220 - UK Recession - Recovery - Cities-The Work Foundation

Recession and Recovery: How UK Cities can respond and drive the recovery
Authors: Neil Lee, Katy Morris and Alexandra Jones of The Work Foundation
Contents
Executive Summary 1. Introduction Leadership in a crisis 2. Evidence of the impact of the recession 3. UK local responses to the recession 4. International responses to the recession 5. Conclusions and policy recommendations
4 10 13 27 58 68
Recession and Recovery: How UK cities can respond and drive the recovery
Contents
List of Figure and Tables Figure 2.1: Male and female unemployment rate Figure 2.2: Increase in unemployment rate by age (Jan/Mar 2007 vs Jan/Mar 2009) Figure 2.3: Migration Figure 2.4: Cities (travel to work areas) qualifications and increases in the number of claimants Figure 2.5: Local Authorities qualifications and increases in the number of claimants Figure 2.6: Relationship between qualifications and claimant count Figure 2.7: Employment by sector and increase in the claimant count Figure 2.8: Employment in financial services and increase in the claimant count Figure 4.1: Unemployment in selected international cities Figure 4.2: Change in unemployment in selected international cities Figure 4.3: House Price Index (selected cities) 17 18 20 22 23 24 25 26 59 59 60
Table 2.1: Forecasts for GDP growth Table 3.1: Overview of local government areas of influence Table 3.2: City economies recessionary impact and local response Table 3.3: People and labour markets recessionary impact and local response Table 3.4: Local leadership recessionary impact and local response Table 3.5: Quality of place recessionary impact and local response Table 3.6: Preparing for the upturn recessionary impact and local response
14 29 32 37 43 46 51
Executive Summary
About this report
Understanding the impact of the recession and practical ways in which city leaders can respond is vital. This report aims to investigate and contribute to this response. It asks four questions: How has the recession impacted on UK cities? How have UK cities responded? How does this compare to the response of international cities? What should policymakers do to minimize the impact and prepare for the upturn?
This report is one of a series of reports on the recession which have been published simultaneously. These are: An OECD report reviewing the responses of international leaders to the recession; An appendix containing the UK case studies from which much of this analysis is taken; A companion paper presenting some of the empirical data on the impact of the recession.
What has the impact of the recession been on UK cities?
The effects of the global crisis have been felt at a local level, with local leaders at the forefront of the response to the recession. Yet they face a challenging time: as their incomes decline, demand for their services is increasing.
Contrary to early expectations, the recession has not affected London and the South East the most. The recession has reflected existing patterns of economic decline: the greatest job losses have been in ex-industrial areas such as the West Midlands.
One of the key reasons for this is the skill levels of the workforce. Cities with highly skilled populations have experienced the smallest increases in unemployment, those with low skill levels have experienced the largest increases.
Cities reliant on financial services employment have not in general performed worse where they have, it has tended to be those located outside the South East. This is because job losses have often been higher in retail banking and support services, which tend to be located outside the capital.
Executive Summary
How have UK cities responded?
UK cities have been the engines of the UK economy in the last ten years and will be vital to the recovery. Based on our twelve UK case studies, many cities are taking innovative action to mitigate the effects of rising unemployment and position cities to drive the recovery, even where funding and powers have been limited. It is vital that cities learn from each others responses and a summary of these is set out in the box below.
City economy. Cities have sought to improve their local economies by: Improving business access to credit through working as lender to local firms, engaging with banks, supporting the expansion of credit unions and paying invoices promptly. Increasing demand for local firms by making them aware of local authority tender opportunities, supporting business information and networking events in partnerships with universities and colleges, and supporting retail. Reducing business cost reducing rent and service charges for business in local authority owned properties and campaigning to increase take-up of Small Business Rate Relief. People and labour markets. Cities have focused efforts on minimizing the impact to local people by: Working to minimize the impact of job losses working with large employers to investigate short time working schemes and lobbying for a fair deal for workers. Tackling youth unemployment expanding apprenticeship schemes and targeting university and school leavers. Investing in skills working to retrain the unemployed and enhancing training provision. Tackling high consumer debt launching workshops and projects to give debt advice to local residents. Publicising existing vacancies improving information about available opportunities by publicising them more widely. Addressing ongoing deprivation are not ignoring existing problems of social exclusion and working to ensure these tackled as well.
Executive Summary
Local leadership. Cities have used their role as local leaders to anchor the response from a variety of local partners by: Monitoring the local situation councils are convening high level stakeholder groups, conducting business surveys and monitoring the economic situation closely. Coordinating responses from multiple partners some innovative local authorities have bought together a range of local stakeholders for coordinated campaigns. Reducing the tax burden local authorities have worked hard to ensure council tax rises are minimised but they face challenges in maintaining service provision. Quality of place. Cities have sought to retain quality of place and respond to the decline in the housing market in a number of ways by: Reducing physical decline make creative use of empty shop fronts. Working closely with developers reducing the barriers facing developers and ensure that planned developments go ahead where possible. Addressing the loss of homes improving access to housing services for those who are made homeless. Boosting the third sector enabling them to improve their ability to cope with increased demand for their services. Addressing reputation decline recruiting ambassadors to spread positive news about local areas. Preparing for the upturn. Local authorities are using the crisis as an opportunity in a number of ways by: Retraining the unemployed ensuring that people are kept close to the labour market and are able to take advantage of the opportunities that do exist. Encouraging FDI and tourism through campaigns for tourists and venture capitalists and foreign firms. Continuing investment continuing to invest in improving local infrastructure to prepare cities for the upturn.
Nonetheless, questions remain about the extent to which these initiatives add up to a strategic response to the recession that combines short term initiatives with longer term strategies to invest in a sustainable economy.
In particular, in light of our analysis that skills are a key determinant of city success, there are questions about the extent to which cities are investing in skills linked to economic development, retention of jobs and development of jobs.
Executive Summary
How does this compare to the response of international cities
International cities have a wider range of powers over their local economies and have enacted a wider range of responses. In a number of countries this has given them the capacity to develop larger scale infrastructure projects. In the US this has been aided by stimulus funding, for which a variety of local economic institutions can apply.
Other cities such as Hong Kong have been able to provide an independent stimulus to the economy through the reduction in locally controlled taxes. This is not an option for cities in the UK, and it is unclear why the benefits would be greater at an urban rather than a national level.
International examples show that UK cities would benefit from greater freedoms and flexibilities in relation to funding. However, it is also important to learn lessons from international cities. In the past, where international cities such as Pittsburgh have relied on their local tax income for funding, this has made them vulnerable in periods of economic turbulence as their ability to spend shrinks at the same time as their needs increase, risking the creation of cycles of urban decline.
What should local and national policymakers do next?
National government should: 1. Allow local authorities and sub regional partnerships, such as city regions, to have greater freedom and flexibilities in relation to funding, enabling them to respond to local circumstances. Piloting tax increment financing in the form of accelerated development zones1 should be a priority. This learns from the experience of the United States and incentivises local authorities to boost the local business base. Pilots would need to be assessed rigorously but would enable cities hit hard by the recession to invest in their infrastructure. In addition, Treasury should consider allowing local authorities to balance their books over three years, in line with the spending review settlements.2 2. Move quickly to agree the detailed powers to be devolved to Manchester and Leeds City Region pilots, and extend these pilots to other city regions. Integration of employment and skills investment at a local level through Employment and Skills Boards should be a priority within these city region pilots, given the importance of skills to economic resilience. National industrial, skills and employment
Core Cities & PricewaterhouseCoopers LLP (2008) Unlocking City Growth: Interim Findings on New Funding Mechanisms 2 NLGN (2009) In the Balance: Granting local authorities new financial flexibilities to cope with the downturn
1
Executive Summary
policy should be aligned to enable regions and city regions to integrate policies on the ground. Regional Development Agencies should: 1. Use the opportunity of integrated regional strategies to invest in and link employment and skills policies more effectively. RDAs have the opportunity to work with partners across the public, private and third sector to address the challenges facing particular people and particular areas. 2. Convene partners at a regional and local level to develop a shared strategic response to the recession and recovery that aligns with national policy, learns from best practice and responds to the needs of the region. RDAs have an important role to play in working with national government to align policies as well as ensuring that local strategies are complementary in the short and medium term. City regions should: 1. Work in partnership with other local authorities, universities, FE colleges, JobCentre Plus, the Learning and Skills Council and others to develop a strategic response to the recession. This should involve using existing government powers, such as Multi Area Agreements and Employment and Skills Boards, in order to develop a collective response. 2. Balance short term interventions, such as support for those made redundant, with longer term priorities, such as investment in skills. Where possible, short term actions such as infrastructure investment should provide infrastructure that will benefit the city in the longer term rather than only being a priority because of jobs generated. Priorities should be: a. Invest in skills as this is one of the key determinants of how cities fare in the recession; b. Quick and cost effective actions such as local websites coordinating information on how to cope with redundancy; c. Support entrepreneurship amongst the newly redundant, which has longer term benefits.
