongst the English regions.
Quality of Life The region has mixed performance on quality of life indicators…. 5.29
The quality of life which the region’s residents are able to achieve is an important aspect in both attracting and retaining its workforce. As a consequence it has a direct impact upon the size and quality of the workforce available and one dimension of the region’s overall ‘productivity’.
5.30
Quality of life can be measured in various ways – ODPM have produced a guide47 to measuring quality of life and there are a number of other indices which seek to provide a means of comparison between areas and locations (in addition, there have been other similar studies, such as Vital Signs48 which was commissioned by NWDA). The ODPM report concludes that whilst the North West compares poorly on many of the indicators, there has been improvement in recent years on many of these measures (see Table 5-6 for summary). It should be noted that there are a number of shortcomings to the ODPM report for our purposes including that the data for a number of the indicators is out of date, no account is taken of cultural factors and it does not provide sub-regional analysis.
5.31
Drawing on this, we have compiled a range of indicators at a regional and sub-regional level (where they are available), covering employment, land and environment, crime, and culture (see Table 5-7). Needless to say, there is the need for caution in undertaking this type of analysis at a regional and sub-regional level - quality of life is strongly driven by the immediate environment in which people live and work and their hinterlands and these indices do not pick up these micro-locational considerations.
5.32
A number of fairly strong messages can be drawn for the region from the indicators which have been used: • The analysis confirms that the general picture for the region is mixed. It certainly fairs well in terms of its access to high quality landscapes and cultural facilities, as well as the overall affordability of housing. However, it fairs less well in terms of access to jobs, the level of crime and dereliction, and poor quality housing.
47
Regional Quality of Life Counts, ODPM, 2003
48
State of the North West Region: Vital Signs Final report 2004, NWDA, GONW and NWRA
Ref: A/00163 Page 100
North West Economic Baseline: Final Full Report – Regeneration and Worklessness • There has also been progress in regenerating the region’s main towns and cities which has helped to improve the quality of life, although there remains much to be done. Table 5-6 Summary of ODPM Quality of Life Measures for North West, 2003 • • •
The North West had the second highest manufacturing investment as a percentage of manufacturing output between 1998 and 2001 Gross Value Added (GVA) per head was below average in 2002 - the second highest increase since 1990
• •
The percentage of working age people in work is below the national average
•
Life expectancies at birth for males and females in the North West were below average
•
The percentage of children in low income households (2002-3) and working age people without qualifications (2003) were higher than the national figures
• •
The percentage of working age people living in workless households was also higher than average in 2000
•
Second highest regional levels of all burglary in 2002-3 and recorded vehicle-related thefts, robberies and burglaries were also high
- slight increase between 2000 and 2003
- decreased by more than any other region between 1996 and 2003.
•
- the region had the second largest regional reduction in vehicle crime between 1990 and 2002-3
• •
Chemical and biological river quality compare poorly
- since 1990 there has been strong improvement, with biological quality showing the greatest regional improvement along with London
•
The percentage of new homes built on previously developed land in the North West was the second highest after London.
•
The North West had the highest volume of household waste not recycled per person in 2002-3.
Source: Regional Quality of Life Counts, ODPM, 2003
• There is a strong urban and rural dimension which isn’t picked up in the data in the table. The region performs poorly on a number of indicators (for example, crime and dereliction) due to the concentration of problems in the inner cities and older industrial areas. On the other hand, the region’s rural areas tend to perform well on most quality of life indicators, with the exception of access to jobs and cultural facilities and the affordability of housing (see paragraph 5.41). • Within the region, Cheshire and Warrington performs particularly well on the basis of this particular set of indicators. This reflects a strong economic position, its areas of high environmental quality (although there are fundamental issues of dereliction land) and good access to a range of services. 5.33
What these indicators do not pick up is the changes which have been occurring in the region’s cities. As a consequence of major investment in public realm, new facilities and a new housing product, they have been successful in attracting people back into their centres to live, shop and for leisure. This has had an impact on aspects of the quality of life of people who live and work in these cities.
5.34
A Mori study commissioned by the NWDA examined residents’ perceptions of the North West and the quality of life of the place in which they live. The findings were on the whole very positive – 87% of residents were either fairly (39%) or very satisfied (48%) with the place they lived (based on a sample of 1,040 residents). This has increased from 79% in 2001. There is little difference with the average response from residents in other parts of the UK, suggesting that the perceptions of North West residents are broadly in line with those of residents elsewhere in terms of the quality of life offered by their region.
Ref: A/00163 Page 101
North West Economic Baseline: Final Full Report – Regeneration and Worklessness
Table 5-7 Selected Quality of Life Indicators
English Regions
North West SubRegions
Employment
Housing
Land & Environment
Crime
Culture
Affordability Index4
HA Land which is PDL5
% Listed Building s “At Risk”6
7.2
6.1
1173
N/A
N/A
8.5
4.2
N/A
N/A
N/A
21
3.0
6.4
2146
N/A
N/A
5.4
5.6
N/A
N/A
N/A
9.2
25
6.3
5.7
2756
N/A
N/A
15.8
15.6
N/A
N/A
N/A
67.3
11.6
23
6.0
5.7
2210
N/A
N/A
11.3
8.8
N/A
N/A
N/A
Lancashire
75.8
8.2
21
11.2
5.3
1476
N/A
N/A
8.3
7.5
N/A
N/A
N/A
North West
72.8
8.9
23
6.8
5.7
9761
6.6
61
11.2
10.1
84
5.4
7.9
North East Yorkshire & Humber West Midlands
68.5
10.0
21
6.4
5.9
3,457
8.5
83
8.2
8.4
82
5.5
4.1
73.9
6.7
23
6.8
6.0
6,264
5.3
59
7.7
11.6
86
4.5
6.2
73.4
6.4
23
5.9
6.9
5,556
5.3
68
14.2
8.7
86
4.7
6.8
East Midlands
75.3
5.6
22
4.9
6.6
5,038
4.5
69
10.3
7.8
86
4.7
7.6
Eastern
78.6
4.1
22
4
6.6
6,232
2.1
55
7.2
4.2
89
6
8.5
London
69.3
5.5
42
7.2
8.8
2,837
5.2
31
21.3
9.6
90
6.8
5.2
South East
78.9
3.6
24
3.8
7.9
8,716
2.5
57
8.7
5
90
5.7
7.4
South West
78.6
5.0
21
4.8
8.5
5,350
2.2
82
8.3
5.6
87
5.4
7.5
74.6
5.9
26
5.6
7.0
53,211
4.7
65
11.3
7.9
87
5.5
6.8
Employme nt Rate (%)1
IB % of Working Age Population
Av. Travel to Work Time (mins)2
Cumbria
76.5
7.4
21
Cheshire & Warrington
77.9
5.6
Gtr Manchester
71.8
Gtr Merseyside
England
% Unfit properties 3
Source: 1: ONS Labour Force Survey © Crown Copyright 2: ONS Regional Trends © Crown Copyright 3: ONS Neighbourhood Statistics © Crown Copyright 4: Regeneris Calculation using Data from Land Registry and ONS New Earnings Survey © Crown Copyright 5: National Landuse Database 6: GO-NW (2004) State of the North West Region: Vital Signs – Data from listed buildings = 2003; river quality = 2002; arts events = 2001
Ref: A/00163 Page 102
% River Length of “Good” Chemical Quality6
Violent Offences
Burglaries
Per 1,000 pop3
% Participating in 1 arts event in last 12 months6
No. Visits to Libraries Per 1,000 pop3
Av. Time Spent on Sport Activities2
North West Economic Baseline: Final Full Report – Regeneration and Worklessness 5.35
In terms of the strengths and weaknesses of the region, North West residents tended to view the friendly people and the proximity to countryside as being the key strengths (mentioned by 35% and 23% of respondents respectively). The main weaknesses were crime, the lack of jobs and poor road network (19%, 17% and 11%).
5.36
The challenge for the region in terms of quality of life is increasingly focused upon: • Building upon and sustaining the improvements in the region’s main cities - there remains much scope for improvement especially in the more deprived communities. • Concentrating more effort and resource on improving the quality of life within the suburbs which surround the region’s city centres and which are in danger of declining in the absence of investment. • Carefully managing development in parts of the region which have proved so successful in the past and could be in danger of overheating with the quality of life being undermined as a consequence (for example, parts of Cheshire and Warrington). • Tackling some of the issues which are currently endangering the high quality of life in the region’s remoter rural areas such as Cumbria. As noted above, these issues include access to employment and services and affordable housing.
Housing Market There are major concentrations of ‘at risk’ housing within the region …. 5.37
A key aspect of the North West’s competitive position and its quality of life is the provision of a range of housing types and tenures which meet the changing needs of their region’s residents and in-migrants. However, as the region has enjoyed a period of sustained economic growth, the housing market has increasingly become polarised between areas of strong demand and house price inflation and areas of low demand and failure.
5.38
The worst affected neighbourhoods have experienced large scale and persistent population decline over the last thirty years in response to the loss of employment, the decline of the public realm and environment, poor services, rising crime and a lack of investment. Whilst these issues have arisen across large parts of the region, there is a strong geographic concentration in the region’s larger towns and cities.
5.39
More recently, strong economic growth in parts of the region has lead to a reduction in worklessness and residents have tended to ‘vote with their feet’ by moving into the more affluent suburbs and this has exacerbated the problems experienced in declining neighbourhoods. Amongst the 19 districts which fall within the top 20% of deprived districts nationally, the overall population has fallen by 98,800 (-2.5%), while those in the top 10% have experienced a total fall of 74,900 (-3.5%). This of course masks the higher levels of population decline in the more deprived neighbourhoods within these districts.
5.40
The concentration of social rented sector housing and less attractive older private housing in such areas exacerbates the concentration of those with least choice, and makes the loss of those aspiring to home ownership and housing more suited to modern lifestyles inevitable. For this reason, many of the districts at the heart of the conurbation now experience the highest levels of in-commuting, as there is an increasing dislocation between residence and workplace.
Ref: A/00163 Page 103
North West Economic Baseline: Final Full Report – Regeneration and Worklessness 5.41
The analysis undertaken by CURS49 has indicated that deprivation in its own right is not the driving force behind housing abandonment and market failure. Various demand and supply factors were identified including: a severely limited range of housing tenure and type which is not well predisposed to changing economic and demographic circumstances and therefore demand; and high levels of economic inactivity and unemployment.
5.42
The scale of the problem is very large – in total there is an estimated half a million properties at risk, with the greatest concentrations in the urban cores and peripheral housing estates of Greater Manchester and Merseyside, as well as East Lancashire (see Table 5-8). Whilst the problems are less pronounced in parts of West Lancashire, Cumbria and Cheshire, there are nevertheless significant localised concentrations which undermine the competitiveness of these areas. The neighbourhoods which are most at risk are predominantly social housing areas, although by no means exclusively as there are also significant problems in mixed tenure areas.
5.43
Securing better functioning housing markets is critical to improving the current and future economic performance of the region, since it will put these communities on a more sustainable basis in their own right but also to support the wider requirement which the region has to retain and attract the workers which are necessary to meet the needs of a growing economy. The public sector has prioritised the need to tackle these issues and significant investment has been provided over the rest of the decade (including through the current HMR Pathfinders). Table 5-8 Scale and Distribution of Housing at Risk, 2003
Greater Manchester and Merseyside50
Stock
% of Total
55,000
10%
Greater Manchester Periphery
28,700
5%
Merseyside Inner Core
74,400
14%
Mersey Periphery
66,800
13%
Older Industrial Town
40,000
8%
Smaller Satellite Towns
15,400
3%
280,300
53%
50,000
9%
Greater Manchester Inner Core (e.g. Manchester and Salford)
Sub-total 51
Cheshire, Cumbria and Lancashire West Cumbria East Cumbria (mainly around Carlisle)
18,000 (41% of stock)
3%
Lancaster area Blackpool area
15,500 (28% of stock)
3%
29,000 (42% of stock)
3%
East Lancashire
135,000
26%
(no estimate available)
(no estimate available)
Sub-total
247,500
47%
Grand Total
527,800
100%
Cheshire
Source: Changing Hosing Markets and Urban Regeneration in the M62 Corridor, CURS, 2003; Changing Housing Markets in Cheshire, Cumbria and Lancashire, CURS, May 2003
49
Changing Housing Markets and Urban Regeneration in the M62 Corridor, CURS, 2003
50
ibid
51
Changing Housing Markets in Cheshire, Cumbria and Lancashire, CURS, May 2003
Ref: A/00163 Page 104
North West Economic Baseline: Final Full Report – Regeneration and Worklessness Parts of the region also constrained by the issue of housing affordability…. 5.44
The issue of the affordability of housing arises in locations across the region (see Figure 5-7) for a variety of different reasons. For example, high house prices in the region’s more attractive rural areas, which are less accessible to the urban conurbations, tends to reflect the in-migration of people for retirement and purchase of second homes, whilst the semirural areas on the urban fringe reflect their accessibility to commuters.
5.45
Cheshire falls into the latter category and its problems of affordability are the most extensive and severe in the region. They arise in two distinct areas, one south of Manchester and the other further west and serving Chester and Wirral (the more extensive area). The reasons for the affordability issues reflect the combination of high incomes and low deprivation (with the exception of a small area around Crewe, parts of Chester, and Ellesmere Port) and popular housing areas which have reasonably good accessibility to the region’s major conurbations and strategic transport links such as Manchester Airport.
5.46
The analysis of the region’s economic performance and prospects has a number of implications for the housing market in the North West: • Employment growth is expected to continue over the next decade. This growth is likely to be concentrated in the region’s City Regions and can be expected to feed through into reducing worklessness (although the extent of the fall is debatable). The investment which is currently being made in the Housing Market Pathfinders is vital to reversing the trend of depopulation of these areas. • However, the employment prospects in some parts of the region which are experiencing housing failure remain poor (such as East Lancashire). The underlying weakness of the economy needs to be addressed in conjunction with housing market measures. • The skill levels of the region’s workforce are gradually increasing and this is likely to feed through into an increased willingness of people to travel greater distances to work. Subject to the changing availability of housing across the region, this could put further pressure on both already failing housing areas and high demand suburbs and rural urban fringe areas. The ability to successfully regenerate inner city areas is important to tackling this issue. • As noted above, economic trends are likely to see continued pressure on high demand suburbs and urban fringe areas, subject to the affordability of property which will work to dampen demand to some extent. However, demographic trends, in particular the ageing population, could add further pressure as people choose to retire to these areas plus the region’s more popular rural areas (such as the Lake District and Cheshire).
Ref: A/00163 Page 105
North West Economic Baseline: Final Full Report – Regeneration and Worklessness Figure 5-7 Housing Affordability Ratio in North West Districts, 2004
Source: Admin Map 2005, Land Registry; ONS New Earnings Survey © Crown Copyright; Note: Regeneris calculations - Average House Selling Price: Average Yearly Wages) – a higher index value indicates less affordable housing
The Region’s Rural Economy 5.47
Although the above analysis has not focused exclusively on urban areas, the concentrated nature of deprivation and social exclusion means that the focus does tend to be upon the urban areas. However, due to commuting patterns of people who reside in rural areas but work in urban areas, the problems faced by these communities can often be masked. This section therefore looks at the nature of the region’s rural economy and the changes which have occurred in recent years.
5.48
An initial question concerns the nature of rural areas and what we mean by them. For purposes of this research, the rural economy of the North West is all economic activity that takes place in “rural areas” in the region, as well as economic relationship between rural and urban areas. The focus includes rural residents who commute into urban areas, since their income and wealth is an important source of expenditure in many rural areas close to urban areas and these commuting residents often have higher skill levels than the average for other rural residents.
5.49
But which are rural areas of the North West? In broad terms, the region has three distinct types of rural areas – the uplands of Cumbria and the Pennines, the lowland plains of West Lancashire and Cheshire and the rural fringes of the major urban areas in Greater Manchester, Merseyside and other large industrial towns.
Ref: A/00163 Page 106
North West Economic Baseline: Final Full Report – Regeneration and Worklessness 5.50
Setting data on employment across three broad sectors against the local areas (NUTS 3), and separating rural/urban LAD areas, Pion Economics have made a broad estimate GVA for the North West’s rural economy52. The key points are:
• There are also significant differences in the importance of the broad sectors in generating wealth – land based industries and manufacturing are relatively more important in the rural areas. • Although the scope to undertake trend analysis is limited, the general point which arises is that the transition towards services from primary and industry sectors is as much evident in rural areas as in other parts of the urban region.
Pion
• With total (2002) regional GVA defined at £92bn, this process of estimation suggests that the rural areas of the North West contribute some £21bn (23%) of this aggregate – broadly in line with both the rural population and employment base.
NW Rural & Urban GVA Rural (£bn)
Urban (£bn)
Total (£bn)
Rural (%)
Urban (%)
Total (%)
Agriculture
0.5
0.2
0.7
72
28
100
Industry
7.2
19.4
26.6
27
73
100
Services
13.3
51.6
64.9
20
80
100
Total
21.0
71.2
92.2
23
77
100
Source: ONS & Pion Economics
• Average 2002 per-capita GVA in the rural northwest amounted to just over £13,000 compared to £13,780 in the urban northwest and £13,599 in the region as a whole. However, the rural figure is boosted by the inclusion of many parts of rural Cheshire in the definition of the rural area. Cheshire per capita GVA profiles are higher than both the region and UK – without them the estimates for the West Cumbria, East Cumbria and (rural) Lancashire are £10,562, £12,187 and £9,870 respectively. 5.51
Whilst the economic structure of the rural economy does have some distinct features (namely the presence of agriculture), it is more similar to the North West as a whole than is commonly appreciated. Whilst the economic structure has been changing, it is not particularly growth orientated and has a lower presence in the faster growing sectors. Key points include: • The importance of agriculture as a source of employment is fairly modest - in most of the region’s rural districts accounting for less than 5% of total employment – only in Eden is it above 10% (see Table 5-9). It is should also be borne in mind that agriculture has a far wider importance to rural areas through its role in defining and maintaining the nature and quality of the region’s landscapes. • Distribution and manufacturing continue to be very important sectors within the rural economy - together they typically account for between 20%-30% of employees depending on the remoteness of the area • The public services play a very important role as an employer (and provider of services) in all rural areas, accounting for between 20% to 25% of employees.
52
GVA data is provided for 2002 across three broad industry sectors – agriculture and related activities, industry (including energy & construction) and services - and is workplace-based or defined in terms of where GVA is generated rather than where workers reside.
Ref: A/00163 Page 107
North West Economic Baseline: Final Full Report – Regeneration and Worklessness • Whilst business services has grown in importance within the rural areas in more recent years, it remains concentrated in the more accessible rural areas and located in the market towns. Table 5-9 Districts with Highest Shares of Agricultural Employment, 2001 Area
Residents in Employment
% of all District Employment
Eden
2,500
Allerdale
1,900
10.1% 4.6%
South Lakeland
2,100
4.3%
Ribble Valley
1,000
3.8%
West Lancashire
1,800
3.7%
Carlisle
1,600
3.4%
Crewe and Nantwich
1,500
3.0%
Copeland
800
2.9%
Chester
1,500
2.7%
Wyre
1,200
2.6%
Vale Royal
1,400
2.4%
Lancaster
1,200
2.2%
Macclesfield
1,000
2.0%
Sub-total
20,000
3.3%
NW Total
34,500
1.2%
Source: Census of Population 2001
5.53
Self-employment is an important part of the region’s rural economy. The proportion of the workforce who are self-employed, both male and female, is higher than in urban areas. The extent of self-employment also increases the more sparsely populated the area. This reflects a combination of factors including the structural composition (especially the presence of agriculture and related activities), as well as the relative fewer job opportunities.
Employees and Self-Employed of Working Age (2003)
Pion
5.52
% of Working Age 0
25
50
75
100
Employees - All Self Employed - All Employees - Males Self Employed - Males Employees - Females Self Employed - Females Rural
Urban
Source: LLFS
The population base of the rural North West has an older age structure (), the average age of which is increasing. The trend has been driven by a falling birth rate and a declining younger age group, in conjunction with the growth of the older age cohorts. Whilst it is difficult to generalise, migration patterns have been an important influence, with the outmigration of younger workers and in-migration of older workers and retirees. However, these trends are more pronounced in the remoter rural areas, where access to work is a constraint. The more accessible areas have tended to experience stronger in-migration due to their popularity amongst commuters.
Ref: A/00163 Page 108
North West Economic Baseline: Final Full Report – Regeneration and Worklessness Table 5-10 Age Distribution of the Population (%) 0 to 4
5 to 15
16 to 19
20 to 64
65 to 74
75+
Total
Urban
6.0
15.0
5.2
58.0
8.4
7.3
100.0
Less sparse rural town
5.3
13.7
4.4
58.6
9.6
8.4
100.0
Less sparse rural village
4.9
13.4
4.3
60.1
9.8
7.5
100.0
Less sparse rural dispersed
4.6
13.1
5.7
61.0
9.0
6.7
100.0
Sparse rural town
4.8
13.0
4.7
56.1
10.6
10.7
100.0
Sparse rural village
4.8
13.0
4.2
58.6
10.9
8.5
100.0
Sparse rural dispersed
4.4
13.4
4.7
59.6
10.5
7.5
100.0
Source: Pion Economics (Defra (REH))
5.54
One of the difficulties with using the IMD within rural areas is that deprivation is often highly concentrated spatially and can be masked within ‘averages’. The overwhelming message is that the region’s rural areas have significant concentrations of both prosperity and deprivation, often existing ‘cheek by jowl’. On most measures of deprivation used in the index, rural towns are identified as having the greatest concentrations of deprivation. The exception to this is the access to services domain, where the remoter communities score comparatively less well.
5.55
The region’s rural economies have had mixed fortunes. There certainly has been strong employment growth in many parts of the rural economy, with a net increase in employees in employment of around 27,000 between 1999 and 2000 (an average increase of 5.8%, which compares to 5% for the region as a whole). This growth has been experienced across a broad swathe of the region’s rural economy, with the exceptions of parts of Cheshire (where the capacity for growth is heavily constrained), parts of the Pennines and the Fylde coast.
5.56
Much of this growth has been driven by the expansion of the service sector, including the public sector, whilst the manufacturing sector has performed better than average for the region. As demonstrated in Table 5-11, the growth in employment has been accompanied by large falls in economic inactivity and JSA claiming. Although to varying degrees, the more accessible rural areas have benefited from in-migration which has helped to boost demand for goods and services and hence generated employment. In addition, rural areas have also benefited from the growth in public sector expenditure which has driven the creation of jobs.
5.57
However, parts of the region have performed less well in terms of the generation of wealth as measured by GVA. It is clear that parts of the rural economy, most notably Cumbria, have performed far less well than the region as a whole. Whilst Cumbria has been successful in generating a significant net growth in jobs (although from a comparatively small base), the loss of high value added manufacturing jobs (at Barrow for example) has not been matched by the creation of jobs in the service sector. This remains a continuing threat for Cumbria, where the rundown of Sellafield will lead to the loss of large numbers of jobs.
Ref: A/00163 Page 109
North West Economic Baseline: Final Full Report – Regeneration and Worklessness
Table 5-11 Change in Employment Economic Inactivity and JSA Claiming, Rural North West Districts, 1999-2003 Economic Inactivity Change in JSA Employment change Change Claiming Area No % % No % No. Rural NW 24,042 4.5% -26,000 -14.4% -5,559 -30.5% Urban North West
126,255
5.5%
6,000
0.2%
-32,846
-26.6%
Total
150,297
5.3%
-20,000
-2.9%
-38,405
-27.1%
Source: NOMIS – ABI, LFS and DWP Benefits
5.58
Why have some parts of the rural economy performed reasonably well and others less well? Although there is the danger of generalisation, it is possible to pick out a number of factors which are common to the rural areas which have tended to perform more strongly in recent years – the key points are: • Many parts of the rural economy have benefited from sustained economic growth nationally and more recently the strong economic performance across the region. Historically high employment levels and the growth in house prices (+22% in the rural North West compared to 26% in the urban areas), has stimulated demand for services. • The more accessible parts of the region in particular have actually benefited from a growth in population. Although this raises a variety of issues, it does help to stimulate demand for goods and services and can be an important source of additional enterprise activity53. • Another key driver for rural economic success has been the above average rate at which new businesses are started. The business birth rate as a percentage of stock and, especially, per head of population are well above the regional average. There are several reasons why the business birth rate is relatively high; including an already high density of small and micro businesses, a resident population (especially in the more accessible areas) who are more highly skilled and more likely to start businesses and this is further stimulated by in-migration54. • The comparative success has probably also been assisted by the relatively high levels of economic participation (80% compared to 75% of the working population in the urban areas) and the mix of skills available in the local economies (only 13% of the population hold no qualifications compared to 18% for the working age population in the urban areas). Participation is higher in the more dynamic areas which have become increasingly popular as commuter areas for the larger urban centres.
5.59
53
Nevertheless, the picture is mixed and there remain some significant challenges for the region’s rural areas:
A Countryside Agency study, Self-employment in Rural England, found that the self employed tend to be more highly skilled than rural employees in general.
54
(Keeble and Tyler, 1994) found that the majority of entrepreneurs in rural areas are in-migrants and that the quality of the rural environment (both landscape and built) is a key driver for this in-migration.
