Draft Coventry and Warwickshire local economic assessment for consultation

Warwickshire County Council and Coventry City Council have carried out a sub-regional economic assessment. The draft economic assessment is now available and comments are invited.

The economic assessment and feedback form are available on the Warwickshire County Council website. There are also supporting papers on innovation, future sectoral growth, functional economic geography and business starts and growth.

Local Enterprise Partnerships need to act to reinvigorate the private sector

Weaknesses in the structure of the West Midlands economy mean that it was hit particularly hard by the recent recession and is likely to see further job losses over the next five years.

Our latest briefing paper (pdf, 408kb), produced as part of our West Midlands Skills Assessment 2010, reveals that the West Midlands has a weaker private sector than other parts of the country. The West Midlands has poorer representation of higher value added activities and high growth firms with the potential to create new, skilled jobs.

As a result the West Midlands has seen its share of jobs in the public sector rise more rapidly than anywhere else in the country. It is particularly vulnerable to job losses from the spending cuts announced by the government.

We forecast that West Midlands Gross Value Added (GVA) will grow by only 8% (£8.8 billion) between 2010 and 2015 and there will be a net fall in employment of more than 38,000 people.

Endorsement of our Economic Inclusion research

Here’s a short video featuring Trudi Elliott, Chair of the West Midlands Economic Inclusion Panel, endorsing our economic inclusion research:

Watch on viddler

Local Enterprise Partnerships approved

The Business Secretary, Vince Cable, announced the approval of twenty four local enterprise partnership proposals earlier today. Those approved included the following from the West Midlands:

• Birmingham & Solihull with E. Staffordshire, Lichfield &Tamworth
• Coventry & Warwickshire
• Stoke-on-Trent & Staffordshire
• The Marches

Those not approved at this stage included:

• The Black Country
• Worcestershire
• The West Midlands overarching proposal

Read more on the Birmingham Post website

A map of approved local enterprise partnerships is available from geocommons.com

What will spending cuts mean for the West Midlands?

Tomorrow sees the long awaited publication of the government’s Comprehensive Spending Review. It will end months of speculation by setting up where the cuts in government spending will fall and how deep they will be. But what might it all mean for the West Midlands?

To try and answer this question, the Observatory has carried out a number of pieces of work over the last few weeks. These are summarised in a new report published today.  Amongst its findings are that:

• An estimated £43 billion as spent on public services in the West Midlands in 2008-09 and the public sector employed nearly half a million people
• More than 80,000 public service jobs could be lost in the West Midlands by 2016
• Up to 300,000 private sector jobs are at risk due to spending cuts, although actual job losses will be lower than that
• The places which will be hardest hit in the short term are those with concentrations of public sector jobs, such as Birmingham, Bromsgrove, Dudley, Shrewsbury, Stafford, Wolverhampton and Worcester
• In the longer term, some of these places are likely to recover well, but others will continue to suffer because they have weaker economies. Places most vulnerable in the longer term include Birmingham, Dudley, Sandwell, Stoke-on-Trent, Walsall, Wolverhampton and Wyre Forest (Kidderminster)

The report draws on information from a number of other reports published by the Observatory in recent weeks. These include a briefing paper on the local impact of public sector job cuts, a series of projections based on our Policy Assessment Model and a report identifying locations vulnerable to cuts in public sector spending.

New Fit for the Future articles published: what’s your vision of a low carbon future?

We’ve launched a new website as part of our Fit for the Future project. Earlier this year we asked:

In your view, what would a successful low carbon economy look like and how should the West Midlands transform its economy to meet that vision?

The new website presents five articles given in response, written by contributors working in manufacturing, local government, education, public and voluntary sectors.

We want the articles to stimulate a debate so, this year, we decided to present the articles in an online commentable form. Please do visit the website, have a read and add your comments to the articles.

Local impact of public sector job cuts featured on BBC Politics Show

In advance of the government’s spending review announcement on Wednesday 20 October, the BBC Politics Show West Midlands discussed the impact of public sector job losses in the West Midlands.

They interviewed Andy Phillips, Head of Skills Research at the Observatory, and featured our recent briefing paper which examines the local impact of public sector job cuts (pdf, 351kb).

The story is available to watch on the BBC iPlayer for the next six days.

Unemployment in West Midlands levels off

The labour market figures released September 2010 show a mixed picture for the West Midlands, with increases in employment and decreases in unemployment, but evidence of a slowing of the recovery.

The claimant count reduced by just 600 out of 159,700, and the unemployment rate remained steady at 8.4%.

Worryingly, unemployment and the claimant count seem to be levelling off at a higher level than they were prior to the recession. With the impact of cuts in public spending yet to be seen, this could mean any knock-on effects in the form of future rises in unemployment could wipe out the recovery seen so far.

Key headlines

Unemployment in the West Midlands has fallen again, but the rate of decrease is slowing. There are 226,000 unemployed people in the West Midlands – 13,000 fewer than last quarter, and 58,000 fewer than a year ago. However, in order to return to the July 2008 level of 163,000, we would need to reduce the number of people unemployed by a further 63,000.

The number of people in employment rose by 38,000 over the last quarter. However, there are still fewer people in employment than prior to the recession, and those working part-time now make up a greater proportion of those in employment.

The claimant rate saw a very small decrease of just 600 this month.

Overall the indications are that the falls in unemployment are beginning to level off. Furthermore, the upcoming public sector cuts and the knock-on effects in the private sector are likely to result in renewed increases in unemployment.