Executive Summary
Local authorities should: 1. Follow the Barcelona principles for action in the recession. The principles have been developed by a group of city leaders and help leaders review their strategic response. 2. Take advantage of the new local authority economic assessment role to map the impact of the recession on their local area using the framework below and set out in Section 3. This will enable a review of the extent to which current initiatives respond to short and longer term challenges.
Understanding how the recession is impacting differently on the economy, labour markets, places, leaders and long-term visions should enable cities to identify priorities for action.
1. Introduction Leadership in a crisis
The current global recession is a crucial moment for Britains cities. Over the past 15 years they have received, albeit slowly, greater powers, flexibility and funding. This decentralization has been far from complete, but local authorities are increasingly responsible for the prosperity of their local areas. Their knowledge of local areas, ability to tailor services according to local need and ability to act as place shapers makes them important actors in mitigating against the impact of a global crisis while preparing local areas for an upturn. Regional development agencies, local leaders of businesses, universities, FE colleges, organisations such as JobCentre Plus are also playing an increasingly important role, working in partnership with local authorities, in enabling local people and places to thrive. For this emerging group of local economic leaders, the current crisis represents an important test.
1.1 International principles for economic leadership in a crisis
Internationally, leaders are responding to the crisis in a multitude of different ways. The OECD, in partnership with The Work Foundation and Barcelona, has worked with a group of these local economic leaders, learning lessons from recent and past experiences to develop a general set of principles that can guide leaders in their responses to the recession. These principles are: Barcelona Principles i. ii. iii. iv. v. vi. vii. viii. ix. x. Dont waste the crisis, but respond with leadership and purpose. Make the case for continued public investment and public services and the taxes and other sources of investment required. In the long-term: build local economic strategies which align with long-term drivers and identify future sources of jobs, enterprise, and innovation. In the short-term: focus on retaining productive people, business, incomes, jobs, and investment projects. Build the tools and approaches to attract and retain external investment over the longterm. Build genuine long-term relationships with the private sector, trade unions, and other key partners. Take steps to ensure the sustainability and productivity of public works, infrastructure, and major developments/events. Local leaders should act purposefully to support their citizens in the face of increased hardship. Local economies have benefitted and should continue to benefit from being open and attractive to international populations and capital. Communicate and align with national and other higher tier governments.
10
Introduction Leadership in a crisis
These principles set out a framework within which leaders can consider how they respond and the detailed evidence underpinning these is set out in the paper The Barcelona Principles: Recession Recovery and Reinvestment.
1.2 How can UK city leaders respond to the crisis?
This complementary paper builds on these principles to investigate the impact of the current recession on the UKs cities and local economies. It has three main aims: 1. To identify the impact of the recession on UK cities. 2. To map the ways in which UK cities are responding, showcasing best practice and reviewing what lessons can be learned from international cities responses. 3. To provide realistic policy recommendations for how cities can and should respond to mitigate the impact of recession, prepare for the upturn and to prepare themselves for future downturns. To do this, we have developed a framework to enable cities to develop a holistic view of how the recession is affecting them and how they can respond in the short and longer term. This framework, which draws on The Work Foundations Ideopolis research on cities3, is set out below.
Alexandra Jones et al (2006) Ideopolis Knowledge City Regions: The Work Foundation
11
Introduction Leadership in a crisis
Using this framework, cities can review the impact of the recession and the opportunities for the recovery. This framework enables local areas to develop a holistic view of how the recession is affecting them and how to plan for the recovery. Section 3 sets out more detail about how cities can use this framework.
1.3 This paper
The remainder of this paper draws on analysis of secondary data and case studies of the following cities: Belfast, Birmingham, Bristol, Cardiff, Chelmsford, Derby, Glasgow, Liverpool, Manchester, Oxford, Newcastle and Swindon. It is structured as follows:
Section 2 presents evidence on the impact of the recession and the geography of this impact.
Section 3 presents the variety of ways in which cities have responded to the recession for more detail see the appendix to this report.
Section 4 compares this response to the response of international cities. Section 5 draws policy conclusions in three main areas: to minimise the impact; prepare for the upturn and to enable local governments to respond to future economic crises.
12
2. Evidence of the impact of the recession
The impact of the global crisis on British cities will be widespread and long-term. Understanding the impact of the crisis on cities, how this varies in different areas, and how it compares internationally, will be vital for cities seeking to respond to the crisis. This section seeks to respond to these questions, drawing on the available data and using the framework set out below.
It is important to note that the available data tends to lag behind the actual changes in the economy, with sub-national data released even more slowly, meaning that more work will be needed to revisit these figures in the coming months and years. Yet knowing more now about how the recession is playing out so far is critical if local economic leaders, particularly sub regional partnerships and local authorities, are to effectively plan their responses to the recession.
2.1 How long will the national recession last?
No discussion of the impact of the recession on city economies is possible without reviewing the changing national picture. Predictions about how long the research will last vary, with many arguing that the UK will fare particularly badly compared to other countries. The table below sets out an average of independent forecasts compiled by the Treasury, as well as predictions from the OECD and IMF. At best, it is predicted that the UK will decline by 3.7 per cent in 2009 and increase by 0.4 per cent in 2010. At worst, growth will not resume until 2011 although forecasting remains an inexact science, as the regular downward revisions of the IMF growth forecasts show.
13
Evidence of the impact of the recession
Table 2.1: Forecasts for GDP growth4

GDP growth Average of independent forecasts (Treasury) OECD4 IMF 2009 -3.8 -3.7 -4.1 2010 0.4 -0.2 -0.4
Source: HM Treasury Forecasts for the UK economy: A comparison of independent forecasts, May 2009; OECD Economic Outlook; IMF Economic Outlook 2.2 What is the impact of the national recession on city economies?
2.2.1 Credit, insurance and consumer confidence remain key challenges Particular characteristics of the national economic situation with implications for local economies include: Credit and insurance is still relatively difficult to obtain for firms and consumers. The origins of the recession are linked to the Credit Crunch which followed the collapse of several banks and the withdrawal of credit from late 2007. As a result, firms find it harder to finance future investment, reducing demand in the economy. Existing debt is harder and more expensive to finance and many firms are struggling to gain insurance. This has consequences for the supply chains of many firms who find themselves unable to buy new stock to sell and in some cases leading to collapse. Consumers can also no longer borrow to finance existing debt and mortgages have become more difficult to obtain, one factor in the decline of the housing market. Access to finance and insurance for local firms, and the ability to service debts for individuals, create significant challenges for local areas seeing a rise in unemployment and people struggling to pay the bills. Interest rates are very low, affecting the housing market, demand and savings. At the time of writing, the base rate is at 0.5, the lowest since the 1600s.This will have impacts on local firms. The hope is that low interest rates increase demand because of low incentives to save, as well as reducing the costs of borrowing and servicing existing debts such as mortgages (although many still face problems in obtaining credit and banks have not lowered many interest rates in line with the base rate). Lower interest rates will have reduced incomes for those who save, consumers reliant on investment income, such as pensioners, and organisations such as charities and local authorities. Many of these individuals and institutions will create new demand for local services.
OECD Economic Outlook (March 2009) Interim Report: United Kingdom, Paris: OECD
14
Consumer and business confidence is still low, but with signs of bottoming out. Local areas need consumers and businesses to feel confident about spending their money and there are signs that this is changing. The Nationwide Consumer Confidence Index rose in April 2009, representing the belief that the worst of the recession was over. Yet only a quarter of respondents felt that the economic situation would improve in the next six months.5 Business confidence has also been in steep decline, although there are also signs that the rate of decline has slowed. The CBI have reported that there has been a slowing of the pace of decline in confidence among manufacturing firms: 34 per cent of manufacturing firms in their sample predicted output volume to fall in the next quarter; 17 per cent expected increases.6 Yet while the UK economy is performing badly and most indicators are still declining, there are signs that the pace of decline has begun to slow. It is unclear whether this reflects the start of a recovery, or a false start. 2.2.2 Manufacturing and services have both been hit by the recession The past year has seen sharp spikes in the number of redundancies in all sectors but the public sector and agriculture. Changes between March 2008 and March 2009 have included: Manufacturing: declined by 6.7 per cent; Financial and business services7: declined by 2.8 per cent; Distribution, hotels and restaurants: also declined by 2.8 per cent; Transport and communications: declined by 1.2 per cent; Other services: declined by 0.5 per cent; Construction: declined by 0.2 per cent; Mining, energy and water supply: declined by 0.3 per cent; Agriculture, forestry and fishing: grew by 1.6 per cent; Education, health and public administration: grew by 2.1 per cent.8
The public sector has not been hit hard to date but future cuts in public spending mean that it is likely to experience job losses in a number of areas of the sector, including local authorities.
