Inclusive growth in Tees Valley: an agenda for the new Mayor

Joseph Rowntree Foundation

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

Key points

  • The election of a Mayor for Tees Valley is an opportunity to demonstrate how to achieve inclusive growth – growth that benefits everyone. Such an approach would have clear economic, fiscal and social benefits.
  • Tees Valley is home to world-class expertise in sectors such as process and chemical industries, energy and advanced manufacturing, and it has bold ambitions for growth. It also faces some significant challenges: 140,000 people 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.
  • Employment is a key challenge: 26% of the working-age population is economically inactive and 22% of working-age households have no one in work (compared to 22% and 15% respectively in England). Just under two-thirds (65%) of deprived neighbourhoods are classified as disconnected from the labour market, indicating poor transport links or a skills mismatch.
  • 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 Tees Valley is an opportunity to demonstrate how to 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.

Tees Valley is home to many highly productive, innovative and fast-growing companies. As the economy grows, ensuring that growth is inclusive is a key challenge. This is partly about creating the conditions for more jobs, as the number of businesses and jobs per resident is below the national average, and the employment rate is around 6 percentage points behind. But it is also about better jobs, given 55% of people experiencing poverty in the UK today live in a working household.

In the Tees Valley almost 140,000 people are income deprived and more than one in four children live in poverty. Creating more and better jobs and connecting people in poverty to opportunities are essential for an inclusive growth agenda, as demonstrated by the data below.

Table 1: Indicators of Prosperity and Inclusion
  Tees Valley

England

Prosperity
Gross Value Added per capita (£) 18,900 26,200
Jobs per 100 residents 73 84
Businesses per 1,000 residents 30.7 44
Inclusion
Employment rate 68.4 74.1
Unemployment rate 7.4 5.0
% out of work benefit receipt 13.6 8.4
Median gross weekly pay (full-time) £496 £545

Inclusive growth requires not only the creation of good jobs, but for people in poverty to be connected to them. This requires a detailed understanding of the barriers to higher employment in Tees Valley. The map in Figure 1. shows the places that are in the fifth most deprived nationally, and their relationship to local labour markets.

Figure 1: Labour Market Disconnection Among Deprived Neighbourhoods in Tees Valley

Neighbourhoods in the Tees Valley:

  1. Darlington
  2. Stockton-On-Tees
  3. Hartlepool
  4. Middlesborough
  5. Redcar and Cleveland

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 Tees Valley

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 Tees Valley, but it’s a matter of quality as well as quantity.

To help deliver more and better jobs JRF recommends:

  • Support growing businesses and sectors to deliver good jobs
  • Raise productivity in low-pay sectors
  • Use economic development to connect people to opportunities
  • 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 disabled people and those 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 prospects

Education and training – both as a child and throughout adult life – has a crucial part to play in 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
  • Meet all basic skills needs by 2030
  • Focus on access and quality in apprenticeships

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:

  • Connect people in poverty through improved transport
  • Create places people want to live via housing-led regeneration
  • Develop homes with Living Rents (linked to local incomes so that homes are affordable)
  • Improve housing quality standards in the private rented sector

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 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-wide strategy for inclusive growth and solving poverty.

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

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