Ref: A/00163 Page 110
North West Economic Baseline: Final Full Report – Regeneration and Worklessness • Tackling the challenges of poor economic performance in Cumbria, in part due to economic restructuring but also the issue of remoteness of parts of the sub-region (in particular West Cumbria) from the main urban centres. • Managing the pressures upon the more accessible parts of the rural economy which have proven popular business and residential locations. There is the danger that growth in these areas is unsustainable and actually damages their long term prospects. However, in other parts of the rural economy, in-migration offers important opportunities to boost demand and to stimulate enterprise (particular issues in more remote areas). • Diversifying and strengthening the business base of the more vulnerable parts of the rural economy (including protecting itself from the loss of major employers). There are very real opportunities to grow service sector based activities (e.g. retail, tourism and leisure related, business services) and exploit the strong presence of others (such as the public sector). • Tackling the growing divide within the rural economy defined by those with high incomes and good prospects and those with low skills and incomes and poor prospects for the future.
Ref: A/00163 Page 111
North West Economic Baseline: Final Full Report – Infrastructure and Image
Infrastructure for Growth
6.
Key Issues for the RES •
Offering a good choice and volume of attractive employment land sites is vital to improving the North West’s economic performance, particularly in order to meet key strategic aims to raise GVA per employee by attracting and retaining greater levels of investment from companies in higher value markets.
•
The region has huge stocks of previously developed land (much of it derelict).
Problems of
dereliction are particularly challenging in low-demand areas where there is limited development pressure and the costs associated with recycling land acts as a deterrent to investment, contributing to poor image and further decline. Ongoing industrial change means that the region’s stock of previously developed land will continue to be added to. •
Increased economic growth has brought increased demands upon parts of the region’s strategic transport infrastructure (particularly on the road and rail networks) and increased difficulties in moving goods and people within and beyond the region. Without additional capacity and more effective and efficient use of capacity the ability of the region’s transport infrastructure to underpin higher economic growth in the future will be constrained.
•
The North West now has a good basic ICT infrastructure with broadband coverage approaching 100%. However, the region’s businesses, public sector bodies and citizens will need to make much more effective use of it if the region is to maintain and enhance competitiveness. Increased take-up of broadband , greater adoption of basic ICT and a greater willingness and determination to use ICT as a business and learning tool is required.
•
The environment of the North West clearly has a very high intrinsic value. The environment also has a major economic value, sustaining the region’s primary industries and much of its tourism. As the need for regions to attract and retain highly qualified workers grows, the environment of the North West will become increasingly important to the region’s quality of life offer. In addition, there are related opportunities and threats in terms of changes in environmental legislation and their impact on businesses, as well as the potential for growing the environmental technologies sector.
•
The limited evidence suggests that the North West’s image is improving and the on-going regeneration of the region’s major cities and one off events like the Commonwealth Games have been important in achieving this. However, the region continues to be hampered by poor perceptions – in some respects it still falls short in its ability to present a contemporary image as a modern, knowledgedriven economy.
•
Tourism is a major sector in the region, providing both employment and wealth and also helping to inform the image and perceptions of the region beyond it borders. However, whilst it performs strongly in attracting visitors from the North of England, our tourism sector perform less well in attracting international visitors (and those from the South East) and business tourism (although this is improving). There is the need to build on the region’s assets (e.g. the Lake District, Manchester and Liverpool airports) and opportunities (e.g. conferences and events, Capital of Culture).
•
The region is rich in cultural assets although it has tended to perform more strongly in some respects (world class sporting activity, important and diverse landscapes including the world famous Lake District, historic towns and cities such as Chester) than others (despite considerable efforts the built heritage has tended not to be adequately protected or exploited for the region’s benefit).
Ref: A/00163 Page 112
North West Economic Baseline: Final Full Report – Infrastructure and Image
Introduction 6.1
Infrastructure plays a key role in any economy. Well-directed investment in elements of the North West’s infrastructure can help to remove constraints on latent growth potential, stimulate higher rates of growth (both in the region as a whole but also in particular locations) and help to ensure that opportunities are accessible to more citizens and businesses. In this section we examine broad elements of the region’s infrastructure, focusing on: •
Sites for employment-generating uses
•
Tackling our industrial legacy (addressing derelict and other brownfield sites)
•
Strategic Transport Infrastructure
•
Accessibility and Local Transport
•
Information & Communications Technology (ICT)
•
Image (internal and external perceptions of the North West)
•
Tourism
•
Cultural and Heritage Assets.
Sites for Employment-Generating Uses The region’s land portfolio should support efforts to compete for and attract the highest value occupiers… 6.2
A good supply of attractive employment sites is vital if the North West is to build upon the economic growth secured in recent years and to make progress towards closing the overall gap in Gross Value Added and productivity that currently exists between this region and the best performing regions in England. The North West must provide a strong (and in some cases outstanding) offer to a range of indigenous and incoming businesses if it is to raise its performance on wealth generation and compete with the offers available in other regions in the UK and beyond.
6.3
Total take-up of employment land in the North West varies across the region. Not surprisingly, the take-up rates are greatest in the major conurbations (with the sub-regions of Greater Manchester and Merseyside having the largest annual average take-up). However, lower take-up rates are also significant in other parts of the region, in particular Warrington, Halton and parts of Lancashire. Whilst all sub-regions have been successful to some extent in attracting new investment in service and/or ‘knowledge-based’ activities, some locations have been more successful than others (for example, Warrington, Chester and South Greater Manchester/Northern Cheshire area).
6.4
In order to consider how to maximise growth and investment in the region through the employment site offer, it is useful to (in broad terms) outline the market segments that the region will need to cater for, including: • Firms providing goods and services (in both higher and lower value added sectors) on a primarily local, sub-regional or regional basis. • Firms supplying goods and services on a multi-regional or national basis (including national or divisional headquarters, major distribution facilities and major manufacturing operations)
Ref: A/00163 Page 113
North West Economic Baseline: Final Full Report – Infrastructure and Image • Firms undertaking higher or very high value added activities serving national or international markets. 6.5
In all of these market segments the region must offer both sufficient quantity of employment land of the required type and a sufficient choice of sites in order to maximise its chances of securing and retaining investment (as well as addressing other factors such as skills provision). Implicit in this is the issue of timing – occupiers (particularly many inward investors) require sites that are readily available. All sub-regions (although to varying degrees) should aspire to meet the needs of, and compete for, occupiers in these market segments and all have to some extent demonstrated their ability to attract high value added activities. However, it is vital that the region as a whole has the employment land portfolio required to compete for, and attract, investment in all segments, particularly in the highest value sectors.
6.6
The region’s economic structure has been undergoing significant industrial change for some time. Between 2000 and 2004, Experian estimate that the proportion of employment in the North West accounted for by manufacturing55 fell from 16.8% of total employment to 13.7% (with a loss of approximately 72,000 jobs). This structural shift, with the loss of manufacturing employment and increased service sector employment, is expected to continue into the future. The scenarios suggest that between 2000 and 2010 manufacturing employment will fall by nearly a quarter (over 120,000 jobs). Over the same period the scenario work suggests that service sector employment will grow by between a little less than fifth (over 400,000 jobs).
6.7
This ongoing structural change and the need to increase GVA per employee (particularly in the important Business Services sector) have profound implications for the region’s employment land offer. Encouraging the growth of higher value added activities (both through indigenous growth and inward investment) is a strategic priority and one which should be reflected in the region’s employment land portfolio. This means having high quality, well-connected sites in a range of locations and exploiting the region’s key knowledge assets in the public, private and HEI sectors. The availability of pools of suitably skilled labour is also a primary consideration and factors such as access to international airports, world class cultural and sporting facilities and events, and cosmopolitan urban centres, are becoming increasingly important.
6.8
In order to maximise the contribution to GVA it is vital that the region as a whole provides an offer that is able to cater for the needs of the very highest value occupiers in both the service and manufacturing sectors (those undertaking very high value added activities of national or international significance). Whilst major manufacturing inward investments into the UK are relatively few in number they are potentially very significant sources of employment and particularly GVA.
55
Defined as the following sectors: Food, Drink & Tobacco; Textiles & Clothing; Wood & Wood Products; Paper,
Printing & Publishing; Fuel Refining; Chemicals; Rubber & Plastics; Metals; Minerals; Machinery & Equipment; Electrical & Optical Equipment; Transport Equipment, and Other Manufacturing.
Ref: A/00163 Page 114
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.9
The increasing importance of service sector employment growth and the decline of manufacturing employment will result in an intensification of land-use56 and therefore, all other things being equal, lower overall take-up of employment land (although the different growth scenarios described above would result in different total take-up levels). The ongoing decline in manufacturing employment will also lead to increased opportunities to recycle employment land. In some cases investment in these previously developed sites will enable the successful re-badging and marketing of these sites for other employment (and nonemployment) uses.
6.10
However, even with major investment not all of these sites would prove attractive to higher value employment uses by virtue of their location, costs associated with remediation, and the nature of the surrounding area. Total future demand (particularly if the region is to compete for higher growth activities) will not be met by the recycling of existing sites as these will not all be in the right locations or viable to recycle (and are likely to be more suitable for housing. Leisure or woodland uses). There will continue to be a need for new sites in the longer term (including greenfield sites).
6.11
Employment growth in recent years has been centred on the major city regions/ conurbations (both in the urban cores and fringes). Partners in the region must anticipate, cater for and encourage this broad trend (and build on the strengths of these areas including knowledge assets, airports and road/rail links). However, the region should also ensure that there is adequate site provision (scale, quality, choice and timing) in other parts of the region in order to promote regeneration in priority areas. … and Strategic Sites of regional significance will play a key role in this
6.12
The North West’s portfolio of Strategic sites is vital resources in the region’s efforts to maximise both employment and wealth. In identifying future strategic employment sites one of the key factors to be considered should be the extent to which the North West’s strategic site offer is sufficiently strong and distinctive to attract investment in high value functions in target sectors. The opportunity to capitalise on strong or world-class assets such as our HEIs and private sector R&D (as in Alderley Park) should be a key consideration.
Brownfield Land Our industrial legacy includes huge stocks of previously developed land… 6.13
56
The North West was at the forefront of the industrial revolution and to this day remains one of the UK’s major manufacturing centres. However, ongoing (and accelerating) changes in the composition of the region’s economy mean that the region has huge stocks of previously developed land (PDL). The North West has some 11,390 ha of PDL – this is the largest stock of any region in England (representing 17.7% of the total in 2003). Moreover the region also faces major challenges of dereliction – 22.8% of the total area in England that is covered by derelict57 land and buildings is in the North West. (Table A6-1 in Appendix A provides more detail of the change over time).
Land use is expected to intensify due to the nature of the land use by the service sector – it tends to require less floorspace for machinery and hence the floorspace and land required per worker is less.
57
Land so damaged by previous industrial or other development that it is incapable of beneficial use without treatment (including demolition and levelling).
Ref: A/00163 Page 115
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.14
All sub-regions of the North West have substantial stocks of previously-developed land. The largest stock is in Greater Manchester (2, 756 ha), followed by Greater Merseyside (2,210 ha) and Cheshire & Warrington (2,146 ha). In each sub-region Derelict Land & Buildings account for a high proportion of total PDL – for example 54% of all PDL in Greater Merseyside and 48% in Greater Manchester, compared to 31% in England as a whole. Table 6-1: Previously Developed Land in the North West (ha), 2003 Vacant and Derelict Land & Buildings
Previouslydeveloped vacant land
Derelict Land and Buildings
Vacant Buildings
Currently in use
All Vacant and derelict
With planning allocation or permission
Other with known potential
All Types
has
has
has
has
%
has
has
has
%
Cheshire & Warrington
541
944
71
1556
19%
328
261
2,146
22%
Cumbria
209
779
62
1050
13%
51
72
1,173
12%
Lancashire
395
671
96
1162
14%
201
113
1,476
15%
Greater Manchester
1,232
1,325
126
2683
33%
536
683
2,756
28%
Greater Merseyside
438
1,202
76
1716
21%
136
103
2,210
23%
North West
2815
4921
431
8167
100%
1252
1232
9761
100%
Source: National Land Use Database
6.15
Table 6-2 below shows the total stock of reported PDL and of Derelict Land & Buildings in each sub-region as a percentage of total allocated/ committed employment land58. Again this analysis underlines the scale of the PDL and particularly dereliction challenges facing the region. In all sub-regions the total stock of PDL is greater than the total employment land currently allocated or committed, and in four out of five regions it approaches or exceeds almost twice the stock of employment land. The total stock of Derelict Land & Buildings is also either greater than (in the case of Cumbria) or close to the total employment land in most sub-regions.
Table 6-2 Previously Developed Land and Derelict Land & Buildings as a Percentage of Total Allocated or Committed Employment Land Derelict Land & Previously Developed Land Buildings Total Allocated/ % of Total % of Total Committed Ha Employment Ha Employment Employment Land1 Land Land Cheshire & Warrington 1,215 2,146 176.6 944 77.7 Cumbria
603
1,173
194.4
779
129.1
Greater Manchester
1,340
2,756
205.6
1,325
98.9
Lancashire
1,091
1,476
135.2
671
61.5
Greater Merseyside
1,216
2,210
181.6
1,202
98.8
Sources: 1
National Land Use Database
2
Employment Land Study – Employment Sites Appraisal: Phase 1 and 2 Report, Draft, North West Regional Assembly, 2005
58
As reported in draft ‘Employment Land Study – Employment Sites Appraisal: Phase 1 and 2 Report’, North West Regional Assembly, 2005
Ref: A/00163 Page 116
North West Economic Baseline: Final Full Report – Infrastructure and Image
Figure 6-1: Distribution of Previously Developed Land in the North West, 2003
Source: National Land Use Database, PDL which is unused or may be available for development
Ref: A/00163 Page 117
North West Economic Baseline: Final Full Report – Infrastructure and Image
6.16
Although it is difficult to point to firm evidence, we believe that the scale of the problem within the region (and particularly within particular sub-regions) continues to be a constraint on the North West’s economic growth due to its impact on the region’s image (both internally and externally) and the discouragement of investment. Large swathes of the region’s PDL are not attractive to new occupiers, particularly higher value businesses, often being in relatively inaccessible locations and set within areas of relatively poor environmental quality (both natural and built). They are also often in close proximity to residential areas, undermining their attractiveness to existing and potential residents. In many cases, the greatest concentrations of PDL and dereliction are in low demand areas, reducing the economic viability of remediation and contributing to a vicious circle of decline.
6.17
Although there are exceptions, many of the sectors expected to drive growth in the future exhibit a preference for either city centre locations or high quality urban fringe locations as they seek (to different degrees) a number of key benefits such as: •
High quality business accommodation with access to highly skilled labour pools;
•
Connectivity via access to strong road, rail, airport and ICT networks
•
Proximity to and visibility from the strategic road network
•
High environmental quality in the immediate and surrounding areas
• Proximity to higher education institutions and other centres of knowledge, including high value professional services; • Access to a range of high quality living environments (both urban and rural), including access to high quality sporting and cultural facilities and events, and a cosmopolitan lifestyle. 6.18
For many higher value enterprises (which are particularly sensitive to environmental quality), the problems associated with PDL and dereliction are such that the appeal of wide areas can be reduced. Whilst individual sites (whether PDL or not) may be attractive, the need to travel through areas of poor environmental quality to access them can be a significant deterrent to investment. The costs associated with the remediation and re-use of much of the region’s PDL also acts as a constraint on the recycling of land for economic uses (and non-economic uses), inhibiting regeneration within communities throughout the North West. The scale of the problem is such that a strategic and well-targeted approach is required…
6.19
Despite considerable remediation efforts the total stock of PDL in the North West has remained at broadly the same level in recent years as the regional economy’s ongoing structural shift continues and new sites are added to the total stock - between 2001 and 2003 total PDL in the North West increased by 680 ha (6.3%), although there was a 3% reduction between 2002 and 2003 (see Table A6.1 in Appendix A). However, there has been a change in the total composition of PDL over this time, with a strong growth in the proportion of PDL that is ‘currently in use’ (either allocated for development or with existing planning permission where redevelopment has not yet started) although total dereliction has remained broadly unchanged. This suggests that progress has been, or will be, made in bringing sites forward for redevelopment.
Ref: A/00163 Page 118
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.20
The scenarios set out in this report and discussed above all point to a continued decline in employment in manufacturing (as noted above the employments scenarios suggests that between 2000 and 2010 manufacturing employment will fall by nearly a quarter and over 120,000 jobs). As a result we can expect this flow of additional PDL sites to continue and for PDL to remain a major and ongoing challenge for the region for the foreseeable future. Whilst this net decline in manufacturing employment will occur across all sub-regions, the greatest absolute reduction is forecast to occur in Greater Manchester (at least a third of this overall reduction).
6.21
The overall employment growth expected in the North West will result in the take-up and recycling of some of this land but probably not in a dramatic reduction in the overall stock. Moreover, as discussed above, the locational requirements of many firms in key growth sectors are such that demand for many of the PDL sites for employment uses may be limited. Tackling PDL will prove more difficult in less dynamic economies (for example Cumbria, East Lancashire and parts of Merseyside). However, in more buoyant areas (for example, Cheshire and Warrington) PDL may help to overcome (in part) the greenfield constraint to growth.
6.22
The scale of the PDL problem in the region is such that it greatly outstrips the resources available to address it in full (the NWDA estimates that it would cost between £1bn and £2bn to tackle fully, depending on remediation approaches adopted). But needless to say, it isn’t appropriate or necessarily desirable to secure employment uses on PDL which previously had them. Some of the best opportunities for recycling PDL arising from housing, leisure and woodland uses. A positive approach to soft end uses, especially woodland, is an important element of the strategy for tackling this issue.
Strategic Transport Infrastructure Transport infrastructure underpins the development of the regional economy… 6.23
The North West’s strategic transport infrastructure – the key road, rail, air and maritime links between the region, neighbouring regions and beyond – underpins the development of its economy. The capacity of that infrastructure to meet increases in the demands placed upon it helps to determine the region’s ability to achieved sustained economic growth - where this infrastructure is unable adequately to handle increased demands it can quickly become a major constraint on economic growth, competitiveness and on quality of life.
6.24
Put simply, the strategic transport infrastructure helps to animate the economy – to ensure that all of its moving parts can function as required. Investments in the strategic transport infrastructure can help to stimulate economic development and regeneration both across the region but also within particular locations, improving reliability, efficiency and accessibility.
6.25
For the North West, the strategic transport infrastructure must perform three broad roles effectively: • Enabling people to travel around, into and out of the region by road, rail and air as quickly and safely as possible and with predictable journey times. This includes access to city centres and other major employment locations, and to international gateways (most notably the region’s airports). • Enabling the rapid and efficient movement of freight by road, rail, air and sea from the North West to key markets around the world. This requires excellent road and rail links
Ref: A/00163 Page 119
North West Economic Baseline: Final Full Report – Infrastructure and Image in particular north-south links (to key markets in the South East, London, Europe and to key ports and airports). • Offer effective international gateways (both air and maritime) in order to enable the North West to trade and interact with the rest of the world. Airports and ports should provide excellent links to the wider world but should also enjoy excellent accessibility to the region’s main markets and centres of production. … but parts of the region’s infrastructure are under stress… 6.26
Economic growth and gains in employment experienced in the region in recent years have increased demands upon the strategic transport infrastructure. This has manifested itself in increases in private car usage (as a result of both rising car ownership and increased propensity to travel) and strong increases in rail patronage. The volume of freight moved by road has also increased significantly since 1993 (16.4%), which has placed additional burdens on the strategic road network. However, the rate of increase in goods originating from the region has not grown as fast as any region bar London, with the Midlands experiencing the greatest growth due to its growing role as a national centre for distribution and logistics.
Table 6-3: Freight Transport by Road - Goods Moved by Origin of Goods (million tonne-kms) % Change Origin
1993
North East
2000
2001
2002
2003
1993 2003
2000 2003
5,873
6,137
5,990
6,405
6,853
16.7
11.7
17,857
21,113
20,815
19,841
20,794
16.4
-1.5
Gtr Manchester
4,862
5,852
5,919
5,877
5,650
16.2
-3.5
Merseyside
2,610
3,134
3,350
3,156
3,493
33.8
11.5
Rest of North West
10,385
12,127
11,546
10,808
11,651
12.2
-3.9
Yorkshire & the Humber
16,153
18,417
16,901
18,799
19,000
17.6
3.2
East Midlands
12,998
15,766
16,560
16,884
16,251
25.0
3.1
West Midlands
12,317
14,494
14,586
15,199
15,243
23.8
5.2
East
15,852
17,732
18,242
18,396
18,964
19.6
6.9
North West
London
5,025
5,382
5,337
5,021
4,919
-2.1
-8.6
South East
13,273
16,799
16,422
15,637
15,592
17.5
-7.2
South West
10,099
12,483
12,387
12,121
12,497
23.7
0.1
109,447
128,323
127,240
128,303
130,363
19.1
1.6
128,625
150,482
149,398
149,826
151,711
17.9
0.8
England Great Britain
1
Source: Regional Transport Statistics, Department of Transport Note: 1 Include negligible figures for goods lifted with Northern Ireland as origin.
Ref: A/00163 Page 120
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.27
Table 6-4 shows the increase in traffic on major roads in the North West (21.3%) and other
regions between 1993 and 2003. This is in line with trends across the country, with all regions (excluding London) experiencing very substantial proportional increases in traffic volumes.
Table 6-4: Traffic Increase on Major Roads Region
% Change 1993 to 2003
North East
21.0
North West
21.3
Yorkshire & the Humber
21.8
East Midlands
26.1
West Midlands
19.8
East
20.9
London
2.6
South East
24.8
6.28
South West 25.2 This increase in traffic England 21.1 volumes has, almost Source: National Road Traffic Survey, in DfT Regional Transport Statistics inevitably, resulted in increased congestion on the region’s roads. Excluding London, the North West is the most congested region in England (along with the South East) (see Table 6-5 below). Of course, congestion is not a uniform phenomenon, being focussed on key strategic routes and interchanges (both on North-South and East-West routes) and around major centres of economic activity. There is a particular issue where heavy volumes of local traffic come into contact with busy strategic routes – key hotspots include stretches of the M6 through Cheshire and into the West Midlands, access to Manchester city centre, the M60/ M62 in North Manchester and the M56 and M60 in South Manchester.
6.29
Congestion is also worst at particular times of day (morning and evening peak times), although these peak times have tended to lengthen and in some instances congestion occurs to varying degrees throughout the day (excluding London the North West has the worst weekday off-peak and ‘all-day’ congestion). Table 6-5: Congestion on Trunk Roads, 2000 Congestion - (seconds lost per vehicle km)
Weekday am peak
Weekday offpeak
Weekday pm peak
All periods
East
8.4
2.4
7.3
3.8
East Midlands
3.8
1.8
4.5
2.1
37.8
16.2
28.0
18.9
London North East
5.5
0.7
7.6
2.7
North West
9.3
5.1
8.2
5.0
South East
9.7
2.8
7.4
4.2
South West
1.6
0.5
3.7
1.1
West Midlands
8.9
3.3
8.5
4.4
Yorkshire & the Humber
5.8
2.2
5.0
2.7
All trunk roads in England
8.6
3.2
7.6
4.2
Source: Department of Transport
Ref: A/00163 Page 121
North West Economic Baseline: Final Full Report – Infrastructure and Image
6.30
The region’s rail network has also helped to absorb the increased demand for travel in recent years. Total rail patronage grew by 43% between 1995/96 and 2003/04, outstripping growth in Great Britain as a whole (34%) but less than some neighbouring regions (due in part to constrained capacity on key services in the region). Again, as with demands on the road network, this increase is greatest for key strategic routes, resulting in increased overcrowding at peak times. In some key locations, most notably the ‘Manchester rail hub’ at which many routes (local and strategic) converge, opportunities to add further services at peak hours are constrained by difficulties in increasing network capacity. Origin North East North West Yorkshire/Humber East Midlands West Midlands East London South East
Table 6-6: Growth in Rail Patronage (1995/6 = 100) 1995/1996 1997/1998 1999/2000 2001/2002 100 114 125 117 100 125 135 132 100 120 136 126 100 117 137 145 100 118 128 130 100 119 136 145 100 113 126 128 100
111
125
129
2003/2004 122 143 150 159 144 155 129 136
South West
100
112
119
123
137
England
100
114
128
130
135
114
127
129
134
Great Britain 100 Source: Department of Transport
6.31
Despite the increase in employment and economic activity in the North West in recent years, the total number of journeys made by bus has decreased (with 13 million fewer bus and light rail journeys made in 2003/4 than in 2000/1, continuing a long-term trend (see Table A6.2 in Appendix A). One key cause of this decline appears to be the strong desire for carownership and for the door-to-door convenience driving can offer. It is worth bearing in mind that the willingness to travel is strongly linked to skill level, as is car ownership. Higher occupational groups have longer travel to work time (see Table A6.3 in Appendix A) and the gradual increase in the region’s skill levels will impact upon overall levels of commuting. Bus patronage is particularly low amongst higher income groups.
6.32
The region’s rail and particularly road networks were highlighted as a regional weakness by North West residents in the MORI’s 2003 survey on perceptions of the North West. In 2003, 11% of North West residents felt that the road network was a weakness, up from 7% in 2001. It is worth bearing in mind that whilst the region’s development agencies promote the region on the basis of it being less congested, economic growth is actually increasing levels of congestion. How can the region respond?
6.33
There is already evidence that the region’s strategic transport infrastructure is under some stress, manifesting itself most notably in congestion on the strategic road network but also in overcrowding in key rail passenger services. The region’s future economic growth will be constrained by its infrastructure unless more is done to expand the existing capacity, ensure that capacity is used to its full potential, and that capacity is used efficiently (encouraging people to use public transport wherever possible, minimise unnecessary trips and make greater use of opportunities for homeworking).