Nationwide Consumer Confidence Index, April 2009. Sample of 1,000 people From a sample of 575 firms. CBI May Industrial Trends Survey, details from: www.cbi.org.uk 7 Note that this is a broad sector (SIC J & K) and so includes more than simply financial services 8 ONS Labour Market Statistics, June 2009
5 6
15
2.3 What is the impact of the recession on people and labour markets?
Falling demand in the economy causes job losses, which in turn lead to further reduction in demand because individuals have less income to spend. This will impact on different groups according to the industries they work in (see 2.2.2 above), their occupations and qualifications and the places in which they live. For city leaders it is vital to understand who is losing their jobs, which sectors are seeing employment declines and the geography of these declines. 2.3.1 Men and young people are particularly likely to lose their jobs The impact of the recession will be felt by different people depending on their personal characteristics, occupation, industry of employment and the place they live. This will also be a lagging indicator: recruitment and redundancy are expensive, meaning that firms will only make people redundant if necessary, and equally will only recruit when there is a genuine business case. Instead, most firms will seek to work their existing employees harder until the recovery is well underway. Characteristics of job losses to date are: Both the claimant count and unemployment rate are increasing, and have been doing so since the start of 2008. The most up to date data shows that the upwards trend in the claimant count has been if anything sharper, at least for men. Latest data also suggests that unemployment is increasing less rapidly, although still increasing, but it is not clear if this is a genuine slow down in redundancies or a short term trend. Increases in unemployment have been greater for males than females. Since the start of 2008 the claimant count and unemployment rate have increased much more for males than for females (although the rate of increase has slowed for both). The conventional explanation for this is that unemployment has increased by a greater extent for men because they were more likely to be employed in the industries which have experienced job losses9, such as manufacturing. Women are more likely to be employed in counter-cyclical industries such as the public sector, education and healthcare, although these tend to offer lower wages.
Heather Boshey (2009) Gender and the Recession, Centre for American Progress Infographic, 8.5.2009
9
16
Figure 2.1: Male and female unemployment rate
Source: Claimant Count Claimant count by sex, Nomis. Unemployment Unemployment rate, Annual Population Survey, Nomis
Unemployment increases have been larger for younger people. The greatest increase in the unemployment rate, as shown in Figure 2.2 below, was for the population aged 18-24. Males in this category bore the brunt of job losses. This will have consequences in the future; those who experience early periods of unemployment are more likely to be unemployed later in life and likely to earn less in the future.10 In the short term, existing vacancies are more likely to be taken by those with greater experience and proven job histories.
Different regions have seen different increases in young unemployment. Northern Ireland, the South West and South East have seen the largest increases in the number of unemployed youths (although this may be from a small base). By contrast the low figures for London may be due to a large youth unemployment problem initially and a relatively robust labour market.
Paul Gregg and Emma Tominey (2005) The Wage Scar from male youth unemployment, Labour Economics, 12 (14), 487-509
10
17
There are few clear ethnic differences in increases in unemployment. Increases have been largest for those of mixed ethnicity, followed by whites. If anything, ethnic minorities have experienced lower rates of unemployment increases (although most ethnic minorities still have higher unemployment rates than whites). The group whose unemployment has increased the least is the Chinese and other group.
Figure 2.2: Increase in unemployment rate by age (Jan/Mar 2007 vs Jan/Mar 2009)
Source: Labour Force Survey 2.4 Local governance/ leadership
Local leaders are being affected in particular by reductions in income at the same time as increased demand for services, making it difficult to respond to individual need and to invest in the infrastructure required to generate jobs now and competitiveness in the future. Particular effects of the crisis are: Lower council tax: Local authorities in the UK are likely to offer lower council tax rises over the next year, with an LGA survey suggesting there will be an average increase of 3 per cent compared to 2008/2009.11 This compares to an average increase of 3.9 per cent in the period between 2007/8 and 2008/9.
LGA http://www.lga.gov.uk/lga/core/page.do?pageId=1645241. Tax figures are based on a sample of 300 local authorities, income figures on 52 responses
11
18
Lower income: At the same time as demand for council services is increasing, local authority income for councils is predicted to fall by 2.5 billion because:
Public deficit leading to constraints on all public spending; Loss of fees from planning receipts; Reduced income from section 106; Increased concessionary travel; Higher utilities costs; Pension increases; Reduction in prices for recyclable materials.
The reduction in interest rates (and problems due to Icelandic banks) have exacerbated this problem. This will lead to sizeable reductions in income. Newcastle City Council for example expect reductions in capital receipt income of approximately 20m over the next three years. Budget deficits: As a result of the income gaps above, many local authorities are expecting to make a loss. Of our case studies, Essex County Council estimate a budget gap of around 5m for 2009/10. Belfast forecast a fall in external revenue of around 2.6m for the financial years. Swindon estimate cost pressures at around 2 million. Need to reduce staff numbers: Local government is also likely to reduce its staff numbers, compounding the poor state of many local labour markets. A LGA survey indicates the scale of cuts which have been made: 70 per cent of councils have made cuts, many of these jobs being middle and senior management.12 The cuts were highest in London (92 per cent of authorities made cuts) and the West Midlands (72 per cent).
2.5 Quality of place
The recession is also having an impact on local infrastructure, property and social issues. Particular issues are: There is initial evidence that labour migration is declining. Migration data is notoriously poor, but we can see a clear reduction in the number of National Insurance number allocations (NINO) for foreign nationals in the period.13 There was a steep increase in NINO registrations in the period to 2007, followed by a decline in the year 2008 for all cities, with migrants likely to be less willing to take the risk of moving as well as finding it harder to find employment. The pace
Based on a sample of 165 Authorities in March 2009. LGA Survey of Local Authority Staff Reductions. http://www.lga.gov.uk/lga/core/page.do?pageId=1670152 13 While imperfect, these are one of the best measures of labour migration
12
19
of decline in some cities, notably Newcastle and London, was lower than might be expected, however, and despite this decline the number of new registrations was still high. This is likely to reflect the fact that the recession began fairly recently and also that, if economic conditions are still worse in the country of origin, a move to a recessionary UK may still be a good option. Figure 2.3: Migration
Source: Department for Work and Pensions, National Insurance Number Allocations to Adult Overseas Nationals entering the UK
The housing market has collapsed: The last ten years saw substantial growth in house prices driven by the ready availability of credit, high employment, low interest rates, shortage of housing supply in many areas, and a perception that house prices would continue to rise. Since the end of 2007, prices have fallen significantly, with the decline in sales universal in the cities in our sample fuelled by fewer sellers, less easy credit and labour market uncertainty. As demand
20
has fallen, new construction orders have declined in all regions. Where new construction is taking place, it is increasingly funded by the public rather than the private sector. This puts the construction sector in a position of significant disadvantage without local authorities having greater access to funding.
2.6 What are the characteristics of areas that do better or worse in a recession?
In a companion paper, we analyse the characteristics of local areas and the extent to which areas with different industrial structures and population characteristics have seen increases in unemployment both the claimant count and the unemployment rate14. There are a number of key findings. 1. Skills are the key determinant of how well local areas have performed in the recession: the lower the skills profile of an area, the worse it has been affected by the recession. There is a clear relationship between low skills in a Local Authority and Travel to Work Area and increases in unemployment, whether this is measured by claimant count or the unemployment rate. Areas with a high proportion of population who are highly skilled (those with a degree) have seen lower increases in unemployment. By contrast, places with high proportions of low skilled people (those with no formal qualifications) have witnessed higher increases in unemployment. This is true for both cities and local authorities; although Swindons high increase in unemployment despite a reasonably strong skills profile is the only exception to this trend. There are a number of reasons why skills are important. One simple explanation is that the low-skilled may be more likely to be employed in industries which have declined most rapidly, such as certain aspects of the retail and hospitality sector or manufacturing. It is likely that the explanation goes deeper than this, however. Firms may be reluctant to lose valuable skilled workers, who may be more expensive to recruit and retrain for specialist jobs in the long term. And the low skilled may lose their jobs through a process of bumping down in the labour market, as those who are better qualified move into jobs for which they would have been overqualified.
