Tees Valley mayor: Tackling poverty can help region’s economy thrive

10th Mar 2017

Helping create more and better jobs – and giving people the skills to access them – must be the number one priority for the new Tees Valley mayor after they are elected in May, according to the independent Joseph Rowntree Foundation (JRF).

In its briefing for the candidates standing in May’s elections, JRF says the new post gives Tees Valley an opportunity to deliver inclusive growth – growth that benefits everyone.

Inclusive growth would have clear economic, fiscal and social benefits for the Tees Valley, but this means broadening its economic success beyond its high-growth sectors.

In the Tees Valley, almost 140,000 people are income deprived and more than one in four children live in poverty. Many people face barriers to the jobs market, which is acting as a brake on productivity and prosperity:

  • Increasing the number of people in work is pivotal to delivering inclusive growth in Tees Valley. Some 26% of the working age population is economically inactive (compared to 22% in England), rising as high as 30% in Hartlepool and Middlesbrough. Unemployment is above average and a fifth of working-age households are entirely workless.
  • Growing the number of jobs is clearly a priority for Tees Valley, but the quality of jobs on offer matters too: median full-time weekly wages are around £50 below the national median, and there is considerable variation: from £523 for people living in Stockton-on-Tees to £465 in Redcar and Cleveland.
  • Some 54% of 16 year olds in Tees Valley get 5 GCSEs grade A-C (including Maths and English), but just 30% of children eligible for free school meals achieve the same standard; this falls as low as 25% in Darlington. The England average is one-third.
  • Of the working-age population, the proportion with NVQ level 4 and above (30%) is well below the UK average (37%), and a relatively large proportion (10%) has no qualifications. A significant minority of businesses struggle to recruit, with 29% of vacancies reportedly hard to fill due to skills shortages, higher than the England average (23%).

To deliver inclusive growth, JRF recommends:

  1. Create the conditions for more and better jobs.

    Tees Valley has identified a number of priority industry sectors with growth potential, including advanced manufacturing; process, chemicals and energy; logistics and culture and leisure. The mayor can use their business support skills powers to address issues such as skills shortages or high staff turnover and connect people in poverty to job opportunities in growing sectors. The mayor must also ensure low-paid sectors such as retail and care are supported to boost productivity and wages, working with businesses and industry bodies.

    Use economic development to connect people to opportunities – where economic development, regeneration and investment creates new jobs (either during the building phase or the jobs that then follow), action should be taken to benefit for local people with barriers to the labour market. The mayor can support this activity by using planning obligations more systematically and brokering training and employment support packages to connect people to opportunities

  2. Close the education attainment gap – work with local education authorities and the Regional Schools Commissioner to focus on using evidence effectively and schools supporting one another to improve attainment among children from low income backgrounds. Over time there may be a case for the powers of the Regional Schools Commissioner to transfer to the mayor.
  3. Focus on access and quality in apprenticeships – good apprenticeships help people to get on, and Tees Valley has highlighted the need to increase both the quality and quantity of apprenticeships. The mayor could support the drive for quality by working with learners, businesses and training providers to develop an Apprenticeship Charter setting out standards. Pushing for commissioning responsibilities and power over the apprenticeship levy would enable the mayor to ensure apprenticeships are focused on delivering better employment and earning outcomes.
  4. Use their influence by making inclusive growth an explicit aim of their time in office. In the mayor’s first 100 days, their first actions should be to:
  • Create a cabinet position with responsibility for Inclusive Growth, integrating social and economic policy.
  • Set ambitious targets to focus action on the employment rate, and boosting educational attainment from the early years to adult skills.
  • Convene stakeholders across business, economic development, employment and skills providers, education and early years providers, other public service providers and civil society to develop a city-region wider strategy for inclusive growth and solving poverty.

Katie Schmuecker, head of policy at JRF, said:

“Creating more and better jobs – and ensuring people living across the Tees Valley – can access them will be the number one priority for the new mayor. The Tees Valley has strong potential in a number of high-growth, high-paying sectors, but the mayor must use their powers, budget and influence to ensure everyone can share in the region’s revival.”