Ref: A/00163 Page 122
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.34
In particular, the ability of the region to achieve the sustained uplifts in economic growth set out in the higher growth scenarios may well be restricted. We believe particular pressure points are likely to include: •
M6 through Cheshire to the West Midlands (Junctions 19-11);
•
M62/ M60 in northern Greater Manchester;
•
M62 between Warrington and Manchester, and from West Yorkshire into Manchester;
• Surface access to key airports (particularly Manchester) and airside infrastructure capacity (e.g. terminals and runway capacity) in the longer term, as well as surface access to the region’s ports most notably the port of Liverpool; • The capacity of the Manchester heavy rail hub in order to improve the capacity to get rail services into Manchester city centre, as well as connections with Liverpool, Preston, Leeds and Sheffield, as well as London. 6.35
Looking to the longer term, there is the opportunity for radically improved rail connectivity between Manchester and London. The Department of Transport has indicated considering the need for a very high speed rail link between the cities in the future, including a 300mph system which has been proposed by one developer (which would reduce the travel time to 45 minutes).
Accessibility of Employment and Local Transport 6.36
In addition to good transport connectivity with neighbouring regions and beyond, the North West’s economic competitiveness also depends upon the extent to which residents are able to access employment opportunities in other parts of the region and within individual subregions. Good accessibility to a wider range of employment opportunities around the region brings a number of important economic benefits: • Giving residents a greater choice of employment opportunities and in particular access to a greater range of more specialised or highly paid openings. • Maximising the pools of labour on which employers can draw in order to recruit staff with the most appropriate skills and aptitudes. This should have an impact on performance and productivity, helping to close the GVA gap between the North West and the best performing regions. • Enabling residents from areas with high rates of worklessness to access appropriate opportunities for employment. Strengthening the links between areas of employment need and employment opportunity will (alongside other interventions) help to close the GVA gap through addressing the region’s low employment rate. It can also assist in the regeneration of communities around the North West.
6.37
In general terms, improving transport accessibility improves the labour catchment area, which is important to meeting the labour and skills needs of both indigenous businesses and inward investors. This in turn helps to tackle current constraints on growth and to stimulate economic growth. For this reason, improved accessibility to labour (but also markets) is a key theme which is emerging from the City Region Development Plans, in particular in the case of Manchester City Region.
Ref: A/00163 Page 123
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.38
A brief review of recent employment growth patterns within the North West shows that whilst growth has been experienced in all sub-regions and in a majority of districts, it has also been geographically focussed on a number of employment growth ‘hot-spots’ around the region. Between 1999 and 2003 the total number of jobs in the region grew by 150,000. Over half (53%) of this net increase is accounted for by just 7 of the region’s 43 districts (Manchester, Sefton, Knowsley, Rochdale, Liverpool, Preston, St Helens)59. By far the largest net increase occurred in Manchester (21,000 jobs, 8% growth), driven by strong growth in Manchester City Centre. In Greater Merseyside, 4 of the 6 districts were in the top 7, including Liverpool and Knowsley.
6.39
An analysis of Census 2001 data shows that there are strong flows of commuters between sub-regions in the North West. Table 6.7 shows the net outflows from each sub-region (Section 4 presents a wider discussion of the external linkages which the North West has with other regions). This shows that the strongest flows are from Cheshire and Lancashire into Greater Manchester, and from Greater Merseyside into Cheshire. Of course, most workers will commute to work within the sub-region in which they reside. Table 6-7: Net Outflows of Workers by Sub-Region Origin Cheshire & Warrington Cumbria Greater Manchester Greater Merseyside Lancashire NW Total
Cheshire & Warrington
Cumbria
Destination Greater Manchester
Greater Merseyside
Lancashire
NW Total
0
-83
10,428
-5,075
-1,706
3,564
83
0
347
62
585
1077
-10,428
-347
0
-3,227
-10,396
-24,398
5,075
-62
3227
0
-3,095
5,145
1,706
-585
10,396
3,095
0
14,612
-3,564
-1,077
24,398
-5,145
-14,612
0
Source: ONS, Origin and Destination Statistics, Census 2001 Note: these are net outflows and are the sum of inflows and outflows
6.40
As in all regions almost 3 in 5 (58.4%) people in the North West travel to work in their own private car, falling to 54.8% in Merseyside and rising to 64.8% in Cheshire (see Table A6.4 in appendix). Public transport usage is greatest in Greater Merseyside and Greater Manchester, buoyed by the relatively good bus networks and by heavy rail (e.g. Merseyrail) and light rail (Metrolink) transport systems.
6.41
The economic and employment growth experienced in recent years (in the region and UKwide) has resulted in both increased car ownership and an increase in the number of trips made by all modes within the region. Table 6-4 above shows the percentage increase in traffic on major roads (motorways and A-roads) between 1993 and 2003, with volume in the North West rising by 21.3%. In addition, excluding London, whilst residents of the North West travel the least miles per year on average of any region and cover the lowest proportion of total distance travelled by private car (see Table A6.5 in Appendix A), they tend to make more short local journeys by car than those in many other regions (Table A6.6 in Appendix A).
59
Section 5 also looked at the location of this employment growth amongst the most deprived districts within the region
Ref: A/00163 Page 124
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.42
As a result of this increase in traffic, congestion has become a growing problem in the North West and across the UK. Congestion in the North West is second only to that in London and the South East, with 9.3 seconds per vehicle per kilometre travelled lost during weekday morning peak hours. Congestion is not equally distributed and is most acutely felt in and around key employment centres such as Manchester city centre and on parts of the M56, M60 and M62 around Manchester, as well as some locations around Liverpool, Warrington, Preston and Chester.
6.43
Further economic and employment growth is likely to result in further rises in congestion, particularly given the possible scale and concentration of employment growth in the major conurbations and even with some shift in the type of travel used. This is due to increased employment levels but also an increase in skill levels. Also, the evidence suggests that higher occupational groups on average have greater travel to work times (see Table A6.4 in Appendix A). The analysis in Section 4 points to an upward shift in skill levels which is likely to be accompanied by increased mobility and travel to work times.
6.44
This could reduce employment accessibility and constrain the region’s competitiveness, making it harder for businesses to move goods around and through the region and harder for people to reach employment. There is already evidence of local traffic conflicting with traffic on strategic routes, for example in north Greater Manchester on the M60/ M62. Clearly, there remains a pressing need to encourage a shift in particular from car to public transport (but also to cycling and walking, although there is less scope to achieve this shift). However, rail services have already absorbed a significant proportion of the increase in travel and on many key strategic routes services are close to existing capacity at peak hours.
6.45
Partners in the region are working towards securing a number of important investments in public transport infrastructure (for example improvements to the Manchester rail hub, electrification of the Manchester-Preston-Blackpool and the Wrexham-Bidston (Borderlands) railway, extension of Metrolink and the Merseytram proposals). However, given the resource-constrained environment for public transport improvements and the potential scale of the congestion and accessibility problem in the region, a number of other solutions could be introduced (and some progress is already being made, such as measures to improve the capacity of the M6). These include encouraging the more widespread adoption of more flexible working patterns (including use of ICT to enable homeworking) to reduce peak hour intensity, more intensive management of the strategic and local road networks in order to maximise capacity at peak times, as well as rationing capacity.
ICT Infrastructure Broadband availability in the North West is almost universal… 6.46
Good ICT infrastructure is increasingly vital for any economy. Businesses and citizens need to be able to access and share data in a variety of forms quickly and reliably. As broadband (512 mb per second and faster) becomes increasingly dominant and new services and technologies evolve to exploit this connectivity it is vital that the region’s businesses and citizens keep pace. E-commerce (selling goods and services over the internet) continues to expand dramatically and E-business (for example, supply chain management and integration) is increasingly the norm for many companies. If the region’s SMEs are to seize opportunities (or even just defend their current positions) they will need to embrace broadband. The ICT Business Survey 2004 commissioned by NWDA found that 40% of businesses already used broadband.
Ref: A/00163 Page 125
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.47
With the exception of a small number of (primarily) rural areas broadband is now available in all parts of the region (including via wireless means). NWDA and other partners have supported projects that have helped to demonstrate demand across the region and the rate of investment required to meet this demand has accelerated dramatically in recent years. Exchanges serving approximately 98.8% of the region’s residents are broadband enabled (whilst in some other rural areas wireless broadband is available) compared to 95% across the UK. BT is planning to extend this provision by enabling further telephone exchanges to serve approximately 99.6% of all North West homes by Summer 2005. In the largest conurbations of Greater Manchester and Greater Merseyside coverage is already at 100%. … but the region still has some major ICT weaknesses
6.48
BT and the NWDA have been working in co-operation with the North West to advise SMEs on how to make the most of the opportunities presented by broadband (as have other partners in the private and public sectors). However, the ICT Business Survey highlighted issues of weak adoption and low-level usage of ICT in the region (and as these are primarily business development issues, they are considered in more detail in Section 4). Clearly one of the key challenges is now encouraging the appetite for, and adoption of, ICT resources and practices amongst the region’s businesses. This focus forms the backbone of the regional ICT strategy, which has recently been adopted.
6.49
The skills profile of the North West is expected to change significantly in the coming years, with increasing numbers of more highly qualified people in the workforce. Given the greater mobility of skilled workers this is likely to result in increased commuting around the region, with implications for levels of congestion. More and better use of ICT can play a significant role in efforts to counter traffic volumes, enabling greater use of home-working.
Environment The Environment of the North West is a key economic asset… 6.50
Environment and Economy are inextricably linked. Changes in one can have profound implications for the other, with this change occurring sometimes slowly and almost unnoticed, and sometimes occurring in a more dramatic fashion (for example, flooding).
6.51
Environmental quality is of fundamental importance to the economy of the North West. The environment supports primary industries such as agriculture but is also at the centre of much of the region’s tourism industry. Perhaps most important is the role that the quality of the environment in the North West plays in shaping the image of the region as a place to live, work and visit. As the North West competes to attract and retain investment and skilled workers it is these aspects of quality of life that are increasingly important factors (this was addressed from a broader perspective in Section 5). … but the region’s performance is mixed…
6.52
Here we provide a brief overview of a selection of environmental indicators. A full examination of the region’s environmental position and performance can be found in the environmental report prepared alongside this economic analysis to inform the update of the RES.
Ref: A/00163 Page 126
North West Economic Baseline: Final Full Report – Infrastructure and Image
Air Quality 6.53
Emissions of Nitrogen Oxides (NOx gases) and Sulphur Oxides (SOx gases), both major pollutants from industry and major installations regulated by the Environment Agency, have fallen significantly in recent years (a 10% and 34% reduction respectively - see also Table A6.6 in Appendix A). However, these reductions have been countered by the growth in emissions associated with road vehicles. As we noted above (see paragraph 6.40), residents of the North West travel the fewest miles per year on average of any region and cover the lowest proportion of total distance travelled by private car, but make more short local journeys by car than those in many other regions (Table A6.8 in Appendix A).
River Water Quality 6.54
The North West has seen major improvements in river water quality in recent years, particularly given the relatively strong manufacturing (for example, chemicals) presence in the region (see Table 6-8). Although still below national averages for river lengths of good or fair quality, the North West’s river water quality is now considerably improved. Progress in the chemical composition of river water has been particularly strong and is very likely to be related to the reduction in pollution incidents discussed below. Whilst improvements have been made to the biological quality of river water, the North West still has some significant way to go before it reaches national average standards.
Table 6-8: River Water Quality (Good or Fair) Chemical Quality 1990
2002
Change (% points)
Biological quality 1990
2002
Change (% points)
North East
90%
97%
7%
91%
98%
7%
North West
70%
91%
21%
69%
86%
17%
Yorkshire and the Humber
76%
90%
14%
81%
90%
9%
East Midlands
79%
97%
17%
93%
96%
4%
West Midlands
82%
94%
12%
91%
92%
1%
East of England
82%
92%
11%
96%
99%
2%
London
71%
87%
16%
65%
82%
17%
South East
84%
94%
10%
95%
99%
4%
South West
93%
97%
4%
97%
99%
2%
England
84%
94%
10%
89%
95%
5%
Source: Environment Agency of England and Wales
Pollution Incidents 6.55
The total number of pollution incidents (air, land and water) in the North West has fallen significantly in recent years, although the small number of Category 1 (the most serious of the four categories) and category 3 incidents (less serious) are prone to greater fluctuation from year to year.
Ref: A/00163 Page 127
North West Economic Baseline: Final Full Report – Infrastructure and Image
Table 6-9: Pollution Incidents in the North West Air 2000
Land 2003
2000
Water 2003
0
2
2000 0
2003
Cat 1
6
9
7
Cat 2
130
20
45
28
86
80
Cat 3
523
664
1,242
1,155
1,662
1,445
Cat 4
4,412
2,453
3,782
1,954
3,314
1,604
Total
5,071
3,137
5,071
3,137
5,071
3,136
Source: Environment Agency of England and Wales
Waste & Recycling 6.56
Residents in the North West generate the greatest amount of household waste per person. In 2002-03 residents produced an average of 581 kg compared to a national average of 521 kg. This important waste stream is also growing rapidly, rising 15% since 1998-99 compared to 8% in England, the fastest increase of any region. Although the region has secured a major increase in the proportion of this waste recycled or composted, the proportion of household waste that is recycled or composted (11%) is below the English average (14%) and significantly lower than those of the best performing regions (South East 20% and East of England 19%). Table 6-10: Household Waste and Recycling Total household waste1 (kg/person/year) 1998/9
2002/3
Change
Household waste recycled or composted1 (kg/person/year) 1998/9
2002/3
Change
North East
469
548
17%
17
36
107%
North West
506
581
15%
30
65
115%
Yorkshire and the Humber
477
507
6%
29
58
101%
East Midlands
494
525
6%
42
80
89%
West Midlands
463
508
10%
32
66
105%
East of England
491
520
6%
58
101
73%
London
463
462
0%
35
50
42%
South East
490
529
8%
65
104
59%
South West
493
529
7%
67
99
47%
England
482
521
8%
44
76
73%
Source: Department for Environment, Food and Rural Affairs
6.57
The North West is relatively dependent upon land disposal as a means of managing Commercial and Industrial Waste Streams. In 1998/99 48.5% of this waste went to land disposal compared to 46.2% in England & Wales, with Greater Manchester and Cumbria having particularly high dependency on this method. Commercial and Industrial waste also presents significant disposal and treatment issues in the region. However, these waste streams and household waste streams also present considerable business development opportunities.
Ref: A/00163 Page 128
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.58
For the environment, economic growth within the North West has been something of a twoedged sword. For example, increased economic growth leads to increased movement of goods and people, resulting in higher vehicle emissions. All things being equal this will reduce air quality and increase carbon dioxide emissions and those of other gases associated with climate change. Sustainability North West report that the region’s residents use more energy per head than any other region.
6.59
Again, all things being equal, increased economic activity amongst firms and increased consumption amongst residents will result in greater waste and energy use. However, economic growth also enables greater investment in newer, cleaner technologies and processes. This is very much the story of the North West in recent years, with reductions in emissions from industry being offset by increases in vehicle emissions. Balancing these economic, environmental and also social agendas lies at the heart of the sustainable development challenge.
6.60
There are a number of key environmental issues which will need to be addressed over both the short and long terms. Whilst many important actions are beyond the scope of regional partners (for example, whilst significant progress in reducing carbon gas emissions can be achieved locally, the scale of the problem makes it a global issue), there are important actions that can be taken regionally. These include: • Flooding and flood risk – the flooding in Carlisle in January 2005 highlighted the risks associated with flooding. As such events become more frequent, partners in the region will need to ensure that the management of these risks is brought to the fore. Amongst the many implications of this is the desire to ensure that where new development occurs in atrisk areas, there is adequate mitigation of these risks. • Tackling waste streams – Handling household waste in particular represents a major challenge to the region – North West residents already produce the most household waste per person and this has been growing faster than in other regions. A lower proportion of this waste is recycled. • Construction – the North West, like other regions, has been experiencing a significant upturn in construction activity. A proportion of this can be attributed to economic development and regeneration activity. Looking forward, it is important that partners seek to minimise adverse impacts arising from the construction process and to ensure that high environmental standards (design, materials, and energy efficiency) are promoted. • Protecting and enhancing sensitive environments – many of the region’s sensitive environments (for example SSSIs, Lake District National Park) are at risk and require careful management in order to protect and enhance them. The agricultural sector has an important role to play in this regard. • Diffuse water pollution – the Environment Agency and partners (including those in the private sector) have been successful in managing pollution risks at major sites and installations. However, diffuse water pollution (that which enters bodies of water and groundwater via run-off from a wide range of sources, for example chemicals used in agriculture, oil and solvents from smaller commercial and industrial sites) remains a major problem. Intensification of agriculture and increased urbanisation have exacerbated this problem.
Ref: A/00163 Page 129
North West Economic Baseline: Final Full Report – Infrastructure and Image • Agriculture – recognising the role of agriculture as an important determinant of the landscape quality across a very large part of the region and adopting actions which encourage the sector to play a greater role in protecting this asset.
Image The region’s image is improving both as a place to live and do business..... 6.61
The available evidence suggests that the image of the region internally and externally has improved, both as a place to live and to invest. The findings of a recent NWDA commissioned Mori survey60 were generally positive and suggested: • UK residents are now more likely to think of the region as a ‘success’ than a ‘failure’ compared to three years ago (34% and 15% respectively, compared to 22% and 22% in 2001). The countryside, friendly people and Lake District are considered as key strengths by residents both inside and outside the region. • Residents and opinion leaders in the North West are very positive about the quality of life in the region and this has improved slightly since 2001. North West and UK opinion leaders continue to view the region as either the same as or better as a place to live than elsewhere in the UK or Europe. • It is reassuring that North West businesses view the region as a better place to do business than elsewhere in the UK. Businesses and opinion leaders from outside the region generally view it as a good business location (62% stated good compared to 17% poor). But in comparison to other business locations, it is not viewed as favourably by businesses from outside the region (24% stated it was worse compared to 20% stating it to be better), although opinion formers had a much more positive view (50% stated better compared to 6% worse). • The factors which businesses viewed as important but which the region did not score so highly on compared to other locations were the costs of premises, the strength of the local economy and the image of the region. • Greater Manchester and Lancashire tended to be viewed more favourably as business locations by businesses both from the North West and elsewhere in the UK (though the success of Cheshire as a business location is clearly evident). This included the availability of sites and premises, inward investment potential, availability of workforce, and business operating costs. However, Cumbria and Cheshire scored particularly well on quality of life. • In terms of the change which has occurred within the region as a business location and anticipated future improvements, the findings are very positive. However, there is a major discrepancy amongst NW and UK opinion formers (although it is based on a small sample) – 80% of north West opinion formers thought there had been an improvement compared to 30% of those in the rest of the UK (20% thought there had been a deterioration).
60
Perceptions of England’s North West 2003, NWDA, February 2004; the survey covered residents, businesses and ‘opinion leaders’ both in the North West and elsewhere in the UK.
Ref: A/00163 Page 130
North West Economic Baseline: Final Full Report – Infrastructure and Image • The key reasons cited for this improvement are associated with the improved image for the region, in part achieved through the Commonwealth Games, the regeneration of major locations such as Manchester and Liverpool, and the growing confidence in the region as an investment location in part as a consequence of the region’s improved economic performance. 6.62
In summary, we believe the improvement in perceptions has been driven in part by the regeneration of the region’s major cities and their rising profile, including the successful hosting of major events such as the Commonwealth Games, as well as quality of life, cultural and leisure opportunities available. The attractiveness of the environment in and around the region – such as the Lake District and our historic towns and cities (such as Chester) remains an important attractor of in-migrants and inward investment, as does the vibrancy of Manchester and Liverpool. The strong economic performance which the region has experienced in recent years has, we believe, also played a part. …whilst the region has fallen short in its ability to present a contemporary image, things are improving….
6.63
However, the region falls short in its ability to present a contemporary image as a modern, knowledge driven economy. The Mori study found that the industry sector which UK based businesses most associated with the North West is textiles (15% of respondents). The region’s image is not driven by its knowledge assets or high-tech industries - local cultural, creative and leisure industries form much more salient points of reference. Despite regeneration led improvements to the region’s image, problems do remain and parts of the region still suffer from associations with industrial decline, crime and poor environment.
6.64
Nevertheless, there are positive developments on which the region can build including: •
Liverpool Capital of Culture in 2008;
• The BBC's proposed relocation of national networks and commissioning functions to Manchester; • The proposed re-investment and rejuvenation of Blackpool (still with the UK’s most visited attractions); • Revitalising of the main city centres and improved visitor and cultural offerings – Greater Manchester is now the third most visited location by international visitors in the UK (740,000 visitors recorded by the International Passenger Survey and growth of 32% between 2000 and 2003), whilst Liverpool was ranked joint 9th in 2003 with Brighton). Tourism has a wider significance to the region, but has the potential to be a greater driver of economic prosperity and dynamism… 6.65
The tourism and cultural industries in the North West have an importance to the region beyond their generation of GVA and provision of employment. These sectors are also very important in terms of the image which they present to the ‘outside’ world and in helping to inform the external perceptions of the region. The performance of the sector is very variable, combining strong and high quality brands and products together with other parts of the sector which are of poor quality and often declining. The region’s tourism strategy highlights the four “star” brands of Liverpool, Manchester, Chester and the Lake District and with Blackpool as a development brand.
Ref: A/00163 Page 131
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.66
An examination of tourism data for the region highlights some aspects of the performance of the sector within the region. The North West’s share of total tourism expenditure within England in 2003 (see Table 6-11) was £3.27bn61 (£480 per head of population) or 10.5% of the total (14.9% if London is excluded). This compares to its share of population of 13.6% (16.0% excluding London). Of the English regions, it has the greatest share of tourism outside of London, the South East and South West.
6.67
The region does well in capturing UK visitor tourism (13% of the England total or 15% if London is excluded), although this has declined by 6% over the period 2000-03. Whilst the region’s UK visitors tends to be dominated by its nearest geographical markets (as would be expected), as a whole it also does fairly well in attracting visitors from the large markets in London and the South (see Table 6-12). However, some of the region’s key tourism areas such as the Lake District do far less well in attracting visitors from markets in the South. Table 6-11 NW Volume and Value of Tourism English Regions Trips (m) 2003
Spend (£m) 2003
% of England Spend Total
North West
17.8
3,226
10%
East Midlands
12.8
1,643
5%
Area
East of England
13.6
2,246
7%
London
26.0
9,083
29%
North East
5.3
1,038
3%
South East
24.3
4,294
14%
South West
24.7
4,928
16%
West Midlands
12.5
2,204
7%
Yorkshire and the Humber
14.0
2,224
7%
146.2
30,960
100%
England
Note: The sum of all regions does not equal the total England figure due to rounding. Source: UK Tourism Survey (StarUK), International Passenger Survey (Visit Britain)
6.68
It is also important to understand that the characteristics of Visitors who come to the North West. Using both UK domestic and international statistics it is clear that almost 50% of visitors to the region come to the region as part of a holiday/leisure activity. Over a fifth of visitors (22%) come to the region to visit friends and relatives, whilst a further 11% visit friends and relatives but mainly as a holiday. Business visitors are the third largest group of visitors to the region accounting for almost 14% of all visitors.
6.69
The region performs relatively poorly in capturing international tourism (5.9% of the total and 13.4% of the total excluding London). Whilst Manchester and to a lesser extent Liverpool have benefited from improved international flight connections (they are now ranked 3 and 9th in terms of international visitors), other parts of the region such as Cumbria don’t fare particularly well.
61
Since 2002, the NWDA has also used the Steam Model to derive tourism estimates for the region. This
approach suggests that the value of tourism in 2002 was £6.6m and in 2003 £6.9m (an increase of 4.6%). The lack of regional comparisons for the North West estimates derived from Steam means that we have not drawn extensively on the data within this report.
Ref: A/00163 Page 132
North West Economic Baseline: Final Full Report – Infrastructure and Image
Table 6-12 % Value of NW Tourism Value by UK Region of Origin 2003 NW Domestic Tourism
Region
£m
%
Northern Ireland
26.2
1%
Wales
78.5
4%
East Midlands
156.9
8%
East of England
156.9
8%
North East
156.9
8%
South West
156.9
8%
London
209.2
11%
Scotland
209.2
11%
South East
235.4
12%
West Midlands
261.5
14%
Yorkshire & the Humber
287.7
15%
1,935.1
100%
Total NW Tourism (excl. originating in region) Note: This only uses the UKTS data, not IPS Source: UKTS StarUK
6.70
Whilst there is the need for caution in considering time series data, as the conclusion can differ significantly depending upon which period is considered, it nevertheless illustrates some broad trends. Whilst between 2000 and 2003 the overall value of tourism within region has remained fairly static overall, has been successful in capturing a greater volume and value of international tourism (rising from £500m to £611m or +22%). Scotland could be an aspirational comparator for the region’s tourism sector – however, the value of the total tourism sector in the North West is equivalent to just 3.2% of the region’s GVA compared to 5.7% for Scotland.
6.71
North West tourism also benefits from the prominence in the region of both Manchester and Liverpool airports. These two airports act as key gateways to the region both domestically and internationally. Over 16.4 million passengers used Manchester Airport in 2003 which accounted for approximately 69% of all passengers using North of England Airports. Liverpool John Lennon Airport had 2.4 million passengers over the same period accounting for over 10% of all passenger activity in the airports in the North of England. Both airports act as key gateways for the region handling over 78% of the North of England air transport passengers and approximately 12% nationally. (CAA Statistics 2003).
