Inclusive growth in Liverpool City Region: an agenda for the new Mayor

Joseph Rowntree Foundation

The first Mayor for Liverpool could show how a major city region can achieve more inclusive growth.

Key points

  • The election of a Mayor for Liverpool City Region is an opportunity to demonstrate how to achieve inclusive growth – growth that benefits everyone across the city region. Such an approach would have clear economic, fiscal and social benefits.
  • There has been significant economic and social improvement over the past 15 years, yet 330,000 people in the city region are income deprived and more than one in four children live in poverty.
  • Creating more and better jobs, connecting people in poverty to opportunities and improving people’s prospects should be priorities for the Mayor. These are at the heart of an inclusive growth agenda. Too often local economic strategy overlooks the bottom end of the labour market.
  • Over one in five working-age households are entirely without work (one in seven for England) and there are 70 jobs per 100 residents (compared to 84 for England). When working, nearly one in five families relies on tax credits to top up their low pay (one in seven for England).
  • The Mayor’s power to influence will be as important as their formal powers for making progress. Inclusive growth and solving poverty should be their central organising principles.
  • In their first 100 days a cabinet position responsible for inclusive growth should be created, success measures to deliver inclusive growth defined, and stakeholders from business, civil society and public services convened to develop a city-region-wide strategy for inclusive growth and solving poverty.

The election of the first Mayor for Liverpool City Region is an opportunity to demonstrate how a major city region can achieve more inclusive growth that benefits everyone. Recent political events have demonstrated the need for this. More positively, inclusive growth will enable a stronger and more sustainable economy, and reduce the demands on public spending and benefit society.

Liverpool City Region has improved significantly on a range of social and economic measures in recent years. But there remain significant challenges to creating an inclusive economy: almost 330,000 people are income deprived and more than one in four children lives in poverty. The number of businesses and jobs per resident are lower than the national average, and the employment rate is 6 percentage points lower. Despite this, a significant minority of businesses struggle to recruit, with 20% of vacancies reportedly hard fill due to skills shortages, similar to the England average (22%).

With 55% of people experiencing poverty living in working households in the UK today, the challenge is not simply to get more people into work. Creating more and better jobs and connecting people in poverty to opportunities are essential for an inclusive growth agenda, as the data below shows.

Table 1: Indicators of Prosperity and Inclusion
  Liverpool City Region England
Prosperity
Gross Value Added per capita (£) 19,300 26,200
Jobs per 100 residents 70 84
Businesses per 1,000 residents 30 44
Inclusion
Employment rate 67.7 74.1
Unemployment rate 5.4 5.0
% out of work benefit receipt 13.1 8.4
Median gross weekly pay (full-time) £504 £545

Inclusive growth requires the creation of good jobs, and for people in poverty to be connected to them. This requires a detailed understanding of the barriers to higher employment in Liverpool City Region. The map (Figure 1) shows the places in the city region that are in the fifth most deprived nationally, and their relationship to local labour markets.

Figure 1: Labour Market Disconnection Among Deprived Neighbourhoods in Liverpool City Region

Neighbourhoods in the Liverpool City Region:

  1. Sefton
  2. Wirral
  3. Liverpool
  4. Knowsley
  5. St Helens
  6. Halton

Note: Map shows neighbourhoods that are in the fifth most deprived nationally. Neighbourhoods have been classified according to their relationship with local labour markets:

Disconnected = residents have few work locations accessible;

Connected = residents in the area have many different work locations accessible;

Large number of jobs = neighbourhoods have more jobs than the working age population.

Five steps to more inclusive growth in Liverpool City Region

1. More and better jobs

For an inclusive economy, the number and quality of jobs created is every bit as important as the skills and capabilities of local residents. Growing the number of jobs is clearly a priority for Liverpool City Region, but it’s a matter of quality as well as quantity.

To help deliver more and better jobs, JRF recommends:

  • Raise productivity in low-pay sectors
  • Support growing businesses and sectors to reduce poverty
  • Connect economic development and poverty reduction
  • Maximise the potential of anchor institutions (e.g. local authorities, NHS)

2. Supporting people to move into a good job

At its best, employment support helps people overcome barriers to work, connects them to opportunities that are sustainable and improves their incomes.

To support people to move into work, JRF recommends:

  • Employment support incentivised to focus on poverty
  • Support people with health conditions to work
  • Champion integrated employment and income hubs – a gateway to a range of statutory, voluntary and community sector services makes it easier for people to access what they need
  • Trial different approaches to support people to progress in work

3. Improving people’s prospects

Education and training – both as a child and throughout adult life – has a crucial part to play in delivering inclusive growth and solving poverty.

To improve prospects, JRF recommends:

  • Raise the quality of childcare to get children off to a good start
  • Close the education attainment gap for poorer children
  • Focus on access and quality in apprenticeships
  • Meet all basic skills needs by 2030

4. Planning for inclusive growth

The cost of essentials – especially housing – is as important for solving poverty as increasing incomes. Managing the balance of housing supply across tenure types will be important to ensure that new supply matches local needs.

To plan for inclusive growth JRF recommends:

  • Upgrade the city region’s housing offer, to renew the over-supply of outdated housing in some areas 
  • Develop homes with Living Rents (linked to local incomes so that homes are affordable)
  • Improve housing quality standards in the private rented sector
  • Connect people in poverty through improved transport

5. Using the soft power of the office of Mayor: leadership and governance

Inclusive growth is an agenda, not a new policy initiative – and it will require strong leadership from the Mayor. The Mayor can be the champion of inclusive growth: raising ambition, shaping strategy, inspiring action, marshalling resources, fostering collaboration and asking difficult questions.

JRF recommends the Mayor:

  • Defines and measures success - focusing on who benefits from growth
  • Leads by their actions, to show what can be done
  • Makes inclusive growth a shared agenda for the whole city region

The first 100 days

A Mayor committed to solving poverty and delivering more inclusive growth should make these goals the organising principles for the Mayoral team.

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 quality of jobs, the employment rate, and boost 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-wide strategy for inclusive growth and solving poverty.

To discuss in more detail, please contact info@jrf.org.uk

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