Related links

• The Observatory provides analysis of the latest labour market data every month.
• We produce interactive maps showing the proportion of the working age population in the West Midlands claiming Jobseeker’s Allowance:
  • Map for West Midlands local authority district
  • Map for West Midlands wards
• Dataset (xls, 220kb)

West Midlands particularly vulnerable to public sector job cuts

Public sector employment has grown significantly in recent years across the UK and has been the key driver of the economy’s expansion. But proposals announced by the government to make £83bn worth of cuts in public sector spending are forecast to lead to the loss of up to 600,000 public sector jobs across the UK over the next 6 years, according to a study¹ by Oxford Economics.

The West Midlands economy is particularly vulnerable to the impact of the cuts. Between 1998 and 2008 (latest available figures), the West Midlands saw the most significant increase in dependence on public sector employment in the country².

The share of jobs accounted for by the public sector increased from 22% in 1998 to 27% in 2008, a rise of 5 percentage points, bringing total public sector employment to some 637,000.

We forecast that between 2010 and 2016 there will be a net loss of nearly 50,000 jobs across the West Midlands and, based on the ratio of the number of private sector jobs dependent on public sector spending and the associated supply chain nationally, a further 310,000 jobs are at risk at private sector firms directly or indirectly reliant on public sector spending³.

Equality Act 2010 comes into force 1 October – what does it mean?

The Equality Act 2010 brings together nine separate pieces of legislation into one single act simplifying the law and strengthening it in important ways to help tackle discrimination and inequality.

The coalition government announced on 3 July that the first wave of implementation of the Equality Act will take place on 1 October 2010. On this date, the vast majority of the act’s provisions will come into force. There are also some areas of the act which the government is still considering and may come into force at a later date.

Home Secretary and Minister for Women and Equalities Theresa May said:

“By making the law easier to understand, the Equality Act will help business treat staff fairly and meet the needs of a diverse customer base. The law will be easier to understand and better able to protect people from discrimination.

“Implementing the Equality Act to the planned timetable makes clear our commitment to equality. A successful economy needs the full participation of all its citizens and we are committed to implementing the Act in the best way for business.”

To help people understand the new laws, the Government Equalities Office has prepared a series of summary guides: Equality Act 2010: what do I need to know?

West Midlands skills performance falters

The Observatory has published this year’s review of West Midlands skills performance .

Our summary skills index based on a range of measures (such as GVA per employee, investment in training, and qualification attainment amongst young people and adults) reveals the West Midlands skills performance has begun to widen again, from 1.1 points in 2007 to 2.3 points in 2009. As a result the West Midlands has dropped from 5th to 6th place in the league table of regions.

Local enterprise partnership proposals announced

56 proposals for local enterprise partnerships across the country have been submitted, the government has confirmed, following the closing day for submissions.

There are seven proposals from the West Midlands:

• Birmingham and Solihull with East Staffordshire, Lichfield and Tamworth: two page summary (pdf, 17kb) and  the full proposal (doc, 243kb)
• Coventry and Warwickshire (doc, 3.5mb)
• Stoke-on-Trent and Staffordshire (pdf, 1.3mb)
• The Black Country (pdf, 2.74mb)
• The Marches Enterprise Partnership (pdf, 1mb) – Herefordshire, Shropshire and Telford & Wrekin
• West Midlands (an overarching proposal from Business Voice West Midlands)
• Worcestershire (pdf, 603kb)

Three distinct responses in respect to cross boundary working arrangements have also been received from Peak District, South East England and West Leicestershire and Northern Warwickshire.

Here’s the full list of proposals.

Policy Assessment Model (PAM)

There has always been a need for policy to be grounded in evidence, but at a time when money is becoming tighter across the public sector, that need becomes even greater. Resources must be targeted where they can make the most difference. Gaining understanding of the future impact of policy decisions is therefore invaluable.

Past experience and local knowledge can provide some of that understanding, but it can’t tell us everything about the future. That is where tools like the Observatory’s Policy Assessment Model (PAM) come in.

This short slidecast explains why the Policy Assessment Model (PAM) was developed, how it works and how it can be used.

View on viddler | Get slides (ppt,  651kb)

The Policy Assessment Model goes beyond standard forecasting tools (although it will produce forecasts). It allows the direct and indirect impacts of a wide range of policy options and scenarios to be modelled over the long-term, allowing more informed decisions. It is capable of modelling impacts on the economy, the population and the local authorities within the West Midlands.

West Midlands monthly economic update report August 2010

The August 2010 economic update report (pdf, 482kb) from Advantage West Midlands is now available.

The report includes headlines and statistics, both national and from the West Midlands, on the state of the economy, inflation, the labour market, house prices, manufacturing, automotive, services sectors, construction, and retail.

The updates are published monthly here.

Unemployment in West Midlands fallen but still not back to pre-recession levels

Updated monthly data on the West Midlands labour market were released today by the Office for National Statistics.

Key headlines

• Unemployment in the West Midlands has fallen — by 66,000 people over the last year, and 27,000 people in the last quarter. There are, however, 59,000 more unemployed people in the West Midlands than in February 2008.
• Unemployment has fallen faster in the West Midlands than anywhere else in the country over the last year and in the last quarter. However, unemployment rose more sharply here than elsewhere earlier in the recession, so essentially this is a rebalancing of employment levels.
• We’re not out of the woods yet. Employment levels have not yet reached their pre-​recession levels, and we’re expecting a significant loss of public sector jobs in the coming months, which could wipe out the recent drop in unemployment altogether.

Related links

• Read our full analysis of the latest data
• Dataset: proportion of working age population in West Midlands claiming Jobseeker’s Allowance (xls, 220kb)
• Dataset: 18-24 year olds claiming Jobseeker’s Allowance (xls, 220kb)
• Map: proportion of working age population in West Midlands claiming Jobseeker’s Allowance – by local authority district
• Map: proportion of working age population in West Midlands claiming Jobseeker’s Allowance – by ward