6.72
Given the importance of the sector within the region it is important that its quality and reach can be enhanced and that it is able to make a greater contribution to facilitating economic growth. The main issues for the region are: ¾
Raising the quality of the region’s tourism offer in general, especially around some of the region’s higher profile destinations (such as Liverpool, Manchester and the Lake District), including improvements in the quality of key tourism attractions, the visitor infrastructure (hotels, restaurants, etc.) and customer care standards;
¾
Securing a higher proportion of international visitors;
¾
Attracting more high value business tourism, which is in a large part driven the development of the region’s conferences and events offer (see Table 6-13 below);
Ref: A/00163 Page 133
North West Economic Baseline: Final Full Report – Infrastructure and Image ¾
Improving the performance of those parts of the region in which tourism is a relatively important part of their overall employment prospects – The Lake District is heavily dependent upon tourism but currently performs poorly in attracting visitors from outside the North of England.
The region’s ability to host major events is an important opportunity…. 6.73
The ability of the region to host major events is important for a variety of reasons. The first is the obvious direct and indirect economic benefits which these events can secure for the region. These benefits include the support for employment and creation of GVA, as well as trade and business development. In addition, there are range of wider, less tangible benefits which can be secured including the enhancement of image, community development and civic pride.
6.74
Holding a major event, convention or exhibition in the Northwest may provide free, short term publicity for the area. Publicity may also enhance awareness of the destination and present a favourable image to potential visitors and investors. This in turn can secure increased visitor numbers and investment over the longer term. Although it can be difficult to quantify the benefits, the research examining the impact of the Commonwealth Games highlighted some significant benefits62: • 6,300 direct FTE jobs were attributable to the games, of which 2,900 were additional direct and indirect jobs in Manchester •
Tourism spend attributable to the Commonwealth Games was approximately £29m
• Over 50,000 room nights were sold to games visitors, more than twice the expected number • National and International press and TV coverage reached millions of people worldwide. 6.75
The region has an excellent track record of regularly hosting highly successful major events, especially in sporting events such as the Grand National and the Open Golf Championships. This reputation has been enhanced by the hosting of one off events such as the Commonwealth Games and the development of its track record for major conferences (such as the Labour Party Spring Conference in 2004) and trade events. The result is that the region has a high level of credibility with national government, as well as with organisations holding the rights to national and international events.
6.76
The region therefore has an excellent platform on which to build its major events, although it has in the past been hampered by a lack of suitable facilities for major conference and trade events and the absence of a coordinated regional approach. However, recent investment has significantly improved facilities and the planned £300m King’s Dock Development in Liverpool (including a 1,500 capacity convention centre and a 9-10,000 seat indoor arena) and £400m investment planned for the Blackpool Renaissance will further improve the situation. The region also has an agreed events strategy and this will provide the way forward for securing major events, prioritising the investment in infrastructure and maximising the economic and image benefits which can be gained.
62
Cambridge Policy Consultants – Revised Executive Summary: The Commonwealth Games 2002, A Cost and Benefit Analysis
Ref: A/00163 Page 134
North West Economic Baseline: Final Full Report – Infrastructure and Image 6.77
Looking to the future, the Capital of Culture is, like the Commonwealth Games before it, an excellent opportunity to raise the profile of the region internationally and that of Merseyside. An economic impact assessment commissioned by Liverpool City Council concluded that the event had the potential to more than double tourism spend within Merseyside by 2012 (increasing from £261 to £571m) and creating an extra 13,200 jobs. Clearly the challenge for the region is to ensure that the hosting of Capital of Culture can provide long term sustainable benefits in terms of increased tourism and related employment, improved image and perceptions, and that the benefits can be shared across other parts of the region. This includes enabling people in disadvantaged communities to gain employment and to improve their long term prospects.
Post 2005
Pre 2005
Table 6-13 Selected Recent and Future Major Events In the North West Business Conferences
Sporting
CBI National Conference, Manchester (24-26 November 2002) Labour Party Spring Conference, Manchester (12-13 March 2004) SeaTrade Cruise UK Workshop, Liverpool (January 2005)
British Open: Royal Lytham & St Annes (July 2001) Track Cycling World Cup Classic, Manchester (April 2004) European Cup Final (May 2003)
Full Labour Party Conference, Manchester (September 2006) Society of American Travel Writers Conference, Manchester (October 2007)
Royal Liverpool (July 2006) Royal Birkdale (July 2008) Current Bid for World Swimming Championship (Manchester 2008)
Cultural Liverpool Biennial, (November 2004)
European Capital of Culture 2008 SeaBritain Regionwide 2005 Clipper Round the World Yacht Race, Liverpool 2005-6, 2007-8 Tall Ships’ Race, Liverpool (July 2008)
Source : North West Events Strategy, NWDA, 2003
The region is rich in cultural assets although they have not always been fully exploited… 6.78
The region is very rich in its cultural, heritage and environmental assets. These assets are to some extent a function of the region’s economic and social history and are a vital part of its character, vibrancy and future success. Needless to say, these assets are at the heart of the appeal of the region to visitors. But these assets are very diverse in their nature – a NWDA and North West Cultural Consortium report63 highlights this diversity: • Wonderful landscapes and countryside – the Lake District National Park, the Forest of Bowland, the rural farmlands of Cheshire and a network of urban parks across the region. • A strong tradition of sporting excellence and sporting facilities – Sports City in Manchester, internationally renowned football teams, strong networks of local clubs and leisure centres in a wide variety of sports.
63
The Cultural Strategy for England’s North West, NWDA and North West Cultural Consortium, 2001
Ref: A/00163 Page 135
North West Economic Baseline: Final Full Report – Infrastructure and Image • Extensive built heritage from Hadrian’s Wall to the network of industrial revolution buildings and canals, the great Victorian cities of Manchester and Liverpool and their museums, libraries and archives, market and county towns and the cathedrals of Carlisle and Chester. • A strong tradition in the creative arts from Wordsworth to Willy Russell, the Royal Exchange to the Theatre by the Lake in Keswick, street theatre and festivals from Queer Up North to Blackburn’s family Mardi Gras and Merseyside’s Brouhaha. • Excellent music activity of all kinds - the club culture tradition from the Hacienda to Cream, performers from the Beatles and Gomez to the Hallé and the Royal Liverpool Philharmonic, old and new traditions at the Royal Northern College of Music and Urban Strawberry Lunch performance group. • A growing creative and cultural industries sector from Granada and Mersey Television to a growing network of smaller film production companies, from software and games production companies to award winning furniture designers and craft-makers, all of whose work contributes to economic prosperity across the region. • Finally, as noted above, a sizeable tourism sector which is heavily dependent upon these assets in drawing visitors from elsewhere in the UK and overseas. 6.79
The sectors which are built around these assets are also important in terms of the employment they support and the wealth they create. Although now out of date, the Cultural Consortium estimated that in 2001 the region’s cultural sectors, in their broadest sense, employed around 300,000 people (9% of the region’s employee base). New investment is helping to enhance these assets for the benefit of the region….
6.80
The region’s cultural assets are central to the quality of life of residents (as well as the quality of experience for visitor) and influences the ability to attract and retain workers. The region has tended to perform more strongly in some aspects of its cultural assets and ‘offer’ (world class sporting activity and landscape) than others (built heritage which has tended not to be adequately protected or exploited for the region’s benefit). However, new investment is helping to build on the region’s strengths and to exploit some of the untapped potential – important investments include: • Reflecting the region’s rich built heritage and landscape quality respectively, Liverpool’s waterfront and Cumbria’s Lake District have been designated by UNESCO as World Heritage Sites; • Creation of a major new cultural area at Salford Quays (namely the Lowry and Imperial War Museum), as well as Liverpool’s success in its recent bid for Capital of Culture 2008; • The considerable investment in the region’s sporting infrastructure, including Sports City, a number of new stadiums across the region, and multi-use facilities (such as the MEN Arena in Manchester and the planned Kings Dock facilities); • The refurbishment and reopening of extensive lengths of the region’s canal network and waterways; • New visions and action plans to enhance the latest potential in the regions’ key historic towns and cities (e.g. Carlisle and Lancaster);
Ref: A/00163 Page 136
North West Economic Baseline: Final Full Report – Infrastructure and Image • The on-going investment in the creation of a series of regional parks, as well as NWDA and its partners’ investment in turning derelict land into urban forest
6.81
It should also be remembered that the region’s cultural assets are central to the quality of life of residents (as well as the quality of experience for visitor) and influence the ability to attract and retain workers.
Ref: A/00163 Page 137
North West Economic Baseline: Final Full Report – Infrastructure and Image
• Ref: A/00163 Page 138
NORTHWEST REGIONAL DEVELOPMENT AGENCY
NORTH WEST ECONOMIC BASELINE: FULL REPORT APPENDIX A: DATA TABLES
Note: the attached more detailed tables have been produced to accompany the economic baseline report. They are structured in order of the sections in the Baseline Report
July 2005 Regeneris Consulting 1-5 The Downs Altrincham WA14 2QD Tel: 0161 926 9214 Fax: 0161 926 8545 Web: www.regeneris.co.uk
North West Economic Baseline – Appendix A Data
Section 3 Economic Overview - Tables and Charts Table A3.1: Gross value added (GVA) by NUTS2 area at current basic prices Year Total GVA £ms, current
1995
1996
1997
1998
% change 1999
2000
2001
2002
1995-1998
1998-2002
1995-2002
basic prices UNITED KINGDOM North West
639115
679526
719565
761539
797116
838490
881163
926275
24.7%
16.2%
44.9%
66848
69962
73555
77291
80317
83270
87720
92251
20.1%
14.9%
38.0%
Cumbria
4920
5059
5146
5384
5238
5255
5235
5524
6.5%
5.5%
12.3%
Cheshire
11824
12471
13584
14213
14344
14612
16285
17162
21.3%
19.6%
45.1%
Greater Manchester
25381
26899
28543
29645
31977
32848
34814
36034
26.0%
12.7%
42.0%
Lancashire
13787
14392
14510
15131
15776
16675
17322
18088
14.4%
14.7%
31.2%
Merseyside England
10936
11142
11771
12917
12982
13880
14064
15443
18.7%
19.0%
41.2%
529959
562368
599231
638802
668857
698369
736233
776107
26.2%
16.0%
46.4%
£ per head 000s UNITED KINGDOM
11.02
11.68
12.34
13.02
13.58
14.24
14.91
15.61
23.3%
15.0%
41.8%
UK less extra regio
10.79
11.40
12.09
12.81
13.34
13.86
14.54
15.27
23.7%
14.5%
41.6% 38.9%
North West
9.79
10.27
10.83
11.38
11.86
12.29
12.95
13.60
21.1%
14.7%
Cumbria
10.11
10.39
10.54
11.01
10.73
10.78
10.73
11.33
6.2%
5.5%
12.0%
Cheshire
12.12
12.76
13.87
14.47
14.63
14.88
16.55
17.42
20.7%
19.0%
43.7%
Greater Manchester
9.99
10.63
11.32
11.76
12.71
13.05
13.84
14.29
27.2%
12.4%
43.0%
Lancashire
9.75
10.19
10.28
10.71
11.18
11.79
12.22
12.71
14.7%
13.7%
30.5%
Merseyside
7.75
7.95
8.45
9.32
9.42
10.10
10.28
11.31
21.5%
20.1%
45.9%
10.95
11.59
12.31
13.09
13.64
14.19
14.89
15.63
24.5%
14.6%
42.7%
North West
91
90
90
89
89
89
89
89
Cumbria
94
91
87
86
80
78
74
74
112
112
115
113
110
107
114
114
England (UK less Extra-Regio=100)
Greater Manchester Lancashire
93
93
94
92
95
94
95
94
Cheshire
90
89
85
84
84
85
84
83
Merseyside England
72
70
70
73
71
73
71
74
102
102
102
102
102
102
102
102
Source: ONS Crown Copyright ©, NUTS 2 Tables 1-12 Regional Gross Value Added Estimates December 2004. Note: workplace based GVA, current basic prices
Ref: A-163 Page 2
North West Economic Baseline – Appendix A Data
Table A3.2: Gross value added (GVA) £ms by NUTS3 area at current basic prices Total GVA £ms by Year
% change
1995
1996
1997
1998
1999
2000
2001
2002
66848
69962
73555
77291
80317
83270
87720
92251
20.1%
14.9%
38.0%
4920
5059
5146
5384
5238
5255
5235
5524
6.0%
6.5%
5.5%
12.3%
West Cumbria
2245
2362
2409
2585
2465
2408
2371
2416
2.6%
9.8%
-2.0%
7.6%
East Cumbria
2676
2697
2738
2799
2773
2847
2864
3108
3.4%
3.6%
12.1%
16.1%
North West
Cumbria
Cheshire
Share of NW, 2002
19951999
19992002
19952002
11824
12471
13584
14213
14344
14612
16285
17162
18.6%
21.3%
19.6%
45.1%
Halton and Warrington
3637
3867
4260
4589
4428
4643
5127
5346
5.8%
21.7%
20.7%
47.0%
Cheshire CC
8187
8604
9324
9624
9917
9969
11158
11816
12.8%
21.1%
19.1%
44.3%
25381
26899
28543
29645
31977
32848
34814
36034
39.1%
26.0%
12.7%
42.0%
Greater Manchester Greater Manchester South
15246
15755
18014
18684
20430
21365
22894
23593
25.6%
34.0%
15.5%
54.7%
Greater Manchester North
10135
11144
10529
10961
11547
11483
11920
12441
13.5%
13.9%
7.7%
22.8%
13787
14392
14510
15131
15776
16675
17322
18088
19.6%
14.4%
14.7%
31.2%
1497
1489
1485
1557
1550
1617
1609
1674
1.8%
3.5%
8.0%
11.8%
Lancashire Blackburn with Darwen Blackpool Lancashire CC
Merseyside East Merseyside
1276
1325
1278
1301
1415
1469
1418
1572
1.7%
10.9%
11.1%
23.2%
11013
11578
11748
12273
12811
13589
14295
14842
16.1%
16.3%
15.9%
34.8%
10936
11142
11771
12917
12982
13880
14064
15443
16.7%
18.7%
19.0%
41.2%
2370
2424
2564
2656
2659
3059
3093
3651
4.0%
12.2%
37.3%
54.1%
Liverpool
4395
4309
4755
5302
5392
5692
5626
6060
6.6%
22.7%
12.4%
37.9%
Sefton
2081
2236
2183
2289
2413
2519
2643
2890
3.1%
16.0%
19.8%
38.9%
Wirral
2090
2173
2270
2671
2519
2610
2703
2842
3.1%
20.5%
12.8%
36.0%
Source: ONS, Crown Copyright ©, NUTS 3 Tables 1-12 Regional Gross Value Added Estimates December 2004. Note: workplace based GVA, current basic prices, unconstrained estimates
Ref: A-163 Page 3
North West Economic Baseline – Appendix A Data
Table A3.3: Gross value added (GVA) £000 per head by NUTS3 area at current basic prices Year £000s per head GVA per capita
1995
England North West Cumbria
1996
1997
% change
1998
1999
2000
2001
2002
1995-1999
1999-2002
1995-2002
10.95
11.59
12.31
13.09
13.64
14.19
14.89
15.63
24.5%
14.6%
42.7%
9.79
10.27
10.83
11.38
11.86
12.29
12.95
13.60
21.1%
14.7%
38.9% 12.0%
10.11
10.39
10.54
11.01
10.73
10.78
10.73
11.33
6.2%
5.5%
West Cumbria
9.44
9.94
10.15
10.93
10.43
10.24
10.10
10.33
10.5%
-1.0%
9.4%
East Cumbria
10.75
10.82
10.91
11.09
11.01
11.27
11.32
12.25
2.4%
11.2%
13.9%
12.12
12.76
13.87
14.47
14.63
14.88
16.55
17.42
20.7%
19.0%
43.7%
Halton and Warrington
Cheshire
11.75
12.47
13.75
14.81
14.29
14.99
16.55
17.24
21.6%
20.7%
46.7%
Cheshire CC
12.29
12.89
13.92
14.32
14.79
14.83
16.55
17.50
20.3%
18.3%
42.3%
9.99
10.63
11.32
11.76
12.71
13.05
13.84
14.29
27.2%
12.4%
43.0%
Greater Manchester South
11.12
11.54
13.27
13.78
15.15
15.84
16.99
17.45
36.3%
15.2%
57.0%
Greater Manchester North
8.67
9.56
9.04
9.40
9.90
9.84
10.20
10.63
14.1%
7.4%
22.6%
9.75
10.19
10.28
10.71
11.18
11.79
12.22
12.71
14.7%
13.7%
30.5%
10.73
10.73
10.70
11.15
11.21
11.70
11.62
12.01
4.5%
7.2%
12.0%
8.53
8.98
8.78
9.03
9.90
10.27
9.97
11.06
16.0%
11.7%
29.6%
9.79
10.29
10.42
10.87
11.34
12.00
12.58
13.01
15.9%
14.7%
32.9%
7.75
7.95
8.45
9.32
9.42
10.10
10.28
11.31
21.5%
20.1%
45.9%
East Merseyside
7.17
7.34
7.78
8.06
8.09
9.32
9.43
11.15
12.9%
37.8%
55.6%
Liverpool
9.46
9.34
10.42
11.70
12.02
12.76
12.73
13.72
27.1%
14.1%
45.1%
Sefton
7.20
7.78
7.62
8.03
8.49
8.89
9.34
10.26
17.9%
20.8%
42.4%
Wirral
6.41
6.73
7.09
8.38
7.95
8.25
8.58
9.04
24.0%
13.8%
41.1%
Greater Manchester
Lancashire Blackburn with Darwen Blackpool Lancashire CC Merseyside
Source: ONS, Crown Copyright ©, NUTS 3 Tables 1-12 Regional Gross Value Added Estimates December 2004. Note: workplace based GVA, current basic prices, unconstrained estimates
Ref: A-163 Page 4
North West Economic Baseline – Appendix A Data
Table A3.4: Sub-Regional Shares of Productivity Output Gap, £bns 2002 Cumbria
Cheshire
Greater Manchester
Lancashire
Merseyside
All NW*
0.18 0.02 0.05 0.21 0.08 0.09
-1.48 0.12 0.27 0.05 0.05 0.28
0.84 -0.35 0.53 0.03 0.10 0.43
0.34 -0.05 0.39 0.29 0.01 0.24
0.66 0.03 0.16 0.37 0.09 0.21
-0.16 -0.73 1.25 0.98 0.45 1.40
Financial intermediation Real estate, renting and business activities
0.08 0.31
0.14 0.46
0.73 1.85
0.23 0.68
0.33 0.59
1.33 4.73
Public administration, defence, etc
0.07 0.01 0.04 0.11 1.23 6.20
0.10 -0.03 -0.01 0.18 0.13 0.29
0.34 -0.21 0.03 0.30 4.64 4.05
0.28 0.01 0.10 0.19 2.72 4.59
0.29 -0.12 0.09 0.27 2.98 5.41
1.29 -0.22 0.59 0.90 11.80** 3.95
Manufacturing Electricity, gas and water supply Construction Wholesale and retail trade Hotels and restaurants Transport, storage and communication
Education Health and social work Other services All Above
Per employee £000s Source: ONS GVA data current basic process unadjusted; ABI employees in employment (Crown Copyright ©) ,and Regeneris Consulting calculations Notes: (1) negative number are an output surplus compared to England average employee productivity in sector (2) sum of sector output gaps is different from total output gap for sub-region as this depends on mix of sector and the totals includes an adjustment for financial services (3) Estimates only must be treated with caution (4) * North West figure calculated from slightly different data sets and so the sub-regional totals do not sum to the North West total (5) ** the total productivity gap for the region is based on
Ref: A-163 Page 5
North West Economic Baseline – Appendix A Data
Table A3.5: GVA per employee and Productivity Gap, England = 100%, 2002 Sector
Manufacturing Electricity, gas and water supply Construction Wholesale and retail trade Hotels and restaurants Transport, storage and communication Financial intermediation Real estate, renting and business activities Public administration, defence, etc Education Health and social work Other services All Sectors*
Cumbria
Cheshire And Warrington
90% 88% 90% 80% 76% 81% 63% 63% 75% 98% 92% 67% 80%
149% 74% 76% 98% 92% 79% 86% 90% 83% 104% 102% 77% 105%
Greater Manchester
Lancashire
88% 173% 80% 99% 92% 89% 72% 81% 81% 109% 99% 85% 90%
93% 116% 76% 89% 98% 82% 67% 80% 76% 99% 93% 82% 88%
Merseyside
77% 80% 83% 84% 83% 85% 76% 85% 80% 110% 95% 73% 81%
All NW
101% 173% 81% 93% 88% 84% 77% 80% 77% 104% 92% 82% 89%
Source: ONS GVA data current basic process unadjusted; ABI employees in employment (Crown Copyright ©) and Regeneris Consulting calculations. Note: * excludes agriculture and total all sectors includes financial sector adjustment and so the sectors do not sum to the total
Ref: A-163 Page 6
Productivity Output Gaps £ms
-160 -734 1255 979 449 1401 1332 4732 1286 -224 589 896 11846
England less London and the South East =100% % Output Gap £ms 107% -1324 165% -684 86% 859 99% 188 92% 282 90% 787 88% 595 86% 3004 78% 1165 105% -293 96% 289 96% 189 94% 5666
North West Economic Baseline – Appendix A Data
Table A3.6: Gross Value Added by industry groups, current basic prices by region 1995 - 2002 1995 Sector
£ms
Agriculture, hunting, forestry & fishing Mining and quarrying Other mining and quarrying Manufacturing Electricity, gas and water supply
1996 £ms
1997 £ms
1998 £ms
1999 £ms
2000 £ms
2001 £ms
2002 £ms
1999 to 2002
Share
Growth £ms
NW %
% points % England difference
876
900
749
683
750
701
691
703
0.8%
-47
-6%
-6%
0%
27
29
24
21
22
58
66
37
0.0%
15
68%
-6%
74%
95
99
192
134
122
123
122
84
0.1%
-38
-31%
-12%
-19%
18888
19137
19560
18830
19617
19182
19338
19511
21.0%
-106
-1%
-3%
3%
1523
1723
1751
1667
1695
1678
1757
1727
1.9%
32
2%
-1%
3%
Construction
3423
3511
3881
3856
4178
4400
5100
5568
6.0%
1390
33%
34%
-1%
Wholesale and retail trade
8161
8870
9561
10480
10896
11081
11978
12237
13.2%
1341
12%
16%
-4%
Hotels and restaurants
1814
1997
2387
2571
2688
2824
2882
3186
3.4%
498
19%
18%
0%
Transport, storage and communication
5294
5135
5439
5857
6418
6719
6778
7388
8.0%
970
15%
13%
2%
Financial intermediation
2872
2804
2844
3353
3102
3087
3162
4384
4.7%
1282
41%
53%
-12%
10856
11837
13094
14787
15213
15985
17573
18925
20.4%
3712
24%
24%
0%
3073
3282
3442
3330
3660
3900
4012
4257
4.6%
597
16%
16%
0%
4025
4205
4243
4509
5095
5441
5914
6610
7.1%
1515
30%
22%
8%
Real estate, renting and business activities Public administration and defence Education
3
Health and social work
4872
5091
5182
5350
5685
6136
6437
6737
7.3%
1052
19%
21%
-3%
Other services
2522
2597
3018
3296
3429
3853
3709
4080
4.4%
651
19%
20%
-1%
FISIM4
-1601
-1487
-1460
-1938
-1927
-2311
-2241
-2701
-2.9%
-774
40%
51%
-10%
66722
69728
73907
76786
80645
82857
87280
92732
100.0%
12087
15.0%
16.0%
-1.0%
Total
Source: ONS, Crown Copyright ©, NUTS 1 Regional Gross Value Added Estimates December 2004. Note: workplace based GVA, current basic prices
Ref: A-163 Page 7
North West Economic Baseline – Appendix A Data
Table A3.7: Key Economic Changes, % Change 2000 to 2003, by Region North West No.