The claimant count may undercount the number of unemployed, but is a much more accurate figure at local areas
14
21
Moreover, long-term evidence from the US shows that cities with higher concentrations of the skilled (normally, as here, qualifications are used as a proxy) make cities more robust to economic change15 the skilled find it easier to use new technology and to switch from declining sectors into new ones. Figure 2.4: Cities (travel to work areas) qualifications and increases in the number of claimants 1) NVQ4 +
Increase in the claimant count, April 2007-April 2009
2) No Qualifications
0.035 0.03 0.025 0.02 0.015 0.01 0.005 0 0 0.1 0.1 0.3 0.4 0.5
0.035 0.03 0.025 0.02 0.015 0.01 0.005 0 0 0.05 0.1 0.15 0.2 0.25
% of working age population with no qualifications
% of working age population qualified to degree level or above
Source: Qualifications Annual Population Survey (2007), Claimant Count from Nomis
This finding also applies with more up to date measures using the claimant count and the unemployment rate, and is consistent with higher increases in unemployment for the low skilled.
15
Edward L. Glaeser and Albert Saiz (2003) The Rise of the Skilled City, HIER Discussion Paper 2025
22
Figure 2.5: Local Authorities qualifications and increases in the number of claimants 1) NVQ4 +
2) No qualifications
4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 10 20 30 40 50 60
4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 5 10 15 20 25
% of working age population qualified to degree level or above
% of working age population without qualifications
Source: Qualifications Annual Population Survey (2007), Claimant Count from Nomis
The relationship between the population with low skills and the claimant count is visible on a map, with a large amount of overlap between increases in the claimant count and the geography of those with no formal qualifications, see Figure 2.6 on the next page. A number of the areas which were previously identified as being of high levels of unemployment also have low skills. For example, in South Wales job losses in manufacturing have been severe, although the population without qualifications is broader, with high rates stretching north through Central Wales. The North East has also seen large increases in the claimant rate, and these losses map closely onto large low-skilled populations. There is also some concurrence between high numbers of low skilled workers and increases in claimants in the area around Glasgow and the Northern belt which stretches between Liverpool and Hull. While this relationship is important, it is not a perfect one other factors will intervene in local economies. One such example is Swindon, where the claimant rate has increased to a large extent but which has relatively fewer of the low skilled population. Redundancies in Swindon have been in the car sector and distribution for Woolworths.
23
Figure 2.6: Relationship between qualifications and claimant count 1) Proportion of working age population with no qualifications
% of working age population with no qualifications, 2007 23 to 29.9 16 to 23 9 to 16 2 to 9
2) Change in rate of Job Seekers Allowance claimants
Change in claimant rate, May 2007-May 2009 3 to 4 2 to 3 1.1 to 2 0.2 to 1.1
Source: Qualifications: Nomis (2007) Annual Population Survey Residence Based
Source: Claimants: Nomis (2007-2009) Claimant count with rates and proportions
2. Areas with high levels of employment in manufacturing have lost jobs. There is a relationship between increases in the claimant count and manufacturing employment, which is consistent with the general decline in the sector. Results for construction are less clear, however, as shown in Figure 2.7 below. This is consistent with international evidence which shows similar results for US cities, as those which tend to be reliant on manufacturing are performing worse in this recession.16
Ed Glaeser (2009) How some places fare better in hard times, New York Times Economix Blog, 24.3.2009
16
24
Figure 2.7: Employment by sector and increase in the claimant count17 1) Manufacturing
2) Construction
4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 5 10 15 20 25 30 35 40
4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 2 4 6 8 10 12 14 16 18
Employment in manufacturing 2007
Employment in construction 2007
Source: Annual Business Inquiry, Claimant Count from Nomis
3. Some areas dependent on financial services have lost jobs but only outside London and the South East. Areas with employment in financial services had no greater or lesser relationship with unemployment. But the picture is slightly more complicated there is evidence that local authorities with high levels of employment in SIC 65 (Financial Intermediation, except insurance and pension funding) and SIC 67 (activities auxiliary to Financial Intermediation) have had higher rises in the claimant count. This might be because employment losses were in retail banking and activities additional to the main activities of the financial organisation. High profile employment in the headquarters of the firms is likely to have been retained, at least to some degree, while staff laid off in London may have been more successful in finding reemployment.
Only the relationships between employment in manufacturing is statistically significant, = 0.4379, sig = 0.000
17
25
Figure 2.8: Employment in financial services and increase in the claimant count 1) Within the greater South East
2) Outside the greater South East

3.0 2.5 2.0 1.5 1.0 0.5 0 0 2 4 6 8 10 12 14 16 18
4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 2 4 6 8 10 12 14
Employment in financial services (SIC J), 2007
Employment in financial services (SIC J), 2007
Source: Annual Business Inquiry, Claimant Count from Nomis
26
3. UK local responses to the recession
Drawing on detailed case studies of twelve UK cities18, this section investigates the ways in which UK cities have responded to the recession. It focuses on the direct and useful policy measures which are being undertaken now by local authorities, local partnerships and other local and sub regional institutions both to mitigate the impact of the recession and to prepare for the upturn. These responses are mapped against the framework below, with each section setting out a table enabling local authorities to consider different initiatives relevant to, for example, the economy or to people and labour markets.
Whilst recognising that the impact and value for money over the long term is currently unclear, and that the lines between new policies for the recession and older policies which are being reconfigured is somewhat blurred, this section also questions whether the responses that UK cities are undertaking now responds to our findings in the previous section, and particularly the importance of skills.
3.1 How can UK local institutions influence their local economies? The twelve UK case study cities are: Belfast, Birmingham, Bristol, Cardiff, Chelmsford, Derby, Glasgow, Liverpool, Manchester, Newcastle, Oxford, Swindon
18
3.1.1 The role of local authorities Despite widespread recognition of the increasingly important role cities are taking in driving regional and national economies and a push towards devolution, the UK remains one of the most centralised state systems in Europe. The Communities and Local Government Select Committee identifies three ways in which the relationship between central and local government in England deviates from the European norm: the level of constitutional protection, the level of
27
UK local responses to the recession
financial autonomy, and the level of central government intervention19, with all three serving to tilt the balance of power towards the centre. Financial autonomy is a particularly significant issue for UK local authorities, which on average rely on central government for 75 per cent of their revenue.20 That less of the money that UK councils spend is related to the local tax base is arguably beneficial in a recession in the short term: cities suffering the largest declines in their local economy and hence local tax base will not experience declines of the same order in their finances. Over the longer term, however, the aspirations of cities which experience the recession relatively lightly and are well-positioned to raise revenue locally may be thwarted by the anticipated contractions in public spending. In addition to limited local revenue raising powers, UK local authorities tend to have less autonomy and flexibility over how they spend their funds. They are empowered to take any steps which they consider are likely to promote the economic, social and environmental wellbeing of the area or inhabitants within their boundaries under the Local Government Act 2000, but the more prescribed nature of local government spending in the form of ring-fenced specific grants and the requirement under Section 32 of the Local Government Finance Act 1992 to balance income and expenditure for each separate year inevitably places limitations on the ability of UK local authorities to respond proactively and quickly to the impacts of the recession. However, despite comparatively little reliance on local taxes and less autonomy over spending, UK local authorities tend to be responsible for a relatively large proportion of spending in local areas.21 This makes it particularly important to establish the ways in which local authorities can maximise their impact. Table 3.1 below sets out a brief overview of some of the areas over which local councils have influence.
Communities and Local Government Select Committee (2009) The Balance of Power: Central and Local Government 20 Communities and Local Government Select Committee (2009) The Balance of Power: Central and Local Government 21 Roger Gough (2009) With a Little Help From Our Friends: International Lesson for English Local Government, London: Localis
19
28
Table 3.1: Overview of local government areas of influence22 Local government areas of influence Education and Social Services Education Childrens services Social services Economic development & planning Planning Strategic planning Transport planning Passenger transport Highways Public Services Waste collection, disposal and recycling Environmental health Environmental protection Fire 3.1.2 Working at the sub regional level It is widely recognised that local authority boundaries rarely match the level of the functional economic area, the level at which people really live and work. As a direct result, local authorities are increasingly working together under sub-regional partnerships to address economic development issues at the most appropriate level. The growing movement toward sub-regional partnership working has been bolstered by the introduction of Multi Area Agreements. Multi Area Agreements or MAAs involve groups of local authorities coming together on a voluntary basis to agree collective priorities, targets and indicators for economic development in the sub-region over a three year period with central government, regional bodies and other key stakeholders. More recently, the 2009 Budget gave the green light to city-region pilots in Greater Manchester and Leeds City Region, with reports that more city region pilots may be granted in the near future.
