It highlights the areas that need to be included in Theresa May’s plans for an industrial strategy ‘to make Britain work for all’, particularly in the North Powerhouse and the Midlands Engine.
The report, Overcoming deprivation and disconnection in UK cities, found thousands of areas are unable to share in the country’s record employment levels because people living there are disconnected from the jobs on offer, often because they lack the skills to take up the available roles. Health problems and the type and quality of jobs are also barriers.
As the Economy and Industrial Strategy Cabinet Committee considers how to boost growth and productivity across the country, forthcoming JRF analysis suggests improving the skills of people living in poverty by could boost the Treasury by £4 billion by 2020. JRF will launch its strategy to solve poverty in the UK next month.
Overcoming deprivation and disconnection in UK cities analysed the connection of the country’s 20% most deprived neighbourhoods to the labour market over the last decade.
34% of neighbourhoods in Core Cities (the 10 biggest cities outside of London) are in the fifth most deprived nationally, showing despite enjoying strong economic and jobs growth over the last decade, many areas are left behind from their city’s success. The Core Cities have been the focus of devolution deals and efforts to rebalance the economy.
Around 12.5 million people live in the 20% most deprived areas, around 8,500 neighbourhoods, across the country. Of these:
- 2.44 million people live in the Core Cities in deprived areas - 1579 deprived neighbourhoods
- 2,892 of deprived neighbourhoods overall are in the Northern Powerhouse, a third of the UK total (34.3%)
- 2300 are classified as in Primary Employment Zones, deprived areas which also happen to have high numbers of jobs in them – 429 in the Core Cities.
Of the Core Cities:
- Manchester has more jobs than working age people, yet only 62% are in work. Three fifths of neighbourhoods are in the 20% most deprived nationally and a quarter of those have ‘jobs on the doorstep’.
- Leeds has a smaller percentage of deprived neighbourhoods than other Core Cities (31%), but nearly a third of these are in areas with more jobs than working age people
- Liverpool has the highest proportion of deprived neighbourhoods of any of the Core Cities; more than three fifths are in the fifth most deprived nationally.
- Glasgow has more jobs than working age people, yet only two thirds are in work, and half of neighbourhoods are in the fifth most deprived in Scotland.
- In Cardiff more than a fifth of deprived neighbourhoods are not benefitting from jobs on their doorstep.
- 350 of the 640 neighbourhoods in Birmingham are in the fifth most deprived in England. More than a quarter of these have jobs on the doorstep.
- In Sheffield, just over a third of neighbourhoods are deprived, and more than a third of these are geographically disconnected from the labour market, a higher rate than most other core cities.
- Nottingham has more jobs than working age people, yet three fifths of neighbourhoods are in the most deprived nationally.
- Two fifth of deprived neighbourhoods in Newcastle have jobs on the doorstep, the highest rate among the core cities.
- In Bristol, more than half of deprived neighbourhoods are disconnected from the labour market, far higher than any other core city.
JRF is calling on the Economy and Industrial Strategy Cabinet Committee, new metro mayors and businesses to harness their efforts to ensure the areas are not left behind, and develop a strategy which ensures everyone can benefit from record employment. JRF recommends:
- Metro mayors target their new powers over adult skills, transport and housing to improve connections between deprived neighbourhoods and local jobs.
- Using forthcoming devolution of the adult skills budget to bring together employers, employees and training providers to deliver the skills that are needed in the local economy, and to help create more and better jobs.
- Securing EU regional developing funding allocated to 2020 as part of Brexit negotiations. Longer term, the government needs to earmark at least an equivalent level of funding to create a Rebalancing Fund, allocated to devolved administrations and Local Enterprise Partnerships (LEPs) to support inclusive growth and employment in lagging towns and cities.
- Creating an Inclusive Growth Fund, in the style envisaged by Lord Heseltine’s ‘single pot’, to link people and places in poverty to growth. This would cover employment and business support, economic development, housing and regeneration.
- Local anchor institutions – the biggest employers and spenders in local areas – use procurement policy to create job opportunities and apprenticeships for people living in neighbourhoods disconnected from the labour market. Businesses can also make better use of local supply chains in disconnected areas to create more demands and opportunities for people living there.
Josh Stott, head of cities at JRF, said:
“Cities are engines of growth and many have created significant numbers of jobs in recent years. They have rightly been the focus of attempts to rebalance the economy, but this analysis shows people and places have been left behind, despite seeing rising prosperity on their doorsteps.
“Our research shows how rising employment alone will not tackle entrenched pockets of deprivation. To make Britain work for all, we need to connect growth in cities to deprived neighbourhoods, and an industrial strategy which provides skills that business needs.
“The rewards in return are significant, improving the living standards and opportunities for people on low incomes across the country and helping business improve their productivity. The Treasury and mayors feel the benefit in their coffers from increased tax take by ensuring everyone can contribute.”
Alasdair Rae, author of the report from the University of Sheffield, said:
“Our research shows that some poorer neighbourhoods have not been able to fully benefit from the economic growth that has occurred in their wider cities over the past decade. This can be seen all across the UK, and particularly in the core cities. In fact, some areas face a kind of ‘double disadvantage’ in that they are not very well connected to local jobs and also not well connected to their local housing market.
“The challenge now is therefore to find ways to ensure that economic growth is more inclusive and that no neighbourhood is left behind. We think specific policy mechanisms are needed to solve this ongoing challenge and hope that our research can make a contribution to that effort.”
Full breakdown for Core Cities
of the economy
|Neighbourhoods in the most 20% deprived nationally||Deprived neighbourhoods with jobs on the doorstep – (Primary Employment Zones)|
|GVA per capita||Jobs per 100 working age people||Employment rate||#||%||#||% of deprived neighbourhoods|
Notes: all figures from 2014, as most recent year of data available. Core City boundaries are at the local authority area.
Sources: ONS Regional GVA, NOMIS official labour market statistics, English, Welsh and Scottish indices of multiple deprivation, ONS population projections, Rae et al. (2016) Overcoming deprivation and disconnection in UK cities