%
Regional Rank* 4th
Employees in Employment 145,000 5.1% (000s) GVA (£bns) current prices** £14.30 17.2% GVA per capita (£000)** 17.6% GVA per employee (£000)** 11.5% No. of Firms*** 7,214 4.5% Working Age Population (000s) 64 1.5% Total Population (000s) 30 0.4% Source: ONS Crown Copyright © Notes: * out of 9 regions **workplace based, current basic prices
4th 3rd 8th 4th 8th 8th
England
North East
%
%
Yorkshire & the Humber %
East Midlands
West Midlands
East of England
London
South East
South West
%
%
%
%
%
%
5.2% 20.4% 19.2% 14.4% 2.4% 2.0% 1.0%
1.6% 19.4% 17.0% 17.5% 4.1% 2.8% 2.0%
1.6% 14.8% 13.8% 13.0% 2.1% 1.6% 1.0%
3.9% 18.3% 16.4% 13.9% 2.4% 1.9% 1.6%
-3.8% 11.3% 9.0% 15.6% -1.1% 3.6% 2.1%
-0.8% 15.9% 14.6% 16.8% 4.9% 1.5% 1.1%
5.9% 19.8% 17.8% 13.1% 4.8% 2.3% 1.7%
1.8% 16.6% 15.0% 14.6% 2.6% 2.1% 1.3%
5.3% 16.7% 16.9% 10.9% 1.4% 0.6% -0.2%
(ONS December 2004) *** ABI, number of data units
Ref: A-163 Page 8
North West Economic Baseline – Appendix A Data
Table A3.8: Estimates of Employment Rates, Local Labour Force Survey, 1999/00 to 2003/4 Mar 1999-Feb 2000 Employment rate - 16+
Mar 2003-Feb 2004
Employment rate - working age
Total in Employment
Total Aged 16+
%
Total in Employment
Total Aged 16 to W/A
22,734,000
38,231,000
59.5
22,028,000
1,041,000
1,988,000
52.4
1,017,000
2,938,000
5,235,000
56.1
Yorkshire and The Humber
2,211,000
3,856,000
East Midlands
1,961,000
3,253,000
Area England North East North West
Employment rate - 16+
%
Total in Employment
Total Aged 16+
29,620,000
74.4
23,426,000
1,526,000
66.6
1,069,000
2,866,000
4,044,000
70.9
57.4
2,158,000
2,974,000
60.3
1,909,000
2,517,000
Employment rate - working age
%
Total in Employment
Total Aged 16 to W/A
39,114,000
59.9
22,600,000
30,295,000
74.6
1,991,000
53.7
1,046,000
1,526,000
68.5
3,066,000
5,293,000
57.9
2,977,000
4,090,000
72.8
72.6
2,312,000
3,931,000
58.8
2,242,000
3,032,000
73.9
75.8
2,008,000
3,345,000
60.0
1,937,000
2,572,000
75.3
%
West Midlands
2,390,000
4,096,000
58.4
2,319,000
3,163,000
73.3
2,425,000
4,160,000
58.3
2,342,000
3,192,000
73.4
Eastern
2,582,000
4,195,000
61.6
2,494,000
3,224,000
77.3
2,694,000
4,304,000
62.6
2,589,000
3,294,000
78.6
London
3,291,000
5,518,000
59.6
3,193,000
4,503,000
70.9
3,397,000
5,751,000
59.1
3,290,000
4,748,000
69.3
South East
3,991,000
6,237,000
64.0
3,837,000
4,809,000
79.8
4,039,000
6,371,000
63.4
3,869,000
4,901,000
78.9
South West
2,329,000
3,854,000
60.4
2,235,000
2,861,000
78.1
2,416,000
3,969,000
60.9
2,310,000
2,940,000
78.6
Wales
1,204,000
2,270,000
53.0
1,169,000
1,714,000
68.2
1,270,000
2,312,000
54.9
1,227,000
1,742,000
70.5
Scotland
2,280,000
4,013,000
56.8
2,220,000
3,118,000
71.2
2,367,000
4,043,000
58.5
2,295,000
3,126,000
73.4
Cumbria
325,000
534,000
60.9
315,000
411,000
76.8
335,000
538,000
62.3
322,000
409,000
78.6
Cheshire and Warrington
224,000
393,000
57.1
216,000
297,000
72.8
230,000
392,000
58.6
222,000
290,000
76.5
Greater Manchester
517,000
873,000
59.3
505,000
674,000
75.0
544,000
899,000
60.5
530,000
687,000
77.2
Greater Merseyside
325,000
534,000
60.9
315,000
411,000
76.8
335,000
538,000
62.3
322,000
409,000
78.6
Lancashire
224,000
393,000
57.1
216,000
297,000
72.8
230,000
392,000
58.6
222,000
290,000
76.5
Source: local area labour force survey, ONS Crown Copyright Š Note: sub-regional estimates subject to significant margin of error +/- 2% to 3% depending on the size of the sub-region
Ref: A-163 Page 9
North West Economic Baseline – Appendix A Data
Table A3.9: Estimates of Changes in Employment Rates, Local Labour Force Survey, 1999/00 to 2003/4 Employment - 16+ Change in Employed All England North East North West Yorkshire and The Humber East Midlands
% change
Employment – all of working age
Change in All Aged 16+
Change in Employment Rate
All of w/a
% points
% change
%
Change in Employed
Change in All Aged 16+
All Employed
% change
All of w/a
% change
Change in Employment Rate % points
%
692,000
3.0%
883,000
2.3%
0.4
0.7%
572,000
2.6%
675,000
2.3%
0.2
0.3%
28,000
2.7%
3,000
0.2%
1.3
2.5%
29,000
2.9%
0
0.0%
1.9
2.9%
128,000
4.4%
58,000
1.1%
1.8
3.2%
111,000
3.9%
46,000
1.1%
1.9
2.7%
101,000
4.6%
75,000
1.9%
1.4
2.4%
84,000
3.9%
58,000
2.0%
1.3
1.8%
47,000
2.4%
92,000
2.8%
-0.3
-0.5%
28,000
1.5%
55,000
2.2%
-0.5
-0.7% 0.1%
35,000
1.5%
64,000
1.6%
-0.1
-0.2%
23,000
1.0%
29,000
0.9%
0.1
Eastern
112,000
4.3%
109,000
2.6%
1.0
1.6%
95,000
3.8%
70,000
2.2%
1.3
1.7%
London
106,000
3.2%
233,000
4.2%
-0.5
-0.8%
97,000
3.0%
245,000
5.4%
-1.6
-2.3%
South East
48,000
1.2%
134,000
2.1%
-0.6
-0.9%
32,000
0.8%
92,000
1.9%
-0.9
-1.1%
South West
87,000
3.7%
115,000
3.0%
0.5
0.8%
75,000
3.4%
79,000
2.8%
0.5
0.6%
Wales
66,000
5.5%
42,000
1.9%
1.9
3.6%
58,000
5.0%
28,000
1.6%
2.3
3.4%
Scotland
87,000
3.8%
30,000
0.7%
1.7
3.0%
75,000
3.4%
8,000
0.3%
2.2
3.1%
Cumbria
6,000
2.7%
-1,000
-0.3%
1.7
2.9%
6,000
2.8%
-7,000
-2.4%
3.8
5.3%
Cheshire and Warrington
7,000
1.7%
4,000
0.6%
0.7
1.1%
2,000
0.5%
-3,000
-0.6%
0.8
1.1%
Greater Manchester
34,000
3.1%
20,000
1.0%
1.2
2.0%
26,000
2.4%
19,000
1.3%
0.8
1.1%
Greater Merseyside
50,000
8.8%
-2,000
-0.2%
4.4
9.0%
43,000
7.8%
13,000
1.5%
3.9
6.2%
Lancashire
35,000
5.6%
35,000
3.2%
1.3
2.3%
34,000
5.6%
25,000
3.0%
1.8
2.5%
West Midlands
Source: local area labour force survey, Crown Copyright © Note: sub-regional estimates subject to significant margin of error +/- 2% to 3% depending on the size of the sub-region
Ref: A-163 Page 10
North West Economic Baseline – Appendix A Data
Table A3.10: Sub-Regional Sectoral Employment Change, 1999 to 2003 Absolute Change 1999-2003
Cheshire
Cumbria
Greater Manchester
Greater Merseyside
Lancashire
North West
D : Manufacturing
-7.8
-3.7
-40.6
-13.7
-15.6
-81.5
E : Electricity, gas and water supply
-1.7
0.0
-4.4
-0.2
-0.6
-6.9
F : Construction
-1.3
0.6
4.8
2.8
6.5
13.3
G : Wholesale and retail trade; repair
0.0
8.2
1.4
4.7
1.0
15.4
H : Hotels and restaurants
0.6
3.1
10.5
8.3
3.8
26.3
I : Transport, storage and communication
2.2
1.0
17.1
3.1
1.7
25.1
-1.1
-2.0
-0.3
3.9
-1.5
-1.0
2.3
3.6
44.0
7.8
14.6
72.3
L : Public administration and defence
3.8
-0.2
-6.1
6.9
-0.1
4.3
M : Education
4.8
1.1
4.4
-0.6
15.2
24.8
N : Health and social work
5.8
4.6
12.6
15.8
6.8
45.6
O : Other community, social and personal service activities
0.4
2.2
8.6
1.6
2.8
15.6
J : Financial intermediation K : Real estate, renting and business activities
TOTAL
8.0
18.6
51.9
40.2
34.7
Cheshire
Cumbria
Greater Manchester
Greater Merseyside
Lancashire
D : Manufacturing
-12%
-8%
-21%
-17%
-12%
-16%
E : Electricity, gas and water supply
-47%
-6%
-69%
-17%
-23%
-48%
-5%
7%
9%
15%
28%
11%
G : Wholesale and retail trade; repair
0%
24%
1%
5%
1%
3%
H : Hotels and restaurants
2%
17%
17%
25%
10%
15% 16%
% Change 1999-2003
F : Construction
153.4 North West
I : Transport, storage and communication
10%
12%
25%
10%
6%
J : Financial intermediation
-6%
-39%
-1%
22%
-11%
-1%
3%
25%
28%
12%
30%
20%
L : Public administration and defence
27%
-2%
-10%
16%
0%
3%
M : Education
16%
7%
4%
-1%
35%
10%
N : Health and social work
17%
22%
11%
20%
10%
15%
2%
27%
17%
6%
12%
13%
2.0%
9.9%
4.6%
7.3%
6.3%
5.4%
-98%
-20%
-78%
-34%
-45%
-53% -5%
K : Real estate, renting and business activities
O : Other community, social and personal service activities TOTAL
Share of Net Growth D : Manufacturing E : Electricity, gas and water supply
-22%
0%
-9%
0%
-2%
F : Construction
-16%
3%
9%
7%
19%
9%
1%
44%
3%
12%
3%
10%
G : Wholesale and retail trade; repair H : Hotels and restaurants
8%
17%
20%
21%
11%
17%
27%
6%
33%
8%
5%
16%
J : Financial intermediation
-14%
-11%
-1%
10%
-4%
-1%
K : Real estate, renting and business activities
29%
19%
85%
19%
42%
47%
L : Public administration and defence
47%
-1%
-12%
17%
0%
3%
M : Education
60%
6%
8%
-1%
44%
16%
73%
25%
24%
39%
20%
30%
5%
12%
17%
4%
8%
10%
100%
100%
100%
100%
100%
100%
I : Transport, storage and communication
N : Health and social work O : Other community, social and personal service activities TOTAL
Source: ONS Annual Business Inquiry Crown Copyright Š
Ref: A-163 Page 11
North West Economic Baseline – Appendix A Data
Table A3.11: Change in Employees in Employment by size band and broad sector 1999-2003 North West, 000s of Employees, Size of Unit Sector Agriculture and fishing (SIC A,B) Energy and water (SIC C,E) Manufacturing (SIC D) Construction (SIC F) Distribution, hotels and restaurants (SIC G,H) Transport and communications (SIC I) Banking, finance and insurance, etc (SIC J,K) Public administration, education & health (SIC L,M,N) Other services (SIC O,P,Q) Total Total % All England %
1-10
11-49
50-199
200 or more
All
All North West
England
%
%
All
0.3
0.3
0.3
0.0
0.9
23%
-0.1
0.1
-1.6
-5.4
-7.0
-42%
10% -7%
-6.4
-9.1
-18.7
-47.2
-81.5
-16%
-17%
0.9
3.4
7.2
1.8
13.3
11%
3%
-7.0
20.3
28.6
-0.2
41.7
6%
6%
2.0
4.2
0.9
18.0
25.1
16%
3%
10.2
11.5
22.2
27.4
71.3
16%
7%
-4.3
13.7
31.4
33.8
74.7
10%
11%
1.1
2.3
7.7
4.6
15.6
13%
8%
-3.2
46.7
77.9
32.8
154.2
5.5%
3.5%
-0.6%
6.6%
12.1%
3.6%
5.5%
-1.4% 6.8% 9.6% -0.1% 3.5% Source: ONS, Annual Business Inquiry Š Crown Copyright Note: size relates to size of data unit, which broadly corresponds to a workplace. People working in a small data unit can and often are part of larger organizations (e.g. such as retailers),
Ref: A-163 Page 12
North West Economic Baseline – Appendix A Data Table A3.12: Class 1-1: Large Employers and Higher Managerial Occupations – Travel to Work Patterns 2001 Workplace Districts Sub-Region
Residence Districts Sub-Region
Cheshire & Warrington
Cheshire & Warrington
Cumbria
Greater Manchester
% of Sub-Region's Residents working in
Greater Merseyside
Lancashire
All North West
Non NW
Grand total
SubRegion
the rest of the North West
Outside the North West
13022
30
5392
3100
426
21970
3477
25447
51.2%
35.2%
31
6348
74
19
237
6709
261
6970
91.1%
5.2%
3.7%
Greater Manchester
2800
24
34513
1504
2012
40853
3039
43892
78.6%
14.4%
6.9%
Greater Merseyside
1624
21
1676
15433
809
19563
1254
20817
74.1%
19.8%
6.0%
554
149
3132
1195
18729
23759
1257
25016
74.9%
20.1%
5.0%
18031
6572
44787
21251
22213
112854
9288
122142
2603
106
4150
1195
937
8991
20634
6678
48937
121845
9288
122142
Cumbria
Lancashire All North West Non North West Grand Total
% of Sub-Region's Workers 63.1% 95.1% 70.5% resident in Sub-Region % of Sub-Region's Workers 24.3% 3.4% 21.0% resident in rest of the North West % of Sub-Region's Workers 12.6% 1.6% 8.5% resident outside the North West Source: Census of Population, 2001 Origin and Destination data Crown Copyright ©
22446
23150
68.8%
80.9%
25.9%
15.0%
5.3%
4.0%
Ref: A-163 Page 13
7.4%
13.7%
7.6%
North West Economic Baseline – Appendix A Data
Table A3.13: Class 1-2: Higher Professional Occupations – Travel to Work Patterns 2001 Workplace Districts Sub-Region
Residence Districts Sub-Region
Cheshire & Warrington Cumbria
Cheshire & Warrington
Cumbria
Greater Manchester
% of Sub-Region's Residents working in
Greater Merseyside
Lancashire
All North West
Non NW
Grand total
SubRegion
the rest of the North West
Outside the North West
19053
26
7063
4022
321
30485
3297
33782
56.4%
33.8%
9.8%
28
9825
99
42
480
10474
305
10779
91.1%
6.0%
2.8% 4.3%
Greater Manchester
4468
39
58320
1896
2552
67275
3045
70320
82.9%
12.7%
Greater Merseyside
2601
11
2224
26544
1179
32559
1137
33696
78.8%
17.9%
3.4%
678
236
3843
1368
28215
34340
1049
35389
79.7%
17.3%
3.0%
26828
10137
71549
33872
32747
175133
8833
183966
3129
239
5208
1326
822
10724
29957
10376
76757
185857
8833
183966
Lancashire All North West Non North West Grand Total
% of Sub-Region's Workers 63.6% 94.7% 76.0% resident in Sub-Region % of Sub-Region's Workers 26.0% 3.0% 17.2% resident in rest of the North West % of Sub-Region's Workers 10.4% 2.3% 6.8% resident outside the North West Source: Census of Population, 2001 Origin and Destination data Crown Copyright ©
35198
33569
75.4%
84.1%
20.8%
13.5%
3.8%
2.4%
Ref: A-163 Page 14
5.8%
4.8%
North West Economic Baseline – Appendix A Data
Table A3.14: Class 7: Routine Occupations– Travel to Work Patterns 2001 Workplace Districts Sub-Region
Residence Districts Sub-Region
Cheshire & Warrington Cumbria
Cheshire & Warrington
Cumbria
Greater Manchester
% of Sub-Region's Residents working in
Greater Merseyside
Lancashire
All North West
Non NW
Grand total
SubRegion
the rest of the North West
Outside the North West
35019
6
1700
1828
98
38651
2405
41056
85.3%
8.8%
5.9%
19
28760
59
31
279
29148
364
29512
97.5%
1.3%
1.2%
Greater Manchester
2895
28
124562
1941
2453
131879
1878
133757
93.1%
5.5%
1.4%
Greater Merseyside
4233
15
1692
59402
1463
66805
1130
67935
87.4%
10.9%
1.7%
93.3%
5.4%
1.3%
Lancashire All North West Non North West Grand Total
243
304
2550
975
70791
74863
971
75834
42409
29113
130563
64177
75084
341346
6748
348094
4145
380
2408
682
819
8434
46554
29493
132971
349780
6748
348094
% of Sub-Region's Workers 75.2% 97.5% 93.7% resident in Sub-Region % of Sub-Region's Workers 15.9% 1.2% 4.5% resident in rest of the North West % of Sub-Region's Workers 8.9% 1.3% 1.8% resident outside the North West Source: Census of Population, 2001 Origin and Destination data Crown Copyright ©
64859
75903
91.6%
93.3%
7.4%
5.7%
1.1%
1.1%
Ref: A-163 Page 15
2.4%
1.9%
North West Economic Baseline – Appendix A Data
Table A3.15: Forecast Changes in Key Economic Variables 2005 to 2025 Factor
Base 2005
UK Comparison to 2025 % pa
% overall 8% 2%
North West Change under Scenarios Recent Employment Success
Longer term trends % pa
6,814 0.37 0.14 Total Population 4,119 0.08 -0.12 Working Age Population (1659/64) 2,796 0.29 6% -0.04 Employment (ftes) 3,360 0.33 7% 0.05 Employment (all) 98,347 2.59 67% 2.09 GVA £2001 prices) 35.2 2.30 57% 2.14 Productivity (£000s GVA per fte) 0.777 0.10 2% Employment Rate (workplace based) 14.43 2.21 55% GVA per capita (£000s) Source: Experian forecasts, Regeneris Consulting analysis
% overall 2.7% -2.5%
2025
Absolute
% pa
2025
0.14 -0.12
% overall 2.7% -2.5%
7001 4091
187 -102
-0.8% 1.0% 51.4% 52.6%
2774 3,392 148,875 53.7
-22 32 50,529 18
-0.7%
0.771
47%
21.26
7001 4091
187 -102
0.30 0.39 2.41 2.11
6.1% 8.0% 61.1% 51.9%
2966 3631 158,483 53.4
170 270 60,131 18.3
-0.005
6.2%
0.825
0.048
6.83
56.8%
22.64
8.20
Ref: A-163 Page 16
Absolute
Transformational % pa 0.14 0.12
% overall 2.7% -2.5%
2025 7001 4091
187 -102
0.31 0.39 2.57 2.26
6.4% 8.1% 66.2% 56.2%
2975 3632 163,443 54.9
178 271 65,096 19.8
6.5%
0.83
0.05
61.7%
23.34
8.91
2.43
Absolute
North West Economic Baseline – Appendix A Data
Table A3.16: Sectoral GVA and Employment Forecasts under Longer Terms Trends Scenario – North West GVA £bns Change in GVA 2005-2025
2005 North West
Sector
North West
North West %
UK %
Employment (000s) % points difference
North West 2005
2005-2025 North West
North West %
UK %
% points difference
Agriculture, Forestry & Fishing
0.59
0.06
10%
32%
-22%
27.3
-7.9
-29%
-23%
-6%
Other Mining
0.05
-0.03
-64%
23%
-86%
1.0
-0.8
-83%
-42%
-41%
Oil & Gas Extraction
0.02
-0.00
-10%
9%
-19%
0.6
-0.1
-18%
-20%
2%
Food, Drink & Tobacco
2.74
-0.88
-32%
24%
-57%
58.4
-35.1
-60%
-25%
-35%
Textiles & Clothing
0.87
-0.34
-39%
-26%
-13%
34.3
-21.6
-63%
-57%
-6%
Wood & Wood Products
0.24
-0.09
-39%
38%
-76%
9.4
-6.2
-66%
-20%
-46%
Paper, Printing & Publishing
1.83
-0.15
-8%
30%
-38%
45.7
-16.4
-36%
-9%
-27%
Fuel Refining
1.34
-0.07
-5%
-5%
-1%
14.4
-1.5
-11%
-10%
-1%
Chemicals
3.96
1.34
34%
78%
-44%
45.1
-22.3
-49%
-29%
-21%
Rubber & Plastics
0.91
0.18
19%
55%
-36%
30.9
-11.8
-38%
-18%
-20%
Minerals
0.67
0.06
9%
24%
-15%
14.5
-5.0
-35%
-27%
-8%
Metals
1.44
-0.08
-5%
3%
-8%
50.2
-16.7
-33%
-26%
-7%
Machinery & Equipment
1.39
-0.27
-19%
-10%
-9%
32.5
-13.9
-43%
-34%
-8%
Electrical & Optical Equipment
1.27
0.89
70%
106%
-36%
33.4
-9.2
-28%
-11%
-17%
Transport Equipment
2.33
-0.46
-20%
16%
-36%
52.3
-27.9
-53%
-33%
-20%
Other Manufacturing
0.79
0.12
16%
44%
-28%
28.5
-5.4
-19%
3%
-22%
Gas, Electricity & Water
2.04
0.48
24%
51%
-27%
16.6
-9.1
-55%
-42%
-13%
Construction
6.63
2.47
37%
61%
-24%
209.9
-29.1
-14%
6%
-20%
Wholesaling
7.23
3.65
51%
63%
-12%
211.2
-31.9
-15%
-7%
-8%
Retailing
6.31
3.56
56%
70%
-14%
382.0
-42.8
-11%
-2%
-9%
Hotels & Catering
3.44
1.27
37%
55%
-18%
221.6
0.3
0%
14%
-14%
Transport
4.89
0.84
17%
40%
-23%
140.2
-27.3
-19%
-3%
-16%
Communications
2.86
9.43
330%
306%
24%
60.8
34.6
57%
47%
10%
Banking & Insurance
3.37
3.31
98%
97%
1%
102.7
9.5
9%
9%
0%
Other Financial & Business Services
3.15
1.87
59%
78%
-19%
59.1
-4.8
-8%
7%
-15%
12.21
14.65
120%
141%
-21%
439.6
81.4
19%
32%
-14%
4.64
-0.70
-15%
-7%
-8%
181.5
-31.4
-17%
-10%
-7%
Business Services Public Admin. & Defence
Ref: A-163 Page 17
North West Economic Baseline – Appendix A Data Table A3.16: Sectoral GVA and Employment Forecasts under Longer Terms Trends Scenario – North West GVA £bns Change in GVA 2005-2025
2005 North West
Sector
North West
North West %
UK %
Employment (000s) % points difference
North West 2005
2005-2025 North West
North West %
UK %
% points difference
Education
6.58
3.08
47%
29%
17%
286.8
63.7
22%
4%
19%
Health
7.40
6.13
83%
61%
22%
377.6
117.8
31%
12%
19%
Other Services
4.49
3.13
70%
68%
2%
192.4
102.5
53%
44%
9%
-3.33
-3.73
51%
67%
-15%
3360.5
32
0.9%
6.9%
-5.9%
-42.9%
Adjustment for Financial Services Adjustment for Ownership of Dwellings Statistical Adjustment Total
6.30
0.99
-0.31
-0.19
98.35
53.45
All Manufacturing
19.78
0.25
1.2%
449.56
-192.92
All Financial and Business Services
18.73
19.83
105.9%
601.33
86.15
14.3%
All Services
66.59
50.22
75.4%
2655.64
271.72
10.2%
Source: Experian forecasts
Ref: A-163 Page 18
North West Economic Baseline – Appendix A Data
Area
North West Cheshire & Warrington Cumbria Greater Manchester Lancashire Greater Merseyside
Area
North West Cheshire & Warrington Cumbria Greater Manchester Lancashire Greater Merseyside
Area
North West Cheshire & Warrington Cumbria Greater Manchester Lancashire Greater Merseyside
Table A3.17: Forecast Changes Under Scenarios 2005 to 2025: Total Resident Population Longer term trends Recent Employment Success Regional Productivity Transformation
Base 2005 (estimate) 6,814 882
% pa
% overall
2025
Absolute
0.14 0.36
2.7% 7.4%
7,001 948
187 66
491 2,537
0.20 0.16
4.1% 3.2%
511 2,619
1,435 1,469
0.24 -0.18
4.9% -3.5%
1,506 1,418
% pa
% overall
2025
Absolute
0.14 0.36
2.7% 7.4%
7,001 948
187 66
20 82
0.20 0.16
4.1% 3.2%
511 2,619
71 -51
0.24 -0.18
4.9% -3.5%
1,506 1,418
% pa
% overall
2025
Absolute
0.14 0.36
2.7% 7.4%
7,001 948
187 66
20 82
0.20 0.16
4.1% 3.2%
511 2,619
20 82
71 -51
0.24 -0.18
4.9% -3.5%
1,506 1,418
71 -51
Changes Under Scenarios 2005 to 2025: Working Age Population (aged 16 to 64 males, 16 to 59 women) Base Longer term trends Recent Employment Success Regional Productivity 2005 Transformation (estimate) 4,193 540
% overall
2025
% overall
2025
% overall
2025
-0.12 -0.02
-2.4% -0.3%
4,091 538
-102 -2
-0.12 -0.02
-2.4% -0.3%
4,091 538
-102 -2
-0.12 -0.02
-2.4% -0.3%
4,091 538
-102 -2
295 1,587
-0.25 0.00
-4.8% 0.1%
281 1,588
-14 1
-0.25 0.00
-4.8% 0.1%
281 1,588
-14 1
-0.25 0.00
-4.8% 0.1%
281 1,588
-14 1
870 901
-0.06 -0.44
-1.2% -8.5%
860 825
-10 -76
-0.06 -0.44
-1.2% -8.5%
860 825
-10 -76
-0.06 -0.44
-1.2% -8.5%
860 825
-10 -76
Base 2005 (estimate) 2,796 408
% pa
Absolute
% pa
Absolute
% pa
Changes Under Scenarios 2005 to 2025: Employment (ftes) Longer term trends Recent Employment Success % pa
Absolute
% pa
Regional Productivity Transformation
% overall
2025
% overall
2025
% overall
2025
-0.04 -0.03
-0.8% -0.6%
2,774 406
-22 -2
0.30 0.24
6.1% 4.9%
2,966 428
170 20
0.31 0.37
6.4% 7.6%
2,975 439
179 31
185 1,085
-0.74 0.15
-13.8% 3.0%
160 1,117
-26 32
-0.34 0.43
-6.6% 8.9%
173 1,181
-12 97
-0.51 0.52
-9.8% 10.9%
167 1,203
-18 119
581 537
0.01 -0.26
0.1% -5.1%
582 510
1 -27
0.26 0.32
5.3% 6.5%
612 572
31 35
0.33 0.07
6.8% 1.4%
620 545
39 8
Ref: A-163 Page 19
Absolute
Absolute
% pa
Absolute
North West Economic Baseline – Appendix A Data
Area
North West Cheshire & Warrington Cumbria Greater Manchester Lancashire Greater Merseyside
Area
North West Cheshire & Warrington Cumbria Greater Manchester Lancashire Greater Merseyside
Area