This can only be an overview: differences in national and regional government, and the different tiers of local authority make it difficult to generalise about the powers cities possess
22
Housing Social housing Local planning
Culture and leisure Cultural facilities Sporting facilities Parks and open space Libraries
29
3.1.3 Regional development agencies Regional development agencies are another key body influencing economic development at a local level, and hence the response to the recession. RDAs are charged with providing business support, sector specific support and investing in physical infrastructure. They play a vital role in convening local partnerships. With the introduction of the Integrated Regional Strategy combining the Regional Spatial Strategy and Regional Economic Strategy, RDAs will play a critical role in the coming months in supporting local areas to mitigate the impacts of the recession and position themselves for the recovery. 3.1.4 The role of other local institutions Whilst individual and sub-regional groups of local authorities have a vital role to play in supporting residents and businesses through the recession and positioning for the upturn, they are by no means the only local bodies which exert influence in local areas and sub regions. Local business groups, higher and further education institutions, police and health services skills bodies and local agencies such as Business Link and JobCentre Plus and that deliver national programmes all have place-shaping roles. As such, local authorities work with other partners locally to develop appropriate interventions and responses to the recession. Particular roles of different partners include: Businesses and local business groups: employment of local residents, trade and procurement of goods and services, business to business support and networking, hosting of business events. Universities and further education colleges: research and creation of new intellectual property, development of high level skills amongst students and graduates, employment of teaching, research and support staff, procurement of goods and services, local business links (business support, student and graduate placements, spinout companies, joint research and innovation), investment in physical infrastructure and the public realm, provision of business space, links to other national and international higher education institutions. Third sector and social enterprise: provision of micro credit via credit unions, working with deprived groups, social cohesion.
30
JobCentre Plus & Learning and Skills Council: job opportunity listing, job search support, training information and advice, administration of benefits.
Health services: employment of healthcare professionals and support staff, provision of healthcare treatments, preventative health interventions, procurement of goods and services.
Police service: crime prevention and reduction, targeted early interventions, community liaison.
3.2 How are local and sub regional institutions responding to support city economies?
Economic development powers for UK cities are principally held by local authorities and Regional Development Agencies, although urban development companies also have powers in some cities (for example, Sheffield). Local authorities have a range of specific economic development powers, including powers to promote economic, social and environmental wellbeing within their boundaries under the Local Government Act 2000. Other functions such as infrastructure investment, social housing provision, local business interactions and support, city centre management all have direct economic development implications and are key for developing a successful economy in the long term. Table 3.2 on the next page summarises some of the ways in which local authorities have responded to the recession. 3.2.1 Credit and financial support The drying up of credit has been one of the hallmarks of the current economic crisis, and local authorities have adopted a number of strategies to ensure that local firms do not suffer from the lack of credit available in the economy. Measures include: Speeding up the payment of council invoices from small or local firms to help ease cashflow issues. In Oxfordshire, Cherwell District Council now pays all invoices within 14 days, whilst Essex County Council is modifying payment systems to speed up payment processes and Newcastle City Council is investigating the feasibility and cost effectiveness of reducing the current 14-28 day period for processing invoices from small businesses.
31
Table 3.2: City economies recessionary impact and local response

Area of impact Lack of Credit in the Economy UK local response Work as lender to local firms Engage with local banks Ensure firms are paid promptly Make payments more flexible Falling Demand Provide information about local firms to increase local demand Provide information on procurement opportunities to the council Support retail Example The Bank of Essex Swindon is in dialogue with local banks to ensure firms receive credit Cherwell District Council has a 14 day payment guarantee Essex: Reduce requirements for procurement eligibility Derbyshire and Nottinghamshire Chamber of Commerce Swindon: Doing business with Swindon Business event Derby: free Shopper Hopper Bus helping take shoppers through city centre Essex: reassessing insurance and auditing necessities for public procurement Bristol/SWRDA: Downturn readiness reviews for manufacturers Derbyshire: Reducing rent increases Belfast: Reducing service charges Hillingdon: council tax to be frozen for two years Newcastle: target of 1 million take up of small business rate relief over the next two years Liverpool: University business support gives info on support for firms in recession Essex: Sector specific events to highlight sources of help Swindon Action Force offers central contact number for information for local firms Bristol: Growth opportunities in the recession event Newcastle: Additional 21 million in capital investment in infrastructure, funded by borrowing
Open up public procurement
Targeted support for hard-hit sectors Reduce business costs Reduce rent increases Reduce service charges Reduce council taxes Information, support and advice for businesses Target for Small Business Rate Relief take-up Publicise business support
Ensure awareness of support services Provide single point of contact for local firms Raise awareness of opportunities Local stimulus package Increases spending to provide jobs
32
Working with local banks to ensure that credit continues to flow to local firms. Swindon Borough Council has engaged with and lobbied Lending Managers at local banks in an attempt to persuade them that local businesses remain creditworthy.
Offering direct financial support to firms in the form of loans for new and existing businesses.
Glasgow: Business Investment Fund extension As part of the West of Scotland Loan Fund, the Glasgow Business Loan Fund offers small businesses access gap funding of up to 30,000 for new start businesses and 50,000 for existing businesses, with a fast-track decision process for applications of up to 15,000. In November 2008 Glasgow City Council announced that it intended to expand the scheme, offering repayment holidays and flexible interest rates where appropriate, and potentially taking equity stakes in companies in return for funding.
Taking equity stakes in local firms: Cardiff Council, which has budgeted an additional 750,000 of support for SMEs, is considering taking equity stakes in local firms via a Cardiff Capital Fund.
Cardiff: Cardiff Capital Fund for SMEs The Cardiff Council Budget for FY 2009/10 includes additional support of 750,000 toward existing packages of support for SMEs looking to raise funds for start-up or capital investment. Cardiff Council intend to use 650,000 of this 750,000 for the creation of a Capital Cardiff Fund that offers support including loans, grants and, most significantly, equity stakes to start up businesses and existing companies that need assistance to undertake investment. Equity investment does not increase the debt burden of a business and hence can give businesses greater flexibility. Support will be targeted at businesses across sectors that are undertaking innovation, those seeking to improve competitiveness and businesses interested in investing in environmental improvements to commercial premises. Recognising that taking equity stakes in local businesses would bring increased risk and that robust due diligence is required, Cardiff Council is seeking to adopt a partnership based strategy. In April 2009, discussions were ongoing with Xenos which operates a Business Angel network for Finance Wales, UK Steel and Media Wales.
33
Direct provision of credit to local businesses via a local bank. Essex County Council has set up one of the most imaginative policies: a Bank of Essex, a new municipal bank set up to offer funding to Essex-based SMEs.
Chelmsford (Essex): Banking on Essex In partnership with the Santander banking group, Essex County Council has set up the first council-run bank since the Birmingham Municipal Bank closed down in 1976.23 Banking on Essex is a special delivery vehicle which will act as an intermediary and release 50m of European Investment Bank (EIB) funding (via loans of up to 100,000) for small and mediumsized businesses based in Essex which have been trading for at least a year.24
3.2.2 Increasing demand: Procurement and local trade A second important problem has been reductions in demand in the economy overall. Attempts to deal with this include: Mechanisms to make firms aware of the availability of local suppliers and encourage firms to buy local. For example, Belfast staged a Local Sourcing Initiative where the council and Chamber of Commerce ran a meet the buyer event to help local suppliers meet large buyers from the public and private sectors, whilst Swindon ran an event called Do Business with Swindon Business focusing on how to get council contracts and how to trade with local firms. Local procurement of council goods and services. Oxfordshire County Council supports Keep Trade Local campaign of the Oxfordshire Federation of Small Business and buys 52 per cent of its services from local SMEs, whilst Oxford City Council procures 30 per cent of its annual spend on good and services locally and intends to increase this percentage over time. However it is important to be cautious about these issues of local procurement. Proximity can facilitate information sharing and the development of fruitful relationships between organisations. However in the same way that protectionist efforts designed to support national industry would eventually be very damaging if undertaken by all nations, it would also be damaging if all local authorities and firms only bought goods and services locally. The
http://www.telegraph.co.uk/finance/financetopics/recession/5212048/Essex-County-Council-sets-upbank-to-help-businesses-in-recession.html 24 http://www.essexcc.gov.uk/vip8/ecc/ECCWebsite/dis/cha.jsp?channelOid=134953
23
34
understandable desire to support local firms must be balanced with the benefits of competition, efficiency and choice. 3.2.3 Provision of information, support and advice Finally, local authorities are playing an important role in providing or signposting businesses towards sources of information, advice and support. Measures include: Website links to sources of information and advice are often highly cost efficient ways of helping firms survive, for instance Swindon Borough Council has launched a well-designed Pulling Together website, a repository for useful information and advice for businesses as well as residents. The Swindon Action Force offers local companies that are facing possible redundancies support by providing information via a central contact number. Raising awareness amongst local businesses of small business rate relief entitlements. Newcastle City Council, for instance, intends to increase local take up of small business rate relief to a targeted value of 1 million over the next two years. Working with partners such as Business Link and local universities to host information and networking events for local businesses. Belfast City Council, for example, has obtained ERDF funding for a series of business workshops on sales and marketing, good customer care, financial planning and obtaining funding, online retail and VAT. In Bristol 76 people attended an event entitled Growth Opportunities in the Recession which was co-hosted by the Bristol Enterprise Network and the University of the West of England in September 2008. Working with partners to provide more direct support to struggling local firms in the form of free business mentoring. Cherwell District Council announced in November 2008 that it would use part of a grant of 160,000 to support the mentoring service for new business start-ups and small companies administered by Oxfordshire Business Enterprises, whilst Manchester City Council and partners are working with large local professional service employers to roll out a Timebank mentoring scheme.
