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.

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.

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.

New ONS products to help child poverty analysis

The Office for National Statistics (ONS) have created three products to assist understanding and analysis of child poverty in a locality, as part of  a collaborative project between the ONS East and West Midlands Regional Statisticians, and ONS Area Based Analysis.

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?

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.

The new optimists

Written by leading scientists from the West Midlands, The new optimists is a book detailing the reponses of over 80 scientists to the question”What are you optimistic about?”

The scientists who feature in the book are leading medics, life scientists, engineers, chemists, computer and digital media scientists, environmental and energy experts, all of whom work in the West Midlands.

The official book launch is on 14th September at a celebration dinner in Birmingham, on the evening of the first day of the 2010 British Science Festival which is being held in the city.

Open data: challenges and opportunities

Photo by Andy Mabbett - @pigsonthewing

A star sudded cast of “Open data heroes” graced our event, Open data: Challenges & opportunities, yesterday. Following clear intentions expressed recently by David Cameron and Eric Pickles on opening up public data, it was clear that this was a well timed (and hopefully useful) event. Thanks to everyone who spoke and attended the event – a really great day. Special thanks to Andrew Mackenzie (@djsoup) and Richard Wilson (@rcw1969) for all the help pulling it together.

I was struck by a number of people passionate about using data to make a difference to their community or local area. From Will Perrin’s use of public data on his Kings Cross Environment site to fix street lights, combat drug dealing and remove abandoned cars through to local council officers such as Stuart Harrison at Lichfield District Council using innovative techniques, such as “My Area“, to help people access data from a number of sources.

For now, our Pageflakes page pulls together a lot of the content from the day. Some of the speakers have already shared their presentations (via Slideshare) and they are accessible through pageflakes. We’ll sift through and pull out useful links and information over the next week and will post an update here.

For those that were at the event, or following on twitter via #wmod10, can I encourage comments below on practical steps we might take to move ideas from yesterday forward. In particular, ways that the more able authorities and organisations might be able to help the less able, through sharing tools and techniques with the wider public sector. We discussed writing a crowd-sourced report directed at high level policy makers sharing ideas and practical ways forward.  Do you think this is the best approach? What else did you pick up on? Let’s keep the discussion going.

Replacement demand set to be key source of jobs in West Midlands over next 5 years

An under–representation of higher value added sectors means that the pace of economic growth in the West Midlands over the next 5 years is forecast to be modest. Only 11,000 net new jobs (representing growth of 5% in total employment) are expected to be created between 2010 and 2015.

But the Observatory’s new report The West Midlands economy post recession: key issues and challenges (pdf, 844kb) predicts an additional 860,000 job vacancies are expected to arise between 2010-2015 due to ‘replacement demand.’

It’s estimated that nearly 510,000 jobs (58% of all job vacancies) will be due to labour turnover and more than 350,000 jobs (40% of all vacancies) will be due to older workers retiring.

Text description of this chart available. Chart prepared by West Midlands Regional Observatory based on Cambridge Econometrics forecasts and Office for National Statistics Labour Force Survey.

Replacement demand is forecast to be more significant in traditional private sector industries and public sector activities which have an ageing workforce. For example:

• 59,000 vacancies are expected to arise in manufacturing
• 50,000 vacancies are expected to arise in engineering
• 37,000 vacancies are expected to arise in construction

In health and social care, meanwhile, nearly 70,000 vacancies are expected to arise. The figure is more than 45,000 in education and more than 30,000 in public administration.

Many of the jobs on offer due to retirements are likely to require specific skills, qualifications and experience. Around 90% of these jobs are expected to be filled by people already in employment.

Research published on prospects for the West Midlands economy post recession

At the end of June, the Observatory published The West Midlands Economy Post Recession: Key Issues and Challenges (pdf, 844kb), a major piece of research exploring the changing needs of the region’s economy and labour market as it emerges from recession.

The research is informing the decisions of employers, individuals, providers and the skills system as they look to focus their investment in key areas to maximise impact.

Firstly, the research considers the region’s recent poor economic performance and the key factors that have contributed to this.

We detail the weaknesses within the region’s economic structure and, in particular, the dependence on public sector and lower value added private sector activities, in terms of GVA and jobs, and the limited representation of high value added, knowledge-based sectors.

We also highlight the low rates of productivity in many of the sectors that dominate the regional economy and assess the skill gaps and shortages businesses in the West Midlands face and the impact on productivity and performance.