North West Cheshire & Warrington Cumbria Greater Manchester Lancashire Greater Merseyside
Base 2005 (estimate) 3,360 489
Forecast Changes Under Scenarios 2005 to 2025: Employment (full and part time) Longer term trends Recent Employment Success Regional Productivity Transformation % overall
2025
% overall
2025
% overall
2025
0.05 0.07
1.0% 1.3%
3,392 495
32 6
0.39 0.34
8.0% 7.0%
3,631 523
270 34
0.39 0.45
8.1% 9.3%
3,632 534
271 46
230 1,291
-0.59 0.23
-11.1% 4.6%
204 1,351
-26 60
-0.18 0.51
-3.6% 10.7%
221 1,429
-8 138
-0.36 0.59
-7.0% 12.6%
214 1,453
-16 162
696 655
0.10 -0.18
2.0% -3.5%
710 632
14 -23
0.36 0.40
7.4% 8.4%
748 710
51 55
0.42 0.14
8.6% 2.9%
757 674
60 19
Base 2005 (estimate) 98,347 15,862
% pa
Absolute
% pa
Absolute
% pa
Changes Under Scenarios 2005 to 2025: GVA (Workplace Based, 2001 Prices Longer term trends Recent Employment Success Absolute
% pa
Absolute
Regional Productivity Transformation
% overall
2025
% overall
2025
% overall
2025
2.09 2.23
51.4% 55.4%
148,875 24,650
50529 8788
2.41 2.50
61.1% 63.8%
158,483 25,984
60136 10122
2.57 2.75
66.2% 72.0%
163,443 27,289
65096 11427
6,072 38,459
1.16 2.35
25.9% 59.0%
7,647 61,164
1575 22705
1.57 2.63
36.4% 68.0%
8,284 64,593
2212 26133
1.52 2.87
35.2% 76.0%
8,210 67,700
2138 29240
19,861 18,092
2.13 1.65
52.5% 38.8%
30,295 25,120
10433 7028
2.31 2.26
57.8% 56.3%
31,345 28,277
11484 10185
2.55 2.09
65.5% 51.3%
32,871 27,373
13009 9281
Base 2005 (estimate) 35.17 38.85
% pa
Absolute
% pa
Changes Under Scenarios 2005 to 2025: Productivity (GVA per fte) Longer term trends Recent Employment Success % pa
% overall
2025
Absolute
2.14 2.26
52.6% 56.4%
54 61
18 22
32.75 35.46
1.91 2.20
46.1% 54.4%
48 55
34.18 33.69
2.13 1.92
52.3% 46.2%
52 49
% pa
% overall
2025
2.11 2.25
51.9% 56.2%
53 61
18 22
15 19
1.91 2.19
46.1% 54.2%
48 55
18 16
2.05 1.93
49.9% 46.7%
51 49
Ref: A-163 Page 20
Absolute
Absolute
Regional Productivity Transformation
% pa
% overall
2025
Absolute
2.26 2.38
56.2% 59.9%
55 62
20 23
15 19
2.04 2.33
49.8% 58.7%
49 56
16 21
17 16
2.22 2.02
55.0% 49.1%
53 50
19 17
North West Economic Baseline – Appendix A Data
Area
North West Cheshire & Warrington Cumbria Greater Manchester Lancashire Greater Merseyside
Area
Base 2005 (estimate) 0.78 0.84
Changes Under Scenarios 2005 to 2025: Employment Rate (ftes as % of w/a pop) Longer term trends Recent Employment Success Regional Productivity Transformation % overall
2025
% overall
2025
% overall
2025
-0.7% -2.5%
0.77 0.82
-0.01 -0.02
6.2% 3.5%
0.82 0.87
0.05 0.03
6.5% 6.1%
0.83 0.89
0.05 0.05
0.73 0.78
-12.1% 0.8%
0.64 0.79
-0.09 0.01
-5.0% 6.9%
0.69 0.84
-0.04 0.05
-8.2% 8.9%
0.67 0.85
-0.06 0.07
0.81 0.72
-1.3% -0.2%
0.80 0.72
-0.01 0.00
4.1% 12.5%
0.84 0.82
0.03 0.09
5.5% 7.1%
0.85 0.78
0.04 0.05
Base 2005 (estimate) 14.43 17.98
North West Cheshire & Warrington Cumbria 12.36 Greater 15.16 Manchester Lancashire 13.84 Greater 12.32 Merseyside Source: Experian forecasts
% pa
Absolute
% pa
Absolute
% pa
Changes Under Scenarios 2005 to 2025: GVA per capita Longer term trends Recent Employment Success % pa
Absolute
% pa
Regional Productivity Transformation
% overall
2025
% overall
2025
% overall
2025
1.96 1.86
47.3% 44.7%
21.3 26.0
6.8 8.0
2.28 2.13
56.8% 52.5%
22.6 27.4
8.2 9.4
2.43 2.38
61.7% 60.1%
23.3 28.8
8.9 10.8
0.96 2.18
21.0% 54.0%
15.0 23.4
2.6 8.2
1.36 2.46
31.1% 62.7%
16.2 24.7
3.8 9.5
1.32 2.70
29.9% 70.5%
16.1 25.8
3.7 10.7
1.89 1.83
45.4% 43.8%
20.1 17.7
6.3 5.4
2.06 2.44
50.4% 61.9%
20.8 19.9
7.0 7.6
2.30 2.27
57.7% 56.7%
21.8 19.3
8.0 7.0
Ref: A-163 Page 21
Absolute
Absolute
% pa
Absolute
North West Economic Baseline – Appendix A Data
Table A3.18: Estimates of Output Gap by North West NUTS 3 Areas, 2002 – Note figures need to be treated with caution NUTS 3 Area
West Cumbria East Cumbria Blackburn with Darwen Blackpool Greater Manchester North Greater Manchester South Lancashire CC Cheshire CC Halton and Warrington East Merseyside Liverpool Sefton Wirral North West England
Total GVA
Total Residents
£ms 2002
2002
GVA per employee
£2,416 £3,108 £1,674 £1,572 £12,441
234,000 253,800 139,300 142,200 1,170,400
84,975 115,596 61,770 62,165 416,174
£10.32 £12.25 £12.02 £11.05 £10.63
£1,242 £860 £504 £651 £5,855
£28.43 £26.89 £27.10 £25.29 £29.89
Productivity Gap compared to England £ms, 2002* £541 £915 £476 £591 £2,042
£23,593
1,352,100
729,621
£17.45
-£2,456
£32.34
£1,798
-£4,254
£14,842 £11,816 £5,346 £3,651 £6,060 £2,890 £2,842 £92,251
1,141,100 675,300 310,100 327,500 441,700 281,800 314,300 6,783,600
473,518 307,641 166,818 123,462 220,116 104,861 101,703 2,968,420
£13.01 £17.50 £17.24 £11.15 £13.72 £10.26 £9.04 £13.60 £15.63
£2,996 -£1,259 -£498 £1,469 £845 £1,515 £2,071 £13,794
£31.34 £38.41 £32.05 £29.57 £27.53 £27.56 £27.94 £31.08 £34.80
£1,636 -£1,110 £459 £645 £1,600 £759 £697 £11,049
£1,360 -£149 -£958 £823 -£755 £756 £1,374 £2,745
Total Employees in Employment, 2002
Total GVA per resident (£000s)
Output Gap Compared to England
£000s 2002
£ms, 2002*
Source: ONS Crown Copyright ©, NUTS 3 Tables 3.9 Regional Gross Value Added Estimates December 2004. Note: workplace based GVA, current basic prices, unadjusted • A positive figure indicates that output is lower than the England average (per resident of per employee • ** note in part caused by commuting flows so areas of net in commuting will have a negative and areas of net out commuting a positive figure.
Ref: A-163 Page 22
Other Output Factors, £ms 2002** £701 -£55 £28 £60 £3,814
North West Economic Baseline – Appendix A Data
Section 4: Business Competitiveness and Skills Tables Table A4.1: GVA, Employment and GVA Per Worker in North West and England by Manufacturing Sub-sector, 2001 North West
GVA Per Worker (£000s)
GVA, £billion
Employment
Manufacture of Food Products; Beverage and Tobacco
2.5
62,000
40.9
44.0
93
Manufacture of Textiles and Textile Products
1.1
29,000
36.0
45.7
79
Manufacture of Leather and Leather Products
0.1
14,000
7.3
7.8
94
Manufacture of Wood and Wood Products
0.2
8,000
26.5
29.4
90
Manufacture of Pulp, Paper and Paper Products Publishing and Printing
1.9
46,000
40.4
46.3
87
Manufacture of Coke, Refined Petroleum and Nuclear Fuels
1.1
12,000
96.0
97.4
99
Manufacture of Chemicals, Chemical Products and Man-made Fibre*
3.3
48,000
68.7
66.9
103
Manufacture of Rubber and Plastic Products
1.1
31,000
35.0
34.8
101
Manufacture of other Non-metallic products
0.6
14,000
42.3
38.5
110
Manufacture of Basic Metals and Fabricated Metal Products
1.5
47,000
31.9
33.2
96
Manufacture of Machinery and equipments not elsewhere classified
1.1
38,000
29.3
32.3
91
Manufacture of Electrical and Optical Equipment
1.6
40,000
39.3
45.8
86
2.6
55,000
47.9
43.6
110
0.8
24,000
32.0
32.2
99
19.5
470,000
41.6
41.0
101
Sub Sector
Manufacture of Transport Equipment Manufacture not elsewhere classified
Total
North West
North West, England =100
England
Sources: Annual Business Enquiry 2001 and UK Standard Industrial Classification of Economic Activities for Gross Value Added by Region 1989-2001, ONS, Crown Copyright © Note: * includes pharmaceuticals
Ref: A-163 Page 23
North West Economic Baseline – Appendix A Data
Table A4.2: Employment in Knowledge Economy Sectors, 1998 to 2003 Growth 1998-2003
Employment, 000s
000s
Growth 2000-2003
1998
1999
2000
2001
2002
2003
England
5763
5980
6193
6253
6238
6212
449
% 8%
000s 19
% 0%
North West
658
683
682
713
745
745
88
13%
63
9%
London
1520
1613
1715
1705
1624
1592
72
5%
-123
-7%
South East
1035
1123
1157
1157
1152
1114
79
8%
-43
-4%
East Midlands
362
358
375
374
379
377
15
4%
2
1%
Eastern
589
577
609
605
613
635
45
8%
26
4%
North East
199
191
198
201
215
219
21
10%
21
10%
South West
469
491
497
531
518
532
62
13%
35
7%
Yorkshire and The Humber
438
443
462
455
468
483
44
10%
20
4%
West Midlands
492
500
498
511
524
516
23
5%
17
3%
42
41
44
40
41
43
1
3%
0
-1%
Cheshire & Warrington
121
121
106
118
129
119
-2
-2%
13
12%
Greater Manchester
260
279
283
293
300
318
58
23%
35
12%
Greater Merseyside
122
125
126
133
144
134
12
9%
7
6%
Lancashire
113
117
123
129
131
131
19
17%
8
7%
Cumbria
Source: ONS, Crown Copyright ©, Annual Business Inquiry (employees in employment)
Ref: A-163 Page 24
North West Economic Baseline – Appendix A Data
Table A4.3: Share of Knowledge Economy Sectors Share of all Employees in Employment Area
1998
1999
2000
2001
2002
England
27%
28%
28%
28%
28%
28%
24%
24%
24%
25%
25%
25%
London
40%
41%
42%
42%
41%
41%
South East
30%
31%
32%
32%
31%
31%
East Midlands
21%
21%
22%
21%
22%
21%
North West
2003
Eastern
27%
27%
27%
27%
27%
27%
North East
21%
20%
21%
21%
21%
22%
South West
24%
25%
24%
25%
24%
25%
Yorkshire and The Humber
21%
22%
22%
22%
22%
22%
West Midlands
21%
22%
22%
22%
23%
22%
Cumbria
22%
22%
22%
22%
21%
21%
Cheshire & Warrington
31%
30%
27%
29%
31%
29%
Greater Manchester
24%
25%
25%
26%
26%
27%
Greater Merseyside
22%
23%
23%
23%
24%
22%
Lancashire
19%
21%
21%
22%
22%
22% 2003
Gap Compared to England average 1998
1999
2000
2001
2002
0
0
0
0
0
0
North West
102
104
122
106
88
88
London
-495
-517
-567
-569
-520
-504
South East
-102
-127
-121
-120
-120
-102
115
117
118
124
113
116
7
18
25
36
28
14
59
77
73
76
66
63
East Midlands Eastern North East South West
62
60
77
63
79
68
Yorkshire and The Humber
120
127
125
143
136
126
West Midlands
132
141
148
142
129
132
10
11
11
12
14
14
-16
-8
5
-1
-11
-3
Greater Manchester
32
31
34
27
22
8
Greater Merseyside
28
28
30
30
25
32
Cumbria Cheshire & Warrington
Lancashire 48 41 41 38 38 37 Source: ONS, Crown Copyright Š, Annual Business Inquiry (employees in employment) Note: This group has been defined as predominantly private sector employment sectors where nationally more than 25% of the workforce is of graduate level (NVQ level 4 or equivalent or higher as of 2001). All public sector employment in education, health and social services and public admin has been excluded from the definition. The Knowledge Based employment group includes the following SIC based sectors: Oil & gas extraction (SIC 11), Publishing, printing, reproduction of recorded media (22), Manufacture of petroleum/nuclear fuel (23), Manufacture of chemicals and chemical products (24), Manufacture of office machinery and computers (30), Radio, TV & equipment manufacture (32), Manufacture of medical, optical and precision instruments (33), Manufacture of other transport equipment (35), Supply of electricity & gas (40), Water supply (41), Air transport (62), Financial intermediation (65), Insurance services (66), Other financial services (67), Real estate activities (70), Computer and related activities (72), Research and development (73), Other business activities (74), Activities of membership organisations (90) and Recreational, cultural and sporting activities (92). The definition has been extracted from work undertaken by the Local Futures group.
Ref: A-163 Page 25
North West Economic Baseline – Appendix A Data
Table A4.4: Stock of VAT Registered Businesses, per 10,000 Adults of Working Age Business Stock per 10,000 working age adults 1998
1999
2000
2001
2002
2003
England
450.9
458.6
462.8
466.1
467.4
467.6
North East
260.9
263.6
265.9
268.7
268.5
269.4
North West
373.6
378.5
380.3
382.3
383.0
382.3
Yorkshire and The Humber
386.0
389.9
391.6
392.1
391.5
390.5
East Midlands
426.7
431.1
433.9
436.8
437.4
438.7
West Midlands
416.1
423.2
427.9
432.4
434.0
435.4
Eastern
492.1
499.9
503.4
508.5
510.3
511.6
London
540.3
551.3
556.4
557.7
556.8
554.2
South East
504.2
515.7
523.7
530.1
535.4
537.4
South West
517.3
522.5
523.3
524.3
525.6
525.3
Cheshire and Warrington
453.9
464.1
469.7
473.6
479.8
480.9
Cumbria
522.2
525.4
526.6
529.3
533.0
536.4 373.4
Greater Manchester
372.2
375.9
376.6
376.7
374.9
Lancashire
405.6
410.4
410.6
412.6
410.2
408.6
Greater Merseyside
250.1
254.7
257.7
261.3
264.9
264.1
Business Stock per 10,000 adults, England=100 1998
1999
2000
2001
2002
2003
100.0
100.0
100.0
100.0
100.0
100.0
North East
57.9
57.5
57.5
57.6
57.4
57.6
North West
82.8
82.5
82.2
82.0
81.9
81.8
Yorkshire and The Humber
85.6
85.0
84.6
84.1
83.8
83.5
East Midlands
94.6
94.0
93.8
93.7
93.6
93.8
West Midlands
92.3
92.3
92.5
92.8
92.8
93.1
Eastern
109.1
109.0
108.8
109.1
109.2
109.4
London
119.8
120.2
120.2
119.7
119.1
118.5
South East
111.8
112.5
113.2
113.7
114.5
114.9
South West
114.7
114.0
113.1
112.5
112.4
112.3
Cheshire and Warrington
100.7
101.2
101.5
101.6
102.7
102.8
Cumbria
115.8
114.6
113.8
113.5
114.0
114.7
Greater Manchester
82.6
82.0
81.4
80.8
80.2
79.8
Lancashire
89.9
89.5
88.7
88.5
87.8
87.4
Merseyside Source: ONS, Crown Copyright Š
55.5
55.5
55.7
56.1
56.7
56.5
England
Ref: A-163 Page 26
North West Economic Baseline – Appendix A Data
Table A4.5: New VAT Registered Businesses, per 10,000 Adults of Working Age Vat Registrations per 10,000 working age adults 1998 51.5
1999 49.4
2000 49.5
2001 45.8
2002 47.6
2003 51.1
North East
25.2
25.6
25.9
24.7
26.0
27.9
North West
40.8
39.1
39.4
37.1
39.1
42.4
Yorkshire and The Humber
37.7
37.2
37.7
35.9
37.8
41.9
East Midlands
43.5
41.8
43.1
40.8
43.2
45.8
West Midlands
43.8
42.6
42.8
40.8
41.9
45.2
Eastern
52.0
49.4
50.9
47.1
50.4
52.5
London
81.5
76.5
74.8
66.0
65.2
71.2
South East
58.6
55.9
55.5
51.8
54.3
57.6
South West
0.0
51.1
49.2
48.5
45.2
47.9
Cumbria
35.4
33.1
35.7
34.5
40.7
42.0
Cheshire & Warrington
48.4
46.7
47.5
46.4
49.0
49.5
Greater Manchester
45.5
43.7
43.5
39.1
42.2
46.2
Greater Merseyside
29.5
28.3
28.5
27.2
27.5
31.7
Lancashire
41.7
39.5
39.7
38.8
39.2
42.7
2002 100.0
2003 100.0
England
Vat Registrations per 10,000 adults, England=100 England
1998 100.0
1999 100.0
2000 100.0
2001 100.0
North East
48.9
51.9
52.4
53.9
54.6
54.7
North West
79.3
79.2
79.7
80.9
82.2
83.1
Yorkshire and The Humber
73.3
75.4
76.2
78.3
79.3
82.1
East Midlands
84.6
84.7
87.2
89.0
90.7
89.6
West Midlands
85.1
86.3
86.5
89.0
88.0
88.6
Eastern
101.1
100.0
103.0
102.8
105.9
102.9
London
158.4
154.9
151.2
144.0
136.9
139.4
South East
113.8
113.2
112.3
113.1
114.0
112.8
0.0
103.6
99.4
105.9
94.9
93.8
Cumbria
68.7
67.0
72.1
75.3
85.4
82.3
Cheshire & Warrington
94.0
94.6
96.1
101.3
102.9
96.9
Greater Manchester
88.4
88.5
88.1
85.4
88.6
90.4
Greater Merseyside
57.3
57.4
57.7
59.4
57.7
62.0
Lancashire Source: ONS, Crown Copyright Š
81.0
80.1
80.2
84.5
82.3
83.7
South West
Ref: A-163 Page 27
North West Economic Baseline – Appendix A Data
Table A4.6: Inward Investment by Region, 2002-4 Region
No. of Projects
2002/3
No. of New Jobs
2003/4
2002/3
2003/4
No. of Safeguarded Jobs
2002/3
Total No. of Associated Jobs
2003/4
2002/3
2003/4
North West
59
63
7,486
3,162
2,272
9,549
9,758
West Midlands
52
61
2,369
2,391
2,155
4,646
4,524
12,711 7,037 6,135
North East
62
61
4,653
1,919
2,098
4,216
6,751
London
155
170
2,305
2,572,
513
1,591
2,818
4,163
South East
118
134
3,786
2,734
847
1,094
4,633
3,828
South West
33
39
654
2,147
834
1,523
1,488
3,670
East Midlands
32
30
1,314
1,982
1,875
444
3,189
2,426
Yorkshire and Humber
35
25
2,729
934
1,214
3,275
2,148
631
430
546
East of England
42
56
1,545
1,192
England
588
639
25,927
18,271
12,054
914
25,039
762
37,981
43,310
UK
709
811
34,396
25,463
19,915
33,754
54,311
59,217
Source: Data supplied by NWDA Inward Investment Team
Table A4.7: Number of Inward Investment Projects, and associated jobs, 20002004ª Year
No. of Projects
New Jobs
Safeguarded Jobs
2000
32
3,113
2001
34
2,004
1,610 410
2002
65
3,849
1,961
2003
107
13,063
6,701
2004
35
1,530
4,779
Total 273 23,559 15,461 Source: Data supplied by NWDA Inward Investment Team. ª This refers to the year in which the investment decision was made, hence the data is not quite the same as in the table above
Table A4.8: Top Ten Source Countries for North West Inward Investments, by number of Projects, 2000-2004 Country
No. of Projects
% of Total
Jobs Created
Jobs created per project
1
US
77
30%
8817
115
2
UK
72
27%
7526
105
3
Germany
22
8%
1776
81
4
Japan
14
5%
1322
94
5
Canada
11
4%
392
36
6
France
11
4%
306
28
7
Ireland
9
3%
426
47
8
Netherlands
7
3%
450
64
9
China
6
2%
835
139
10
Belgium
5
2%
430
86
Source: Data supplied by NWDA Inward Investment Team
Ref: A-163 Page 28
North West Economic Baseline – Appendix A Data
Table A4.9: Location of Inward Investments, by Jobs Created, 2000-2004 Greater Greater Not Grand Year Cheshire Cumbria Lancashire Manchester Merseyside Specified Total 2000
201
180
56
540
1,939
197
2001
855
0
65
146
438
500
3,113 2,004
2002
19
100
70
3,008
652
0
3,849
2003
3,757
234
1,299
2,770
5,003
0
13,063
2004
0
0
80
1,199
251
0
1,530
Total
4,832
514
1,570
7,663
8,283
697
23,559
21%
2%
7%
33%
35%
3%
100%
% of Total
Source: Data supplied by NWDA Inward Investment Team
Table A4.10: Location of Inward Investments, by number of Projects, 20002004 Year
Cheshire
Cumbria
Greater Manchester
Lancashire
Greater Merseyside
Grand Total 32
2000
7
1
4
7
2001
10
2
3
12
6
0
34
2002
7
3
8
36
11
0
65
2003
18
9
11
33
36
0
107
2004
0
3
4
15
13
0
35
Total
42
18
30
103
76
4
273
15%
7%
11%
38%
28%
1%
100%
% of Total
Source: Data supplied by NWDA Inward Investment Team
Ref: A-163 Page 29
10
Not Specified 4
North West Economic Baseline – Appendix A Data
Table A4.11: The Entrepreneurial Environment and Performance of North West Districts Area
Backdrop
Supporting Factors
Enterprise Gap
Trend in business density
Knowsley
Tough
Fair
large
rising
Blackpool
Tough
Fair
large
falling
Tameside
Tough
Fair
large
static
Halton
Tough
Fair
large
rising
Copeland
Tough
Fair
modest
static
Oldham
Tough
Fair
large
rising
Liverpool Hyndburn Rochdale
Tough
Fair
large
static
Moderate
Fair
modest
rising
Tough
Fair
large
static
Pendle
Moderate
Fair
modest
static
Salford
Moderate
Fair
large
rising
Tough
Fair
large
rising
Carlisle
Favourable
Fair
modest
static
Wyre
Favourable
Positive
modest
static
Moderate
Fair
intermediate
static
Tough
Fair
large
static
Favourable
Positive
modest
static
Wigan
Blackburn with Darwen Barrow-in-Furness Allerdale Burnley
Moderate
Fair
modest
rising
St Helens
Tough
Fair
large
rising
Sefton
Tough
Fair
large
rising
Ellesmere Port &Neston
Tough
Fair
intermediate
rising
Wirral
Tough
Fair
large
rising
Favourable
Fair
modest
static
Moderate
Positive
large
static
Chorley
Favourable
Positive
modest
static
Rossendale
Favourable
Positive
modest
static
West Lancashire
Favourable
Positive
modest
static
Bury
Favourable
Fair
intermediate
static
Eden
Favourable
Positive
surplus
static
Warrington
rising
Preston Bolton
Favourable
Positive
intermediate
Lancaster
Moderate
Positive
intermediate
static
South Ribble
Moderate
Positive
modest
static
Manchester
Favourable
Positive
large
falling
Stockport
Favourable
Positive
modest
rising
Vale Royal
Favourable
Positive
modest
static
Chester
Favourable
Positive
modest
static
Fylde
Favourable
Positive
modest
falling
Moderate
Positive
modest
rising
Trafford
Favourable
Positive
modest
rising
Congleton
Favourable
Positive
surplus
rising
South Lakeland
Favourable
Positive
surplus
rising
Macclesfield
Favourable
Positive
surplus
rising
Ribble Valley
Favourable
Positive
surplus
static
Crewe and Nantwich
Source: Regeneris Consulting analysis
Ref: A-163 Page 30
North West Economic Baseline – Appendix A Data
Section 5 Regeneration, Social Exclusion and Worklessness Data Tables and Charts Figure A5.2 Employment Rate by Type of Disability, 2002/03 Employment Rate by Type of Disability, 2002-2003 90
80.4%
80
78.7%
74.5% 66.8%
70
71.4%
61.4%
60 50 40
32.7%
30
24.5%
20 10 0 DDA & work-limiting
Only DDA disability
Work-limiting Disability
All people
Source: Labour Force Survey England
North West
Figure A5.3 Employment Rates by Ethnic Group, 2001
Employment Rates by Ethnic Groups, 2001 70% 60%
62%
59% 51%
50%
47%
52%
48%
45%
48%
46%
40%
40% 30% 20% 10% 0% White
Mixed Race
Asian
England
31
North West
Black
Chinese and other
North West Economic Baseline – Appendix A Data Figure A5.4 Employment Rates for Lone Parents, 2001
Employment Rates for Lone Parent Families, 2001, North West
70% 58%
60% 50%
50%
48%
53%
53%
48%
41%
40% 30% 20% 10% 0% England
North West
Cumbria
S ource: Census 2001 Note: All 16-74 years old
Greater Manchester
Lancashire
Cheshire & Warrington