35
Manchester: Timebank business mentoring As part of the Helping Hand campaign, Manchester City Council, the Greater Manchester Chamber of Commerce and a number of professional service companies have come together to launch Timebank, a scheme which allows small and medium sized Manchester organisations to get free business advice from participating professional consultancies and support agencies. The Big Four accountancy firms, as well as large law firms such as Addleshaw Goddard and Halliwells, had pledged staff time worth an estimated 250,000 at the time of the schemes launch, with advisers granting a free two-hour consultation on subjects such as finance, law, employment, pensions, supply chain, process improvement and sales. The scheme, which received a favourable write-up in the Financial Times, will run for an initial three months from May 2009.
3.3 How are local institutions responding to support people and labour markets?
Control over employment and skills policies is shared between the local authority, JobCentre Plus, Learning and Skills Councils and Connexions services although local authorities will deliver some employment provision themselves. Some new national funding for jobs has been provided to respond to the recession. One example is the Future Jobs Fund, announced in the 2009 Budget which gives local councils and partners (such as social enterprises or other third sector organisations) an opportunity to bid for money to provide innovative job creation schemes for 18-24 year olds. 3.3.1 Provision of information, support and advice Local authorities have used a range of methods to provide information, support and advice, including: Signposting residents to appropriate sources of help and information via leaflets or websites. Birmingham City Council has produced and delivered a Coping with the Recession leaflet to all households in the Birmingham area, whilst Manchester City Council and Swindon Borough Council are leading examples of local authorities that have produced useful and well designed websites which offer access to information about available help and support. Providing information about affordable events and activities in their local area, for instance Manchester City Councils easily navigable Helping Hands website includes a section entitled Free Stuff which highlights free activities, events and places to go in Manchester.
36
Table 3.3: People and labour markets recessionary impact and local response
Area of impact Job losses UK local response Minimise the scale of redundancies Create new labour market centres Examples Belfast: lobbied Ford to ensure fair redundancy packages Newcastle: Three resource centres providing early interventions for newly unemployed Chelmsford: Bringing together a number of stakeholders to coordinate support Newcastle: fund of 0.5m on long term youth training/apprenticeship schemes Oxford Brookes: 2,000 to be trained with HEFCE money Newcastle University scheme invites local SMEs to apply for a voucher worth up to 5,000 to use for training or advice from the university in January 2009 Cardiff: extra 62k for coordinated front end support for local training and enterprise centres Cardiff: Adult learners course on coping with the recession Newcastle: 400k for four extra debt advisers Chelmsford: Information provided to encourage uptake Derby Bites Back: Derby Evening Telegraph is printing redundancies daily rather than weekly Cardiff Credit Union business development supported by Cardiff City Council Newcastle: 200k to supplement area based grant
Coordinate redundancy support
Youth unemployment
Apprenticeship schemes
Low skilled unemployment Training opportunities
Retrain the unemployed Training
New coordination of training centres
Low incomes and higher debt
Provide support Debt advice Publicise council tax benefits
Lack of vacancies
Ensure vacancies are publicised more regularly Aid and extend existing credit unions
Ongoing areas of deprivation
Continue to target existing social problems
3.3.2 Provision of information, support and advice Local leadership has an important role in helping to mitigate the impact of job losses, coordinating the responses to a crisis and offer an important focal point for the complex networks of service delivery for unemployed people in the UK. Actions have included:
37
Local leaders have lobbied to minimise the consequences of redundancies, with Belfast City councillors supporting the campaign for a fair redundancy package for staff dismissed with one hours notice from the Visteon manufacturing plant. This was part of a wider package of protest, including a sit-in and union negotiations, which was successful in achieving improved redundancy packages for the workers.
Working with partners to roll out a host of enhanced local unemployment services in places such as Chelmsford and Cardiff.
Chelmsford: Redundancy initiative: Supporting enterprise Chelmsford Borough Council launched a redundancy support scheme in June 2009 in partnership with Chelmsford College, Business Link, Mid Essex Enterprise Agency and Citizens Advice Bureau. Under the Redundancy Initiative: Supporting Enterprise (R.I:S.E) scheme, advisers will provide advice and support to help people identify career options, improve professional skills and network professionally for people interested in starting or buying a business every Tuesday via seminars and advice surgeries.
Cardiff: ReAct redundancy support Cardiff Council, Careers Wales, Jobcentre Plus and the Benefits Agency have come together to offer a holistic redundancy support package named ReAct which provides a redundancy action fund to help people attain skills, overcome obstacles and identify employment opportunities following redundancy. Currently the ReAct team is contactable both day and night to inform companies in Cardiff and the Vale of Glamorgan of the support available.
Increasing emphasis on shifting service provision towards early intervention. The Newcastle Futures Partnership, for instance, has set up three new centres which will provide services designed to address the psychological costs of unemployment as well as more traditional job search support.
38
Newcastle: Early interventions for the newly unemployed Newcastle City Council and partners (including JobCentre Plus, the PCT, Northumbria University and Newcastle College) are working together as the Newcastle Futures Partnership to open three Resource Centres across the city. Set to open by June 2009, these will offer early interventions on employability, skills assessment, mental health and debt advice to those made newly redundant. The Resource Centre will provide: Job search and job hunting technique support (including access to the internet for job searching); Skills assessment, with increased access to higher skills partners such as Newcastle University and Newcastle College; Mental health and wellbeing advice; Debt advice. The customer offer will typically involve an induction session, a number of core modules (which can be opted out of/into) and the provision of job search facilities and advice. Clients will be referred onto the service either at the point at which Newcastle Futures engages with a firm that has announced redundancies, or through the normal JobCentre Plus referral mechanism. Newcastle City Council is underwriting the cost of the centres; with funding being made available from the flexible resources within the councils Area Based Grant. Other partners are redeploying existing services, or increasing capacity.
3.3.3 Retraining and employment advice Local authorities with skills deficits have witnessed the largest increases in unemployment rates. That the low skilled have been disproportionately impacted by the recession makes skills particularly important. Measures undertaken by local partners have included: Retraining for newly or temporarily unemployed workers. In Swindon, the union Unite worked with Swindon College, Filton College, Wiltshire College, City of Bath College and Norton Radstock College to provide a series of retraining courses for Honda workers during the plants four month shutdown.
39
Publicising available vacancies and employment opportunities. To this end, Belfast City Council and the West Belfast Partnership organised an enterprise and employability fair which offered attendees advice on the available employment in the city.
3.3.4 Student and youth unemployment There have been a variety of local efforts to address the problems facing graduates due to enter the labour market in 2009, for instance by including beat the recession pages of information and advice for final year students on graduate careers websites. In addition, local authorities are: Supporting entrepreneurs: Belfast City Council and Queens University Belfast hosted an E Factor Fair which helped students at local higher education institutions develop their CVs and start their own businesses; Equipping graduates for work: Liverpool John Moores University has increased its efforts to equip graduating students with work-related skills. Liverpool: Intensive WoW programme Liverpool John Moores runs a World of Work (WoW) programme that aims to equip students with the skills needed for success in the world of work. WoW is a four stage process, that involves an online virtual interview to assess current skills, training to address skills gaps, the production of personal statements and an employer interview. Participating students are allocated a coach from the WoW Delivery Team to support them through the process. In light of the current economic situation, the Graduate Development Centre at Liverpool John Moores is running an intensive programme of workshops and support during May and June 2009 to fast track final year students through the WoW process to help improve their job prospects. 3.3.5 Support for the low paid Even at a time when employment is scarce, employment alone does not always provide an individual with a reasonable standard of living. Local authorities are therefore taking the following measures:
40
Addressing the ongoing problem of in work poverty by introducing more generous local minimum wages for council employees and encouraging other organisations to do the same. Manchester City Council was the first UK local authority outside London to introduce a minimum wage in November 2008, with Glasgow City Council following suit in April 2009.
Manchester: Manchester minimum wage In November 2008, Manchester City Council became the first local authority outside London to sanction a top-up to the minimum wage. At 6.75 an hour, the Manchester minimum wage is worth 1.01 more than the national minimum wage of 5.74 and is benefitting 850 lower paid council employees. Manchester City Council intends to work closely with other public sector organisations to encourage take up across the city and improve the lives and working conditions of low wage city employees.