Recession impacted unemployment numbers but long-term issues around worklessness remain

New research from the Observatory shows the recession has led to nearly 100,000 more unemployed people in the West Midlands but long-term issues around worklessness remain.

The economic inclusion annual report 2010 (pdf, 929kb) identifies how worklessness issues in the West Midlands have changed as a result of the recession, and to what extent long-term issues remain.

In this report we particularly look at the impact of the recession on employment and worklessness in the West Midlands, and which groups of people have been most affected.

The report updates the economic inclusion baseline report (pdf, 2.3mb) published by the Observatory in March 2009, in which we examined long-term issues around worklessness in the West Midlands.

West Midlands population estimated to have grown to 5.431 million in 2009

The population of the West Midlands grew at a lower annual rate than that for England in 2009, according to the latest population estimates released by the Office for National Statistics.

With a population of 5.431 million, the region’s population grew by 0.4 per cent (23,000) on the preceding year.

Natural change (birth minus deaths) was the most significant contributor to the growth at 20,000, whereas net migration accounted for the remainder, and with a value of 3,000, was the lowest of any nation or region in the UK.

Locally within the West Midlands region, the most significant increases in population (in absolute terms) were recorded in:

• Birmingham  – up 10,000 to 1.029 million
• Coventry – up 2,000 to 313,000
• Sandwell – up 2,000 to 291,000

With an increase in population on the preceding year of 0.9 per cent, Birmingham also recorded the largest rate of increase, whereas Stoke-on-Trent’s population is estimated to have decreased by 0.2 per cent.

Across the UK, the population grew to 61.792 million in 2009, an increase of 0.6% on the preceding year, with natural change contributing 217,000 and net migration 177,000.

A detailed breakdown of all the 2009 mid-year population statistics—nationally, regionally and locally, as well as by age groups and gender—are available from the Office for National Statistics.

Upcoming event: multiple risk factors of worklessness

We’re hosting an event on 6th July to share the findings and implications of our recent research looking at how a person’s background and personal characteristics affect the individual’s chance of being out of work.

The report, Worklessness in the West Midlands: the impact of demographics and multiple risk factors (pdf, 545kb), looks in depth at the impact of several ‘risk factors’, in isolation and in combination with each other:

• Being a young person (aged 16–24)
• Being an older person (aged 55 to retirement)
• Being from a black, Indian or Pakistani or ​Bangladeshi ethnic group
• Having a long-​term health problem or disability
• Being a lone parent
• Having no qualifications

The analysis will help decision makers get a greater understanding of the complex interplay of issues behind the current high rate of worklessness across the West Midlands.

The event takes place at the West Midlands Regional Observatory offices (get directions), 8:45–11:00am, 6th July 2010.

It’s free to attend, though please register as places are limited.

• Event agenda (pdf, 94kb)
• Book online (requires registration)
• Download a booking form (doc, 45kb)

New research shows targeted welfare to work provision is necessary to reduce worklessness

Welfare to work programmes aimed at getting people back into work should take a ‘whole person’ approach, rather than tackling factors such as age, ethnicity or disability in isolation, according to new research from the West Midlands Regional Observatory carried out on behalf of the West Midlands Economic Inclusion Panel.

The research findings confirm those of other studies by the Observatory, that the West Midlands has one of the highest rates of worklessness in England, with some disadvantaged groups experiencing much higher rates of worklessness than others.

The latest research provides insights into the major factors influencing a person’s chances of being in or out of work and shows that these can vary greatly according to the individual’s background and personal characteristics.  The research demonstrates how combinations of factors such as having no formal qualifications or a long-term health problem or disability, or being a lone parent, affect a person’s chance of being out of work.

Birmingham wins national award for innovative health improvement programme

Birmingham’s innovative Be Active programme won a national award for health improvement this week.

The collaborative programme run by Birmingham City Council and the local Primary Care Trusts scooped the 2010 Local Government Association’s LGcomms Reputation Campaign Award for improving health.

The Be Active scheme is an extension of ‘Gym For Free’, a pilot project introduced by Heart of Birmingham Teaching NHS Trust and Birmingham City Council in 2008, which offered residents in the Ladywood area of Birmingham access to free gym sessions at council leisure centres. This recently won the national overall Best Public Services award at the Guardian Public Services Awards 2009. Commenting at the Guardian awards ceremony, BBC presenter Jeremy Vine said:

‘This is a fantastic example of a local authority and the NHS thinking imaginatively and working in partnership to make a real difference to people’s lives. The impact has been simply stunning.’