Greater Merseyside
Figure A5.5 % Breakdown of Economic Inactivity (16-74), 2001
Lancashire
Other
3.1%
Sick/Disabled
7.2%
Looking After Home/Family
5.8%
Student
4.3%
Retired
14.9%
Greater Manchester
Greater Merseyside Cheshire&Warrington
Total EI
35.4%
Other
2.4%
Sick/Disabled
5.2%
Looking After Home/Family
5.9%
Student
3.4%
Retired
14.9%
Total EI
31.9%
Other
3.9%
Sick/Disabled
10.0%
Looking After Home/Family
6.7%
Student
5.4%
Retired
14.5%
Total EI
40.6%
Other
3.5%
Sick/Disabled
7.8%
Looking After Home/Family
6.1%
Student
5.1%
Retired
13.1%
Total EI
35.6%
Cumbria
Other
2.7%
Sick/Disabled
6.4%
Looking After Home/Family
5.7%
Student
2.8%
Retired
16.7%
Total EI
34.2%
0%
5%
10%
15%
20%
25%
percentage
Source: Census 2001
32
30%
35%
40%
45%
North West Economic Baseline – Appendix A Data Table A5.1: Economic Activity by District, 2001, ranked by rate District
Working Age Population
Economically
Economic Activity Rate as %
active
of Working age Population
South Ribble
75,600
53,144
70.3%
Eden
36,566
25,566
69.9%
Ribble Valley
39,005
27,105
69.5%
Chorley
74,018
51,312
69.3%
Congleton
66,707
46,215
69.3%
Macclesfield
108,878
75,396
69.2%
Stockport
204,812
141,548
69.1%
Warrington
139,054
95,752
68.9%
Trafford
151,445
103,613
68.4%
Bury
129,330
87,797
67.9%
Vale Royal
88,006
59,626
67.8%
Carlisle
73,413
49,674
67.7%
Crewe and Nantwich
79,872
53,974
67.6%
South Lakeland
74,227
50,040
67.4%
Rossendale
46,644
31,312
67.1%
Tameside
152,313
101,660
66.7%
Chester
86,789
57,757
66.5%
Ellesmere Port & Neston
58,873
39,062
66.3%
Allerdale
68,062
44,598
65.5%
Bolton
185,746
121,534
65.4%
West Lancashire
78,983
51,654
65.4%
Wigan
220,196
143,223
65.0%
Oldham
152,602
99,003
64.9%
Hyndburn
56,957
36,746
64.5%
Burnley
62,617
40,245
64.3%
Rochdale
145,068
93,044
64.1%
Fylde
52,110
33,335
64.0%
Preston
93,906
60,022
63.9%
Halton
85,645
54,521
63.7%
Pendle
62,344
39,490
63.3%
Wyre
74,885
47,131
62.9%
Copeland
50,687
31,867
62.9%
Blackpool
101,786
63,595
62.5%
Salford
155,376
96,492
62.1%
Sefton
201,184
124,915
62.1%
Wirral
221,013
136,521
61.8%
Lancaster
97,365
59,939
61.6%
St. Helens
128,207
78,846
61.5%
Blackburn with Darwen
94,322
57,861
61.3%
Barrow-in-Furness
51,228
31,165
60.8%
Knowsley
107,330
61,157
Manchester
284,994
159,127
55.8%
Liverpool
321,504
176,602
54.9%
Source: ONS, Census 2001
33
57.0%
North West Economic Baseline – Appendix A Data
Section 6 Data Tables and Charts
Table A6.1 Previously Developed Land in the North West, 2001 - 2003 Vacant and derelict land
Currently in use
Previously developed vacant land
Derelict land & buildings
2001
2,410
5,690
740
Allocated in a local plan or with planning permission for any use 990
890
10,710
2002
2,630
5,610
1,070
1,490
970
11,770
2003
2,570
5,700
770
1,480
880
11,390
10
30
490
-10
680
0.2
4.1
49.5
-1.1
6.3
Change 2001-03 160 % Change 20016.6 03 Source: National Land Use Database
Vacant buildings
Known redevelopment potential but no planning allocation or permission
All previously developed land that is unused or may be available for redevelopment
Table A6.2 Bus & Light Rail Passenger Journeys 2000/01
2001/02
2002/03
2003/04
North East
276
274
274
269
North West
506
498
501
493
17
18
19
19
204
205
206
205
Merseyside FMC
142
142
144
141
Blackpool Trams
4
5
5
4
139
127
128
124
Yorkshire & the Humber
385
380
389
370
East Midlands
210
210
211
205
West Midlands
459
452
444
420
East of England
170
172
166
164
1,412
1,493
1,607
1,771
South East
282
276
262
260
South West
179
175
175
173
3,880
3,929
4,028
4,125
Gtr Manchester FMC light rail Gtr Manchester FMC bus
Rest
London
England total
1 Wales includes Great Orme trams. North West includes Blackpool Corporation trams 2 PTE data from DfT's survey of operators might differ from PTE's own surveys of their bus services. 3 GB total excludes light rail passenger journeys. London excludes London Underground. Source: DfT Regional Transport Statistics 2004
34
North West Economic Baseline – Appendix A Data
Table A6.3 Average Travel to Work Times by Occupational Group, North West Occupational Group Cheshire Cumbria Lancashire Greater Greater Manchester Merseyside Managers & Senior 26.7 13.8 19.0 21.0 24.3 Officials Professional Occupations 22.7 18.0 21.1 27.1 25.5 Associate Professional & 16.4 18.8 19.5 24.2 27.3 Technical Occupations Administrative & 17.6 16.5 16.7 23.0 18.7 Secretarial Occupations Skilled Trades 10.8 11.8 12.2 16.0 13.3 Occupations Personal Service 11.6 12.7 12.8 15.4 14.0 Occupations Sales and Customer 14.7 13.3 17.6 18.6 19.8 Service Occupations Process, Plant and 16.8 13.3 20.4 16.1 16.8 Machine Operatives Elementary Occupations 13.3 12.2 14.1 16.7 16.7 All Occupations 16.9 14.4 17.0 19.8 19.6 Source: Labour Force Survey, ONS, February 2005
North West 22.0 24.0 23.0 20.0 14.0 14.0 18.0 17.0 16.0 18.7
Table A6.4 Usual Method of Travel to Work by Region of Residence, Autumn 2003 Region
Car
M/cycle
Bicycle
Bus/coach
National rail
Other rail
All rail
Walk
Other modes
North East
70
1
2
11
*
2
3
12
2
North West
74
1
2
8
2
-
2
11
1
Greater Manchester FMC
74
1
2
9
2
1
3
11
1
Merseyside FMC
70
*
*
12
4
*
4
10
*
Rest
77
1
3
6
1
*
1
11
*
Yorkshire & the Humber
73
1
3
10
2
*
2
10
1
East Midlands
77
1
3
7
1
*
1
10
1
West Midlands
78
1
2
8
1
*
1
9
*
East
75
1
4
4
6
1
6
9
1
London
43
2
3
15
11
16
27
10
1
South East
75
1
4
4
5
*
6
10
1
South West
76
2
4
4
1
*
1
13
*
England
71
1
3
8
4
3
6
10
1
Great Britain
71
1
3
8
4
2
6
10
1
Source: Labour Force Survey
35
North West Economic Baseline – Appendix A Data
Table A6.5 Distance Traveled per Person per Year, by Mode of Transport (1999-2001) Public transport Walk
Pedal cycle2
Cars and other private road vehicles
Rail2
Bus
Taxi and other
All public transport
All modes of transport
North East
177
52
4,651
448
200
211
858
5,737
North West
173
36
5,407
265
249
204
717
6,333
Yorkshire and the Humber
190
42
5,490
279
282
199
761
6,483
East Midlands
165
51
6,156
237
..
134
648
7,020
West Midlands
175
31
5,694
269
..
222
613
6,513
East
176
51
7,056
138
699
161
998
8,280
London
237
32
3,647
333
996
206
1,536
5,452
South East
193
45
6,967
117
568
176
862
8,067
South West
178
41
6,015
157
..
179
592
6,826
England
188
41
5,719
234
449
188
871
6,819
Great Britain
189
39
5,714
245
425
204
873
6,815
Local bus
Other public
Source: National Travel Survey, Office for National Statistics
Table A6.6 Trips by Main Mode of Travel Region
Car Driver
Walk
Car passenger
Other
All modes
North East
289
348
208
20
81
34
980
North West
243
431
241
22
63
27
1,027
Yorkshire & the Humber
244
395
236
22
59
20
975
East Midlands
256
471
241
30
46
16
1,059
West Midlands
227
436
232
20
65
19
998
East
214
442
251
37
33
27
1,005
London
236
250
158
21
114
100
880
South East
240
467
245
37
32
27
1,048
South West
261
461
253
31
31
13
1,050
England
242
413
230
27
57
33
1,002
Wales
203
419
240
20
48
18
948
Scotland
281
376
207
20
77
29
991
Great Britain
244
410
228
26
59
32
998
Source: National Travel Survey, Office for National Statistics
36
North West Economic Baseline – Appendix A Data Table A6.7: Traffic Volumes, 2003 Major Roads 000's Vehicles per day
Minor Roads
Motorway
Rural
Urban
Rural
Urban
All Roads
North East
50.1
13.3
20.8
0.7
2.7
3.3
North West
71.4
10.6
17.7
0.9
2.1
4.1
Greater Manchester FMC
90.7
13.1
19.1
1.6
2.4
5.5
Merseyside FMC
58.0
19.8
17.3
1.5
2.2
4.3
Rest
65.0
10.0
16.3
0.9
1.7
3.5
Yorkshire & The Humber
65.6
12.2
18.5
0.9
2.0
3.5
East Midlands
92.6
13.5
19.1
0.9
2.1
3.5
West Midlands
79.7
11.4
20.2
0.9
2.8
4.0
East
82.8
17.8
18.1
1.2
2.6
3.7
London
96.4
29.1
28.8
1.5
2.7
6.1
South East
91.0
17.9
19.5
1.4
2.5
4.9
South West
66.1
10.9
19.7
0.7
2.2
2.6
England
78.0
13.7
20.7
1.0
2.4
3.9
Source: DfT Regional Transport Statistics 2004 Table A6.8 Emission to Air from Environment Agency Regulated Processes in the North West Change (%) 19991999 2001 2003 2003 NOx regional total tonnes 29,873 29,611 26,830 - 10.2 SOx regional total tonnes
86,480
66,587
57,112
- 34.0
Source: Environment Agency Pollution Inventory, Environment Agency, 2004
Table A6.9 Commercial and Industrial Waste in the North West by management method (% of total waste) 1998/99 England Greater Lancashire Merseyside North West Cheshire Cumbria & Wales Manchester Land disposal 33.7 50.8 52.9 47.3 47.4 48.5 46.2% Land 21.8 6.5 1.3 0.5 0 4.2 2.0% Recovery Re-Used 14.4 16.5 1.8 17.1 1 8 7.4% Re-Cycled
14.9
16.2
28.8
25.4
32.2
25.5
30.0%
Thermal
2.5
1.7
1
0.1
0
0.9
2.0%
Transfer
0.2
0.1
3.4
0.3
1.2
1.6
1.8%
Treatment
4.5
0.6
6.5
5.6
13.2
6.4
5.7%
UnRecorded
7.9
7.7
4.2
3.6
4.9
4.8
5.0%
Total
100
100
100
100
100
100
100.0%
Source: Department Food, Environment and Rural Affairs
37
North West Economic Baseline – Appendix A Data
Table A6.10 Freight transport by road - Goods lifted by origin and destination of goods - GO Region, FMC and Country: 2003, Million Tonnes Destination
Origin
North
North
Yorkshire &
East
West
the
East
West
Midlands
Midlands
1
East
London
South
South
East
West
Great
All England
Humber
Wales
Scotland
Britain1
% North East
57
4
1.9%
8
2
Tyne & Wear FMC
23
1
0.5%
2
1
Rest
34
3
1.4%
6
1
5
140
67.6%
12
8
Gtr Manchester FMC
1
41
19.8%
3
Merseyside FMC
1
24
11.6%
Rest
3
75
36.2%
2.5%
68.6%
Yorkshire & the Humber
6
South Yorkshire FMC
1
West Yorkshire FMC
2
Rest
North West
All NW %
1
-
1
-
75
-
3
78
-
-
1
1
-
-
-
27
-
1
28
-
1
-
48
-
2
12
50
4
1
3
3
189
6
9
204
2
3
1
-
1
1
55
2
2
59
2 7
2
3
1
-
-
1
35
1
1
35
4
6
2
1
2
1
99
3
6
110
0.3%
5.9%
3.9%
5.9%
2.0%
0.5%
1.5%
1.5%
92.6%
2.9%
4.4%
100.0%
15 3
7.2%
135
18
7
5
1
3
2
193
2
3
198
1.4%
30
5
1
1
-
1
1
44
-
-
44
5
2.4%
44
4
2
1
-
1
1
61
1
1
61
3
7
3.4%
61
9
4
3
1
1
-
88
1
2
93
East Midlands
2
11
5.3%
14
84
13
13
5
9
3
155
2
1
158
West Midlands
2
10
4.8%
5
12
105
6
3
7
6
155
5
2
162
West Midlands FMC
1
3
1.4%
2
4
43
3
1
3
2
60
2
1
63
Rest
1
7
3.4%
3
8
62
3
2
4
4
95
3
1
99
East
1
5
2.4%
5
12
7
124
20
19
4
195
2
1
198
London
-
1
0.5%
1
2
2
12
44
13
1
76
1
-
77
South East
1
3
1.4%
2
7
6
11
18
126
8
182
2
1
185
South West
-
2
1.0%
2
2
6
2
2
11
109
136
6
-
142
75
193
93.2%
183
146
159
179
95
191
136
1,358
26
20
1,404
Wales
-
8
3.9%
1
2
5
1
1
2
6
28
59
-
87
Scotland
2
6
2.9%
2
1
1
-
-
1
-
14
-
138
152
Great Britain 77 207 100.0% 186 149 165 Source: Continuing Survey of Road Goods Transport, Regional Transport statistics 2004, Table 7.2 Note: excludes good originating or destined for outside Great Britain. FMC= former metropolitan county
180
96
194
142
1,400
85
158
1,643
England
38
NORTHWEST DEVELOPMENT AGENCY
EMPLOYMENT GROWTH IN THE NORTH WEST
RES Topic Paper and Appendix B to Main Economic Baseline Report
July 2005
Employment Growth in the North West
CONTENTS 1.
IMPLICATIONS FOR THE RES
1
2.
SCOPE OF THE TOPIC PAPER
2
3.
WHAT HAS BEEN THE NATURE OF EMPLOYMENT GROWTH?
3
4.
IN WHICH SECTORS HAS THE GROWTH OCCURRED?
4
5.
WHERE HAS THE GROWTH TAKEN PLACE?
6
Ref: A-163 Page 2
Employment Growth in the North West
1.
Implications for the RES
1.1
Work carried out for the RES baseline has highlighted the considerable growth in employment in the region since 1999. The paper covers the following points: •
What has been the nature of employment growth (type of jobs)?
•
What sectors has the growth been in?
•
Where has the growth taken place?
1.2
How significant has employment growth been? The key point here is that the 150k employee jobs created 1999 to 2003 in the North West represents a significantly faster rate than the England average (5.3% compared to 3.3%) and even faster considering the 2000 to 2003 period alone (5.1% compared to 1.8%). However, the growth is not exceptional and was exceeded in the regions of South West, Yorkshire and the Humber and in the North East. In comparison employment fell in London and the South East over the period since 2000. In short the rate of growth has been common the regions outside the greater South East.
1.3
What has been the nature of employment growth? The key points here are: •
The majority of recent employment growth has been part-time (100k out of the 150k new employee jobs created 1999 to 2003) and, perhaps surprisingly given the type of jobs created; the majority (2/3rds) have been taken by men.
•
The rates of increase of part-time and full-time employment and especially male employment have exceeded the English average over the period.
•
In common with the national position, employment has been created in medium to large workplaces not the smallest workplaces.
1.4
The growth in employment has been accompanied by falls in worklessness. The level of economic inactivity has fallen between 1999/00 and 2003/00 in the region (the fall of 1 percentage point is equivalent to around 46,000 people) and is one of the few regions which have secured a decline in economic inactivity (along with eastern region). This decline is accounted by the fall in female inactivity (a fall of two percentage points), whilst male inactivity has actually risen (by one percentage point).
1.1
What sectors has the growth been in? The two main sectors accounted for all the net employment growth over period 1999 to 2003: •
Public sector services (+70k jobs or a growth of 10% in line with the 11% growth for all England) (split 25k growth in education and 46k growth in health/social care)
•
Business services (+72k or 16%, much faster than the England average)
1.2
Other sectors where jobs grew significantly were: hotels/catering, construction, transport/communications and “other services”.
1.3
Manufacturing saw a net loss of 82k jobs (a net loss of 16% in line with the rate of decline for England as a whole) and there were losses in utilities/energy (7k) and a very slight decline in financial services employment. Within these overall sectoral losses there will have course been growth in some sub-sectors and locations.
Page 1
Employment Growth in the North West 1.4
The relatively low productivity growth per employee experienced in the North West therefore appears to be a result of: •
Higher value added employment in the manufacturing sector being replaced by lower value added employment in the public services, hotels/catering and other services.
•
The relatively rapid growth in part-time employment
•
However, as growth in business services has been strong we can only conclude that the jobs created in this sector must have also been relatively low value added.
1.5
Where has the growth taken place? There has been employment growth in all sub-regions. In percentage terms it has been fastest in Lancashire, Greater Merseyside and Cumbria since 1999, but in absolute terms largest in Greater Manchester. Since 2000 the picture is slightly different with slower rates of growth in Cumbria, Lancashire and (to a lesser extent Greater Manchester) and faster growth in Cheshire and Warrington
1.6
At a sub-regional level the key points on jobs growth by sector are:
1.7
•
The strong regional growth in business services (72k) has been concentrated in Greater Manchester (44k) and to a lesser extent Lancashire (15K)
•
There have been falls in manufacturing (and utilities/energy) employment in all sub-regions – in absolute and % terms the greatest falls have been in Greater Manchester (a loss of 41k jobs)
•
There has been strong growth in construction employment in Lancashire and retail in Cumbria
•
Strong growth in hotels/restaurants in Cumbria, Greater Manchester and Greater Merseyside
There has been a complex pattern of employment growth across the region at a local level. In absolute terms, the key employment growth districts are Manchester and Liverpool which is not surprising given that they are the two largest employment centres (these two main centres have accounted for 25% of regional net employment change since 2000 compared to their 17% share of total employment). Other key centres of employment growth have been: •
St Helens, and Sefton (Knowsley since 1999 but not 2000) in Greater Merseyside
•
Trafford and Rochdale in Greater Manchester
•
The Preston/South Ribble and Lancaster areas in Lancashire
•
The Chester/Ellesmere Port area in Cheshire (where if growth in North Wales was taken into account would be an even stronger growth area).
2.
Scope of the Topic Paper
2.1
This topic paper will look at the trends in employment in the North West. Benchmarking against other regions and the rest of the country, the paper will focus on the type of jobs that have been created, the sectors in which growth/decline has taken place and the geographical patterns of employment change.
Page 2
Employment Growth in the North West
3.
What has been the nature of employment growth?
3.1
Overall the region has seen one of the fastest rates of employment growth (of employees in employment) and the largest absolute growth in employment since 2000 (see Table 3-1). However, the rate of growth was faster in the South West, Yorkshire and the Humber and in the North East. In comparison employment fell in London and the South East over the period since 2000.
3.2
The growth has not been, perhaps as is the received wisdom, entirely in part time employment as Table 3-2 shows in terms of employees the majority of jobs growth 1999 to 2003 (around 2/3rds) has been in male employment, although the largest share of growth and largest absolute and % rate of growth has been in part-time employment (male and female). The rates of growth of male and of part-time employment in the North West have both significantly outstripped that of the England average. Table 3-1: Overall Change in Employees in Employment, 000s 1998
1999
2000
2001
2002
2003
945.7
968.6
961.4
978.1
1,000.4
1,012.1
43.5
4.5%
50.7
5.3%
2,788.6
2,841.0
2,846.0
2,894.7
2,968.4
2,991.3
150.3
5.3%
145.3
5.1%
Yorkshire and The Humber
2,049.7
2,057.4
2,078.1
2,113.9
2,150.5
2,185.9
128.5
6.2%
107.8
5.2%
East Midlands
1,752.4
1,715.2
1,741.5
1,760.8
1,752.3
1,768.6
53.3
3.1%
27.0
1.6%
West Midlands
2,290.7
2,312.6
2,286.7
2,308.4
2,324.8
2,323.9
11.3
0.5%
37.2
1.6%
Eastern
2,187.8
2,149.7
2,241.2
2,266.1
2,283.6
2,328.1
178.4
8.3%
86.9
3.9%
London
3,764.1
3,957.0
4,060.7
4,016.5
3,932.1
3,907.0
-50.0
-1.3%
-153.6
-3.8%
North East North West
1999-2003
2000-2003
South East
3,425.1
3,598.1
3,663.5
3,663.8
3,677.2
3,632.9
34.8
1.0%
-30.6
-0.8%
South West
1,950.9
1,991.2
2,032.1
2,098.6
2,123.4
2,152.4
161.2
8.1%
120.3
5.9%
21,155.0
21,590.8
21,911.1
22,100.9
22,212.8
22,302.1
711.3
3.3%
391.0
1.8%
England Source: ABI
Table 3-2: Change in Type of Employees in Employment, 1999 to 2003 Male
Female 10964.3
10626.4
Full-Time 15084.7
Part-Time 6506.1
England
1999 000s
North West
1999 000s
1421.4
1419.6
1984.8
856.2
England
2003 000s
11317.1
10985.0
15205.8
7096.3
North West
2003 000s
1516.8
1474.5
2034.3
957.0
England
Change 000s
352.7
358.5
121.1
590.2
North West
Change 000s
England
%
North West
%
% points difference (NW less England)
95.5
54.8
49.5
100.8
3.2%
3.4%
0.8%
9.1%
6.7%
3.9%
2.5%
11.8%
+3.5%
+0.5%
+1.7%
+2.7%
Source: ABI
Page 3
Employment Growth in the North West
4.
In Which Sectors has the Growth Occurred?
4.1
The main sectors where growth has occurred have been:
4.2
•
Public sector services (+75k jobs or a growth of 10% in line with the 11% growth for all England) (split 25k growth in education and 46k growth in health/social care and 5k in public admin)
•
Financial and business services (+71k or 16%, much faster than the England average of 7%) – all the net growth has been in business services (employment actually declined on average in financial services)
•
Distribution, hotels and catering (+42k or 6% in line with the England average of 6%)
•
Transport and communications (+25k or 16%, much faster than the England average of 3%).
An interesting feature of the data in Table 4-1 is the important role played by medium sized employment units in net employment growth (especially retail/hotels/catering public admin/health). Larger employment units were a key source of employment growth in transport/communications, public admin/health and financial and business services. The negligible contribution of growth in smaller employment units is also noticeable (a national feature).