Glasgow: Glasgow Living Wage As part of a drive to tackle low pay, the Glasgow Living Wage of 7 an hour came into force for employees of Glasgow City Council on 1 April 2009. Glasgow City Council is strongly encouraging arms length organisations and contractors to follow its lead.
3.3.6 Debt advice and access to credit As unemployment continues to rise, many people are facing higher levels of debt and difficulties in repaying money. Local authorities have an important role to play and are: Providing debt management support and advice for residents. Newcastle City Council has allocated 400,000 of funding for an extra four staff to provide expert debt advice to help people manage their way out of financial crisis and a debt prevention publicity campaign. Bristol City Council is spending 170,000 on enhanced debt advice and benefit take-up campaigns for residents and on the recruitment of a Financial Inclusion Champion to combat loan sharks. Supporting the activities of local credit unions to increase access to credit. For example Bristol City Council has provided 30,000 support for the Bristol Credit Union to enable it to increase the number of members and raise awareness of low-cost loans, whilst Cardiff Council is providing 19,000 to fund a new post of Business Development Worker for Cardiff Credit Union.
41
Essex: Essex Savers Essex County Council is supporting the development of Essexs credit union Essex Savers into a sustainable 2 million business. Essex County Council is to provide start up grants, seconded personnel, collection points, payroll deduction facilities and publicity to increase awareness of the benefits of credit unions and support the expansion of the Essex Savers credit union.
3.3.7 Addressing deprivation While much of the focus during the recession has understandably been on the newly unemployed, pre-existing areas of deprivation still face considerable challenges. Indeed, given the characteristics of the populations of these areas they may be affected more severely in the recession than more prosperous areas. A number of local authorities have recognised the need to continue or expand efforts to address existing areas of deprivation. Measures include: Investment targeted at deprived communities: Of Bristol City Councils 1 million investment to tackle the effects of the recession, 300,000 was given to the Bristol Partnership to tackle the social impacts of recession (such as health, crime, incidence of domestic violence, relationship breakdown and increased homelessness) on deprived communities. Similarly, Newcastle City Council is investing a further 200,000 to supplement the Area Based Grant funded programme of initiatives to tackle multiple deprivation. Providing additional financial help to people who start work in neighbourhoods with the highest unemployment rates in Birmingham. For those who start work in these areas, and continue to qualify for Housing Benefit or council tax benefit, the council will top up payments to the level received while an individual was unemployed, for up to 12 weeks.
3.4 How are local institutions responding at a strategic level?
Local authorities in the UK are the principal urban leaders. As well as working with Regional Development Agencies, local authorities link with local partners through Local Area Agreements, which aim to improve the quality of life in local areas. Managed by Local Strategic Partnerships, these can be funded through existing funding or the Area Based Grant, much of the funding of which is already committed but which is increasingly being committed.25 Multi-area agreements are cross-boundary versions, enabling local authorities to work together to address shared
25
http://www.idea.gov.uk/idk/core/page.do?pageId=6908743
42
problems. Finally, more recent governance arrangements have been provided in the form of City-Region Authorities. Manchester and Leeds received this status in the 2009 budget, with the initial areas of influence being skills, employment, housing and joint investment boards with the RDAs.26 Table 3.4: Local leadership recessionary impact and local response
Area of impact Rapidly changing situation UK local response Monitor the economic situation Conduct own survey of local issues Examples Liverpool: Economy Review Group Swindon: SSEP conducting monthly electronic surveys of business needs in Swindon Glasgow: Economic Advisory Board Swindon: 8.4m in efficiency savings for 2009/2010, however this will include redundancies Derby: City councillors agree to postpone remuneration increases until after the recession Derby: Derby Bites Back Campaign Bristol: Recession action plan
Assemble crisis task force with local business Local government tax-burden Make efficiency savings to keep council tax low Reduce council remunerations
Limited resources
Coordinate response Focus response on the recession
3.4.1 Monitoring the local economy To understand how best to respond to the recession, local leaders must understand the nature of the impact on their locality. To this end, Bristol City Council is one of several local authorities that has started to produce a monthly economic bulletin and more detailed quarterly analysis of economic trends and recession impacts. 3.4.2 Leadership and engagement Local areas are also working to improve the quality of local government responses to the recession, with measures including: Delegating responsibility for assessing the impact of recession and devising ways of alleviating its impact locally to a specific group of individuals. Liverpool City Council, for instance, has established an Economy Review Group which is led by
26
HM Treasury (2009) Budget 2009: Building Britains Future, HMSO: London
43
the City Treasurer and the Executive Director, and charged with evaluating the impact of the recession on the local economy and the ways that the council can alleviate or offset effects locally. Engaging with high level stakeholders via economic advisory groups. Glasgow City Council is taking advice from an Economic Advisory Board made up of five senior figures in Scottish business. Set up in November 2008, the taskforce is intended to support the crafting and implementation of local policies to combat the recession. 3.4.3 Efficiency savings Faced with rising costs and declining revenues, the overwhelming majority of local authorities have sought to: Streamline local government and identify additional efficiency savings. In many cases these have included cutbacks amongst local authority workforces. Postpone pay increases for councillors: In a notable display of civic leadership, local councillors in Derby have also agreed to postpone remuneration increases until after the recession. 3.4.4 Improving business links and quality of governance The recession has highlighted the importance of coordination and strong relationships between local authorities, universities, businesses and other local stakeholders. Examples of measures being undertaken include: Launching a business champions initiative: In partnership with Liverpool Vision and the two Liverpool universities, Liverpool City Council has launched a business champions initiative intended over the longer term to embed a business focussed culture in all city council activities.
44
Liverpool: Business champions initiative In partnership with Liverpool Vision, Liverpool City Council and the two Liverpool universities, Liverpool City Council has launched a business champions initiative for selected senior employees. Business Champions from business-facing council departments came together for the first time in May 2009 to be briefed on current business issues and the role of Liverpool Vision (Liverpools economic development company), explore business needs and discuss opportunities to improve public and private sector relations. The overall aim of the business champions initiative is to embed a business-focused culture in Liverpool City Councils activities and ensure the highest standards of care for local businesses.
Encouraging staff to be entrepreneurial: Birmingham City Council has launched an internal scheme to encourage staff to be more entrepreneurial whilst simultaneously improving council services to the community. Under the scheme, employees will form teams to pitch business ideas to a panel for between 1 and 1,000 of funding for community projects and schemes.
3.5 How are local authorities trying to improve quality of place?
The place making role of local authorities and other local organisations becomes even more important at a time of recession when much planned private investment in urban infrastructure has been mothballed or put on hold. Through their role as social landlords and a wide range of long and short term planning powers, local authorities have an extensive range of options for intervening in local property markets. Local authorities also have significant levels of power over the softer infrastructure of urban areas such as parks and street furniture, and a wide range of creative infrastructure libraries, cultural centres, art galleries and so on which can underpin growth and improvements in quality of life and quality of place.
45
Table 3.5: Quality of place recessionary impact and local response

Area of impact Reduce damage of empty shops UK local response Use creative and community sector to fill holes in the high street Expand public services into vacant premises Examples Oxford: Three empty shop premises used for a 10 day exhibition Swindon: Empty shops used as Police and Community Centre for fire and crime prevention advice, Sure Start Community Safety and Housing. Oxford: Contract for independent housing advice given to Shelter Hillingdon: Efforts to encourage volunteering Swindon: Churches to gather and coordinate response Newcastle: Purchase unsold houses and let at affordable rates Newcastle: negoitating with developers and HCA about Homebuy Direct shared equity Newcastle: Investment in empty tower which was HQ of northern rock Swindon ambassador scheme
Address loss of homes Third sector
Increase services for housing and homelessness Support volunteering Third sector responses
Housing problems
Purchase unsold homes Provide help for first time buyers
Abandoned corporate headquarters Reputational damage
Purchase of iconic building
Recruit local ambassadors
3.5.1 Civic campaigns Many cities have suffered some degree of damage to their reputation as a result of high profile redundancies and other urban problems. Launched and driven forward by the Derby Evening Telegraph, the Derby Bites Back campaign is a leading example of a local initiative designed to increase local business and consumer confidence and so boost the local economy and perceptions of the city.
46
Derby: Derby Bites Back campaign With the endorsement of the Confederation of British Industry and support from a number of public and private sector organisations, the Derby Evening Telegraph launched a campaign on the recession entitled Derby Bites Back for an initial three months toward the end of 2008. As part of the Derby Bites Back initiative, the Evening Telegraph has been:
showcasing local businesses and the products and services they offer (reports suggest that featured businesses have increase their sales by around 20 per cent); working with retailers to offer exclusive promotional vouchers to readers every Saturday; showcasing individual success stories; answering readers questions about the economy, businesses and jobs; supplementing its weekly recruitment section by featuring available employment opportunities on a daily basis daily.