Table 4-1: Change in Employees in Employment by size band of Data Unit and broad sector 1999-2003, 000s Size Band –No. of Employees North West Agriculture and fishing (SIC A, B)
1-10 0.3
11-49
50199
0.3
0.3
% Change
200 or more 0.0
All
North West
England
0.9
23%
10%
Energy and water (SIC C, E)
-0.1
0.1
-1.6
-5.4
-7.0
-42%
-7%
Manufacturing (SIC D)
-6.4
-9.1
-18.7
-47.2
-81.5
-16%
-17%
0.9
3.4
7.2
1.8
13.3
11%
3%
Construction (SIC F) Distribution, hotels and restaurants (SIC G, H)
-7.0
20.3
28.6
-0.2
41.7
6%
6%
Transport and communications (SIC I)
2.0
4.2
0.9
18.0
25.1
16%
3%
Financial and Business Services (SIC J, K)
10.2
11.5
22.2
27.4
71.3
16%
7%
Public administration, education & health (SIC L, M, N)
-4.3
13.7
31.4
33.8
74.7
10%
11%
1.1
2.3
7.7
4.6
15.6
13%
8%
-3.2
46.7
77.9
32.8
154.2
5.5%
3.5%
Other services (SIC O, P, Q) Total Total %
-0.6%
6.6%
12.1%
3.6%
5.5%
All England %
-1.4%
6.8%
9.6%
-0.1%
3.5%
Source: ONS, ABI Note: employee size is of a data unit which corresponds to a place of work - office, shop factory etc
Page 4
Employment Growth in the North West
4.3
At a more detailed sectoral level the main areas of employment growth have been as shown in Table 4-2. •
First, the region has performed quite strongly in absolute and relative terms in employment creation in key traded services (computer and related, 13,000 jobs and 37% growth; other (specialised) business services, 50,000 jobs and 19% growth).
•
Second, on the whole, growth or decline in most sectors tends broadly to follow national trends.
•
Third, key aspects of financial services employment in the region has grown, bucking the national trend of decline.
Table 4-2: Detailed Pattern of Sectoral Employment Change, North West 1999-2003 Employment growth 19992003 Major Regional Employment Growth (over 10,000 jobs)
Change Much Better than National Rate (over 10%)
Change Similar or Slightly better than National Rate
• • • •
Other business activities Construction Computer and related Real estate activities
• • •
Health and social work Hotels and restaurants Supporting transport activities
Significant growth (4,000 to 10,000 jobs)
• •
Land transport Financial services (except insurance and pension funding)
• • • •
Recreational, cultural and sporting activities Communications Personal services Public administration
Significant decline (4,000 to 10,000 jobs)
•
• • • • • • • • •
Metal products Chemicals and chemical products Garages Wholesaling Transport equipment Food and Drink Clothing Other machinery and equipment Textiles
Source: ABI © Crown Copyright and Regeneris Consulting analysis
Page 5
Change Worse than National Rate (by over 2%) • •
Education Retailing
• •
Water Insurance and pension funding, except compulsory social security Automotive Pulp and paper Electrical machinery
• • •
Employment Growth in the North West
5.
Where has the Growth Taken Place?
5.1
There has been employment growth in all sub-regions. In percentage terms it has been fastest in Lancashire, Greater Merseyside and Cumbria since 1999, but in absolute terms largest in Greater Manchester (see Table 5-1). At a sub-regional level the main jobs growth by sector has been as set out in Table 5-2. The key points are:
5.2
5.3
•
There have been falls in financial services employment in all sub-regions bar Greater Merseyside
•
There have been falls in manufacturing (and utilities/energy) employment in all sub-regions – in absolute and % terms the greatest falls have been in Greater Manchester (a loss of 41k jobs)
•
There has been strong growth in construction employment in Lancashire and retail in Cumbria
•
Strong growth in hotels/restaurants in Cumbria, Greater Manchester and Greater Merseyside
•
The strong regional growth in business services (72k) has been concentrated in Greater Manchester (44k) and to a lesser extent Lancashire (15K)
•
There was a fall in public admin in Greater Manchester, but offset by the growth in Greater Merseyside.
We have also analysed the key employment growth hotspot districts (see Table 5-4). It is important to place some caveats on this data, ABI estimates are not always reliable at a local authority area and there can be fluctuations from year to year reflecting statistical anomalies. The data highlights the absolute importance of Manchester and Liverpool (and immediate surrounding districts such as Trafford) to total employment growth. These two main centres account for around a sixth of all employment in the region and, not surprisingly, have been two major sources of net employment change. Over the period 2000 to 2003 they accounted for a quarter of all net new jobs. Other key centres are: •
St Helens, Knowsley (since 1999) and Sefton in Greater Merseyside;
•
Rochdale in Greater Manchester;
•
The Preston/South Ribble area and Lancaster in Lancashire; and
•
The Chester/Ellesmere Port area in Cheshire (where if growth in North Wales was taken into account would be an even stronger growth area).
However, another feature of the tables is the considerable dispersion of employment growth and the fact that over the period 2000-2003 only 5 out of the 43 North West district experienced employment decline. This of course partly reflects the importance of public services employment growth (which is quite widely spread).
Page 6
Employment Growth in the North West
Table 5-1: Changes in Employees in Employment, 1999 to 2003 Data
Cheshire
Cumbria
Greater Manchester
Greater Merseyside
Lancashire
1999
413.6
192.4
1118.1
554.2
562.6
2841.0
2000
397.8
197.9
1122.6
553.9
573.8
2846.0
2001
417.0
184.9
1131.2
578.6
582.9
2894.7
2002
423.0
200.6
1145.8
601.6
597.5
2968.4
2003
420.8
210.0
1169.6
594.4
596.5
2991.3
7.2
17.6
51.5
40.1
33.9
150.3
% Change
1.7%
9.1%
4.6%
7.2%
6.0%
5.3%
Absolute Change 2000-03
23.1
12.1
46.9
40.5
22.7
145.3
% Change
5.8%
6.1%
4.2%
7.3%
3.9%
5.1%
Absolute Change 1999-03
North West
Source: ABI
Table 5-2: Sub-Regional Sectoral Change, Absolute Change 1999-2003 (000s) Cheshire
Cumbria
Greater Manchester
Greater Merseyside
Lancashire
North West
D : Manufacturing
-7.8
-3.7
-40.6
-13.7
-15.6
E : Electricity, gas and water supply
-1.7
0.0
-4.4
-0.2
-0.6
-6.9
F : Construction
-1.3
0.6
4.8
2.8
6.5
13.3
-81.5
G : Wholesale and retail trade; repair
0.0
8.2
1.4
4.7
1.0
15.4
H : Hotels and restaurants
0.6
3.1
10.5
8.3
3.8
26.3
I : Transport, storage and communication
2.2
1.0
17.1
3.1
1.7
25.1
-1.1
-2.0
-0.3
3.9
-1.5
-1.0
2.3
3.6
44.0
7.8
14.6
72.3
L : Public administration and defence
3.8
-0.2
-6.1
6.9
-0.1
4.3
M : Education
4.8
1.1
4.4
-0.6
15.2
24.8
J : Financial intermediation K : Real estate, renting and business activities
N : Health and social work
5.8
4.6
12.6
15.8
6.8
45.6
O : Other community, social and personal service activities
0.4
2.2
8.6
1.6
2.8
15.6
TOTAL
8.0
18.6
51.9
40.2
34.7
153.4
Page 7
Employment Growth in the North West
Table 5-3: Sub-Regional Sectoral Change, Percentage Change and Share of Net Growth 19992003 North West
Cheshire
Cumbria
Greater Manchester
Greater Merseyside
Lancashire
D : Manufacturing
-12%
-8%
-21%
-17%
-12%
-16%
E : Electricity, gas and water supply
-47%
-6%
-69%
-17%
-23%
-48% 11%
F : Construction
-5%
7%
9%
15%
28%
G : Wholesale and retail trade; repair
0%
24%
1%
5%
1%
3%
H : Hotels and restaurants
2%
17%
17%
25%
10%
15%
I : Transport, storage and communication
10%
12%
25%
10%
6%
16%
J : Financial intermediation
-6%
-39%
-1%
22%
-11%
-1% 20%
K : Real estate, renting and business activities
3%
25%
28%
12%
30%
L : Public administration and defence
27%
-2%
-10%
16%
0%
3%
M : Education
16%
7%
4%
-1%
35%
10%
N : Health and social work
17%
22%
11%
20%
10%
15%
2%
27%
17%
6%
12%
13%
2.0%
9.9%
4.6%
7.3%
6.3%
5.4%
D : Manufacturing
-98%
-20%
-78%
-34%
-45%
-53%
E : Electricity, gas and water supply
-22%
0%
-9%
0%
-2%
-5%
F : Construction
-16%
3%
9%
7%
19%
9%
1%
44%
3%
12%
3%
10%
O : Other community, social and personal service activities TOTAL
Share of Net Growth
G : Wholesale and retail trade; repair H : Hotels and restaurants
8%
17%
20%
21%
11%
17%
27%
6%
33%
8%
5%
16%
J : Financial intermediation
-14%
-11%
-1%
10%
-4%
-1%
K : Real estate, renting and business activities
29%
19%
85%
19%
42%
47%
L : Public administration and defence
47%
-1%
-12%
17%
0%
3%
M : Education
60%
6%
8%
-1%
44%
16%
73%
25%
24%
39%
20%
30%
5%
12%
17%
4%
8%
10%
100%
100%
100%
100%
100%
100%
I : Transport, storage and communication
N : Health and social work O : Other community, social and personal service activities TOTAL Source: ABI
Page 8
Employment Growth in the North West
Table 5-4: Change in Employees in Employment, 1999 to 2003, by Local Authority (ranked by absolute change, 2000 to 2003) Area
sub region
NorthWest
1999
2000
2001
2002
2003
000s
000s
000s
000s
000s
000s
2000-2003 %
000s
1999-2003 %
2841.0
2846.0
2894.7
2968.4
2991.3
145.3
5.1%
150.3
5.3%
Liverpool
Greater Merseyside
207.4
197.0
212.2
220.1
217.1
20.1
10.2%
9.7
4.7%
Manchester
Greater Manchester
280.9
286.3
292.8
302.9
302.5
16.2
5.7%
21.6
7.7%
Trafford
Greater Manchester
123.0
121.4
126.9
125.7
129.3
7.9
6.5%
6.3
5.1%
Rochdale
Greater Manchester
70.9
73.0
73.6
74.5
80.8
7.8
10.6%
9.8
13.9%
Preston
Lancashire
77.5
79.5
82.0
91.1
86.8
7.4
9.3%
9.3
12.0%
St Helens
Greater Merseyside
55.2
56.1
63.4
67.2
63.4
7.4
13.1%
8.2
14.8%
Sefton
Greater Merseyside
95.7
98.9
99.9
104.9
106.2
7.3
7.4%
10.5
11.0%
Lancaster
Lancashire
49.1
48.1
51.1
53.4
53.9
5.8
12.1%
4.8
9.8%
Chester
Cheshire
69.4
65.1
68.2
69.8
70.7
5.6
8.6%
1.3
1.9%
Tameside
Greater Manchester
68.9
68.4
68.9
71.3
73.2
4.8
7.1%
4.3
6.2%
Ellesmere Port and Neston
Cheshire
33.4
30.3
32.0
32.7
34.7
4.4
14.6%
1.3
3.9%
Bury
Greater Manchester
59.9
59.1
59.5
59.9
63.6
4.4
7.5%
3.6
6.1%
Macclesfield
Cheshire
79.5
74.5
80.7
79.9
78.8
4.3
5.8%
-0.7
-0.9%
South Ribble
Lancashire
37.6
39.5
40.3
42.2
43.6
4.2
10.5%
6.1
16.2%
Warrington
Cheshire
108.4
105.0
109.5
115.3
108.6
3.6
3.4%
0.2
0.2%
Crewe and Nantwich
Cheshire
45.0
46.2
47.7
47.8
49.6
3.4
7.3%
4.5
10.1%
Chorley
Lancashire
31.9
36.0
36.5
39.0
39.3
3.3
9.1%
7.4
23.2%
Carlisle
Cumbria
47.4
49.3
46.1
50.7
52.4
3.1
6.3%
5.0
10.5%
Wyre
Lancashire
28.2
30.7
29.0
29.5
33.7
3.1
10.0%
5.6
19.7%
Knowsley
Greater Merseyside
44.0
51.4
53.7
56.2
54.3
2.9
5.6%
10.3
23.3%
Ribble Valley
Lancashire
21.8
22.8
23.2
25.7
25.3
2.5
11.0%
3.5
15.8%
Eden
Cumbria
20.0
20.8
19.7
20.5
23.2
2.3
11.0%
3.2
15.9%
Bolton
Greater Manchester
110.8
108.3
107.6
105.1
110.5
2.2
2.1%
-0.3
-0.3%
Barrow-in-Furness
Cumbria
22.5
22.9
22.7
25.3
25.1
2.2
9.7%
2.6
11.5%
Vale Royal
Cheshire
46.0
45.2
46.8
46.3
47.3
2.1
4.5%
1.2
2.7%
Pendle
Lancashire
29.6
29.7
30.6
32.3
31.7
2.0
6.6%
2.0
6.9%
Salford
Greater Manchester
108.9
111.2
107.6
114.1
113.0
1.9
1.7%
4.2
3.8%
Copeland
Cumbria
28.1
27.8
26.3
27.9
29.6
1.8
6.4%
1.5
5.5%
Wirral
Greater Merseyside
102.6
99.7
97.6
101.7
101.4
1.7
1.7%
-1.2
-1.1%
Allerdale
Cumbria
31.9
32.5
30.3
31.7
34.1
1.6
5.0%
2.2
6.8%
Hyndburn
Lancashire
28.6
28.7
28.4
28.4
30.2
1.5
5.2%
1.5
5.4%
Halton
Greater Merseyside
49.3
50.8
51.8
51.5
51.9
1.1
2.2%
2.6
5.3%
South Lakeland
Cumbria
42.6
44.6
39.8
44.5
45.7
1.1
2.5%
3.1
7.3%
Stockport
Greater Manchester
118.0
116.4
115.6
115.6
117.3
0.9
0.8%
-0.7
-0.6%
Blackburn with Darwen
Lancashire
59.4
60.8
61.4
61.8
61.7
0.9
1.5%
2.4
4.0%
Wigan
Greater Manchester
95.5
99.7
100.2
98.3
100.4
0.7
0.7%
4.9
5.1%
West Lancashire
Lancashire
36.5
38.3
40.3
40.8
38.9
0.7
1.7%
2.4
6.6%
Oldham
Greater Manchester
81.0
78.9
78.6
78.5
78.9
0.0
0.1%
-2.1
-2.6%
Burnley
Lancashire
36.1
35.2
35.6
35.9
35.1
-0.1
-0.2%
-1.0
-2.8%
Fylde
Lancashire
41.5
38.8
40.2
34.3
38.7
-0.1
-0.3%
-2.8
-6.8%
Congleton
Cheshire
31.9
31.5
32.1
31.2
31.2
-0.3
-0.9%
-0.7
-2.2%
Rossendale
Lancashire
24.4
24.3
23.1
21.0
21.5
-2.9
-11.8%
-2.9
-12.0%
Blackpool
Lancashire
60.4
61.6
61.4
62.2
56.1
-5.5
-9.0%
-4.3
-7.1%
Source: ABI Note: Districts ranked by absolute change in employees in employment 2000 to 2003
Page 9
Employment Growth in the North West
Page 10
NORTHWEST REGIONAL DEVELOPMENT AGENCY
NORTH WEST ECONOMIC BASELINE: FULL REPORT APPENDIX B: BIBLIOGRAPHY
July 2005 Regeneris Consulting 1-5 The Downs Altrincham WA14 2QD Tel: 0161 926 9214 Fax: 0161 926 8545 Web: www.regeneris.co.uk
Author
Date
Title
5050Vision Age Concern Calvin Jones, Max Munday and Annette Roberts Urban Studies,
October 2004 March 2004
Productive Ageing: The Changing Role of Older People in the Workplace The English Regions and Population Ageing
December 2003
Regional Tourism Satellite Accounts: A Useful Policy Tool?
CBI, The Voice of Engineering
2002
The Climate Change Levy: First year assessment
Centre for Urban and Regional Studies
May 2003
Cheshire and Warrington Economic Alliance
October 2004
Commission of the European Communities
February 2005
Commission of the European Communities Countryside Council for Wales, English Nature, Environment Agency, Environmental Change Institute Countryside Council for Wales, English Nature, Environment Agency, Royal Society for the Protection of Birds Countryside Council for Wales, English Nature, Environment Agency, Royal Society for the Protection of Birds Cumbria Rural Action Zone Steering Group Department for Culture, Media and Sport Department for Education and Skills Department for Employment and Learning Department for Environment Food & Rural Affairs Department for Transport Department of the Environment, Transport and the Regions. Department of Transport, Local Government and the Regions DTI
February 2006
Changing housing markets in Cheshire, Cumbria and Lancashire Investing in Success: The Sub-regional Economic Strategy for Cheshire and Warrington Lisbon Action Plan Incorporating EU Lisbon Programme and Recommendations for Actions to Member States for Inclusion in their National Lisbon Programmes Working together for growth and jobs: A new Start for the Lisbon Strategy Strategic Environmental Assessment and Climate Change:Guidance for Practitioners
May 2004 June 2004
Strategic Environmental Assessment and Biodiversity: Guidance for Practitioners
June 2004
Strategic Environmental Assessment and Biodiversity: Guidance for Practitioners
June 2002 2000 2003 January 2004 2002 December 2003
Next Steps: Cumbria Rural Action Zone Strategy A Sporting Future for All 14–19: Opportunity and Excellence Volume 1 Higher education business interaction survey 2001-02 Working for the Essentials of Life The Future Development of Air Transport in the UK: A National Consultation
November 2000
Our countryside: The future. A fair deal for rural England
December 2001
Planning: Green Paper
2002
The Government's Manufacturing Strategy
2
Author
Date
Title
DTI
2000
DTI, HM Treasury, Department for Education and Skills East Lancashire Partnership
July 2002 2004
European Spatial Development Partnership
May 1999
Forest Enterprise Forestry Commission Government Office For the North West, NWDA, NWRA Government Office for the North West, Pion Economics GVA Grimley HM Treasury
2003 1999 2005 December 2004 Autumn 2004 2001
John Glester Consultancy Services
July 2004
Lancashire West Partnership
December 2002
Lancashire West Partnership
October 2001
Liverpool City Council Liverpool City Council, Manchester City Council, NWDA Liverpool First Board Liverpool Strategic Employment Partnership Liverpool Strategic Employment Partnership LOCUM DESTINATION CONSULTING LOCUM DESTINATION CONSULTING Manchester City Council, Stockport Metropolitan Borough Council, Trafford Metropolitan Borough, Salford City Council, Manchester Enterprises, Tameside Borough Council Manchester Enterprises Marketing Manchester Mersey Dee Alliance task group MORI MORI
May 2003 November 2001 2003 2004 March 2004 March 2003 January 2005
Excellence and Opportunity, a science and innovation policy for the 21st century Investing in Innovation, A Strategy for Science, Engineering, and Technology The Strategy for East Lancashire's future 2004-2007 Towards Balanced and Sustaiable Development of the Territory of the Eurpean Union Forest Enterprise Annual Report 2001-2002 ENGLAND FORESTRY STRATEGY North West Regional Emphasis Document State of the North West Region - Vital Signs Regional office market outlook outlook the next three years Productivity in the UK: Progress towards a productive economy 3rd Draft Sustainable Cumbria: An holistic strategy for economic, social and environmental progress Lancashire West Connected Business Plan Lancashire West Matters A new vision and strategy for developing Lancashire West Socio-Economic Impact Assessment of Liverpool's Bid Liverpool Manchester Vision: Strategy and Action Plan Liverpool Core Cities Prospectus Employment Business Plan 2004/5 Building Economically Sustainable Neighbourhoods in Liverpool A new Vision for North West Coastal Resorts - Final Report A new Vision for North West Coastal Resorts - Final Report
2003
Manchester Sub-region Economic Development Plan April 2003 March 2006
2005 July 2003 2003 2004 February 2004
Greater Manchester Economic Development Plan 2004/05 – 2006/07 Draft: A Five Year Tourism Strategy for Greater Manchester 2003-2008 Mersey Dee Alliance Transport Needs and Accessibility Improvement Study Perceptions of England’ s Northwest and NWDA 2001-03 Perceptions of England's Northwest 2003
3
Author
Date
Title
North West Cultural Consortium, NWDA North West Energy Council North West Freight Advisory Group North West Freight Advisory Group North West Regional Assembly North West Regional Assembly North West Regional Housing Board North West Regional Technical Advisory Body Northern Way Steering Group Northern Way Steering Group Northwest Development Agency NorthWest Science NW Regional Assembly NWDA
July 2001 December 2003 August 2002 November 2003 October 2004 February 2005 2003 February 2004 September 2004 September 2004 February 2004 2004 July 2003 December 2004
The Cultural Strategy for England's North West A Summary of the Northwest Energy Sector 2nd Draft North West Freight Strategy North West Regional Freight Strategy West Cheshire – North East Wales Sub Regional Study Town Centre Assessment Study, Phase 1 Report North West Regional Housing Strategy Waste Management Monitoring Report 2003 Moving Forward: The Northern Way, First Growth Strategy Report Northern Way Growth Strategy, City-Regions Economic Analysis Regional Parks Interim Policy Statement Insider Guide The Scientific Region 2004 Draft for Consultation Regional Waste Strategy England’s Northwest - Science Strategy
NWDA
December 2002
A new future for manufacturing in England’s Northwest, Making Things Better
NWDA NWDA NWDA NWDA NWDA NWDA NWDA NWDA NWDA NWDA NWDA NWDA NWDA
March 2003 March 2004 June 2003 2002 2003 April 2002 December 2001 June 2003 January 2005 October 2003 April 2003 April 2004 July 2003
NWDA
July 2004
NWDA
January 2005
Corporate Plan 2003/04 to 2005/06 A Strategy for Major Events in England's Northwest The Strategy for Tourism in England's Northwest Regional Economic Strategy Review, Consultation Document Regional Economic Strategy Mersey Belt Study Strategic Regional Sites Regional Economic Strategy, Action Plan 2003-2006 NWDA Land Reclamation Activity Mersey Belt Study Policy Statement Strategic Regional Sites First Monitoring Report Strategic Regional Sites Annual Monitoring Report Maritime North West Strategy Final Report Implications of the Regional Economic Strategy for the Regional Housing Strategy A REPORT TO ASSESS THE KEY STRATEGIC REGIONAL TRANSPORT
4
Author
Date
Title
NWDA
November 2002
NWDA, NWRA NWDA, Cumbria County Council, Cheshire County Council, Lancashire County Council NWDA, Innovate Business Evolution NWDA, Northwest Science NWDA. Trade Partners UK NWRA NWRA NWRA NWRA
2002
PRIORITIES: STAGE 2 RAIL THE FUTURE DEVELOPMENT OF AIR TRANSPORT IN THE UNITED KINGDOM: NORTH OF ENGLAND FORMAL CONSULTATION RESPONSE England's Northwest Connected an ICT Strategy for the Region
April 2002
England’s North West, Rural Renaissance, The Regional Rural Recovery Plan
October 2000 2002 April 2001 February 2001 September 2004 January 2004 2004
NWRA
January 2005
NWRA NWRA, NWRDA, GONW AND PARTNERS ODPM ODPM ODPM ODPM ODPM ODPM QA Research Regional Economic Forecasting Panel Regional Economic Forecasting Panel Regional Economic Forecasting Panel Secretary of State for Health Sefton Council
April 2004 2000 July 2004 2000 July 1998 July 2000 August 2004 2004 December 2004 October 2004 December 2004 March 2004 July 2000 January 2005
Social Exclusion Unit
January 2001
Sustainability Northwest
March 2001
England’s North West, Innovation Strategy Science Strategy England's Northwest England’s North West regional international trade strategy 2001/2005 Analysis of Regional Investment Sites The North West Regional Spatial Strategy Issues Paper Regional Planning Guidance Annual Monitoring Report The Region after the Referendum: NWRA Priorities Action for Equality: Celecating Diversity and creating Opportunity for all in the North West of England: Consultation Paper Cumbria Prosperity Priorities Summit ENVIRONMENTAL RESOURCES MANAGEMENT A Draft Practical Guide to the Strategic Environmental Assessment Directive Our towns and cities: the future - full report A New deal for Transport: Better for everyone Transport Ten Year Plan 2000 Previously-Developed Land that may be available for Development in 2003 Our Cities Are Back - Third report of the Core Cities Working Group Cheshire League 2004 State of the Northwest Economy Summary Report Business Forecasts Northwest State of the Northwest Economy Long-term Forecasts The NHS Plan, A plan for investment, A plan for reform A New Vision for Northwest Coastal Resorts: Vision for Southport A New Commitment to Neighbourhood Renewal Strategy, National Strategy Action Plan From Power to Prosperity, Advancing Renewable Energy in Northwest England
5
Author
Date
Title
Task and Finish Group
July 2004
Housing Land Supply, Note of Proceedings
The Mersey Partnership
June 2003
The Liverpool City Region Winning Tourism for England’s North West A Vision and Strategy for Tourism to 2015
The Mersey Partnership The Mersey Partnership The Mersey Partnership The Mersey Partnership The Northern Way Task Group The Northern Way Task Group The Northern Way Task Group The Northwest Development Agency UK TRADE & INVESTMENT
April 2004 September 2004 November 2001 2005 January 2005 January 2005 January 2005 February 2004 2004
Wirral Metropolitan Borough Council
January 2005
Merseyside Economic Review 2004 Gender Agenda Women in Merseyside Economy An Action Plan for the City Region 2002-2005 Merseyside Economic Review 2005 Central Lancashire City Region - Diagnostic Report Manchester City Region Profile Liverpool/Merseyside City Region Profile Perceptions of England’s Northwest 2003 UK INWARD INVESTMENT 2003–2004 A New Vision for Northwest Coastal Resorts: Vision for New Brighton, Hoylake and West Kirby
6
7