Using 140,000 of Section 106 funding, City Centre Management Derby (an organisation funded by Derby City Council) introduced a free Shopper Hopper bus to the city in February 2009 as part of the Derby Bites Back campaign. The service is designed to attract customers from one end of the city centre to the other and runs every 20 minutes from 9am to 5pm Monday to Saturday and 10am to 4pm on Sunday.
3.5.2 Addressing physical decline One of the most visible manifestations of the recession is the growing number of empty shops in city centres. The collapse of national chains such as Woolworths and Zavvi along with more local retail casualties has led to gaps in most high streets that do little to boost consumer or business confidence. Local authority responses include: Working with partner organisation to commission or instigate creative uses of empty shop fronts. This is in line with calls from Hazel Blears, the former Secretary of State for Communities and Local Government, for innovative uses of empty premises, new provisions including special planning application waivers, standard interim-use leases and the creation of a 3 million fund to help communities find creative ways to reduce the negative impact empty shops have on the high street.27
27
http://www.communities.gov.uk/news/corporate/1201277
Communities and Local Government (2009)
47
Making temporary use of empty retail units for arts events and exhibitions. In Oxford for instance, three empty shop premises played host to a 10 day exhibition entitled construct/deconstruct which featured the work of three up-and-coming artists in May 2009, whilst a similar event was staged in Oxford.
Bristol: Spring Forward event Bristol City Council, Urbis Development and Bedminster Community Chest supported the Spring Forward event staged by illuminate, a creative arts group, in March 2009. The event saw the transformation of the windows of two disused Bristol shop fronts into dynamic picture frames through the use of light and projected images.
Making use of empty shops to disseminate community information. The vacant space left by the former Woolworths store unit on Chelmsford High Street is now used to advertise the shopping facilities and attractions that Chelmsford offers, with a list of shops and attractions and a map of the local area. Similarly an empty shop in Dewsbury was recently converted into a police and community centre which offers advice on fire or crime prevention advice and information on Sure Start, Community Safety Rangers, and housing.
3.5.3 Encouraging tourism The economic downturn appears to have led to a reconfiguration of tourism trends. Activities include: Capitalising on higher levels of domestic tourism in the UK and the opportunities to maintain or increase international visitor number. Newcastle City Council is contributing an additional 40,000 to joint tourism marketing campaign with Gateshead Council and the NewcastleGateshead Initiative that is intended to increase visitor numbers and spending in the local economy. Offering a programme of free cultural events and festivals. Liverpool City Council is aiming to capitalise on the reputation and momentum generated by Capital of Culture 2008 and attract both domestic tourists and those from further afield by hosting a programmes of free cultural events and festivals.
48
Liverpool: Capital of free culture Building on the success of Liverpool Capital of Culture 2008 which generated 800m for the regional economy, Liverpool City Council unveiled a programme of more than 100 free events and festivals in a bid to be the UK capital of free culture in 2009. As part of this, Liverpool City Council is commissioning several major free cultural events including a waterfront festival and a public art parade, and inviting arts organisations to bid to deliver a festival of art, music and film staged over three weekends in the summer on the Liverpool waterfront. The intention is to build on the momentum created during 2008 and maintain Liverpools growing reputation for culture even during the recession. 3.5.4 Housing market interventions Large tracts of housing in urban areas in the United States have been left semi-occupied as a result of the recession and the withdrawal or credit from higher risk borrowers. This has not happened to the same scale in the UK, but there are still problems resulting from stalled housing developments that were planned and started in a much more benign economic climate. Measures being adopted by local authorities include: Buying up unsold houses intended for private sale and letting them at affordable rates, as in Newcastle and Glasgow. This is providing much needed cashflow for property developers and increasing the supply of affordable housing, whilst also ensuring that housing developments are not abandoned half completed. Leading local authorities have adopted a number of strategies to overcome the issues posed by half finished or empty housing developments. Newcastle: Housing market interventions To help shore up the local property market and avoid urban blight, Newcastle City Council has sought to purchase unsold houses previously intended for private sale and let them at affordable rates via its housing arm, Your Homes Newcastle. By providing developers with much needed cashflow, the intention is to ensure that housing developments are completed and the supply of affordable homes increased. Newcastle City Council is discussing the partpurchase of property within housing developments on a case by case basis with developers.
49
Taking advantage of the 2009 Budget to deliver high quality new homes for social rent. This made 100 million available to local authorities for the construction of new, environmentally friendly, homes for social rent, working in partnership with the Homes and Communities Agency.28 In May 2009, Birmingham City Council intended to bid for the whole of the 100 million pot.
Using existing grants and funds more creatively to take a much more activist role as social landlords.
Glasgow: Creative use of social housing funds Glasgow City Council intends to be more creative in the use of its 83 million Housing Association Grant for social housing in order to enhance social housing provision in the city whilst simultaneously supporting the construction sector. The City Council will use Housing Association Grant money to buy land while prices remain low, aid private sector developments, purchase units that developers are unable to sell and complete housing units where development is on hold.
3.5.5 Property market interventions It is not just housing developments that have been affected by falling prices and low demand. A number of major mixed use developments the planned Lumiere towers in Leeds, for instance have also been mothballed or abandoned as a direct result of the recession. Steps being taken by local authorities include: Reducing the number or extent of the barriers currently facing property developers. For instance, Birmingham City Council agreed in June 2008 to allow the developers ACD to stagger a 5m payment towards transport improvements rather than pay the whole sum up front in a bid to keep the flagship 500 million Birmingham Arena Central development on track. Glasgow City Council is also taking a concerted series of actions to help progress planned developments. Preserving iconic buildings. Newcastle City Council has taken the highly unusual step of taking out a substantial loan to purchase the iconic tower that was set to become the new headquarters of the failed bank Northern Rock.
28
http://www.homesandcommunities.co.uk/bidding_for_new_build.htm
Homes and Communities Agency (2009)
50
Newcastle: Investment in an iconic building Newcastle City Council has borrowed around 22 million to purchase the empty tower that was to become the new headquarters of Northern Rock, a purchase that is seen as a sound long-term investment. Environmental services firm Eaga is set to take out a 25-year lease on the building and create 300 new jobs within it, subletting one floor of the tower back to Newcastle City Council for the next five years.
3.6 How are local institutions preparing for the upturn?
Devolution of powers to local authorities, cities and city regions creates new opportunities for local leaders to shape the economy and quality of life in their local area, building on their strategic housing roles and roles in developing future infrastructure needs for local areas. Table 3.6: Preparing for the upturn recessionary impact and local response
Area of impact Stimulate entrepreneurship UK local response Target graduates Examples Belfast: E-Factor Fair aimed at providing University students with advice on setting up own businesses Cardiff: new support with small grants for start ups and sole traders Derby: Invest in Derby with 300,000 spent to encourage relocations Belfast: Conference with senior US technology leaders and venture capitalists Derby: Derby Embassy aimed at attracting government departments Manchester: Sending delegation to MIPIM the global property convention Swindon Ambassador Scheme to spread positive information about Swindon to residents and visitors Cardiff Ambassadors programme with high profile ambassadors Oxford: City and county councils paying for refurbishment of covered market Hammersmith and Fulham: Rapid planning application processing Newcastle: Calls for people to take advantage of economic downturn with taster courses in subject, with discounts and free courses available Newcastle: contributing to additional 40k for marketing
New funding for entrepreneurship Encourage FDI Publicity campaigns
Conferences
Lobby for government relocation Market internationally Address reputation impacts Create local brand ambassadors
Create global brand ambassadors Continue investment in the future Deal with planning applications promptly Free time Continue funding public infrastructure
Shorten time for planning applications Invest in Skills
Low pound
Encourage tourism
51
3.6.1 Encouraging future development As highlighted above, the recession has led to the scrapping or delay of a series of major city centre developments. Yet the experience of Belfast which is today reaping the gains of a long term strategy of high levels of investment in urban infrastructure and developments demonstrates the long-term importance of continuing public and private investment in the urban fabric of a place. Local authority measures to help to ensure future developing include: Reducing the number or extent of the barriers currently facing property developers. Glasgow City Council has committed to exploring a range of measures designed to do this. Glasgow: Reducing barriers to development Glasgow City Council intends to provide as much flexibility in its land disposal policy as possible to give additional confidence to the market and reduce financial pressures on developers in order to allow stalled developments to proceed. The council is willing to consider a range of measures, including staged payments over the period of site development, deferred payments from developers, increased use of base price and overage payment systems and increased use of joint venturing and profit sharing arrangements. As part of these efforts to reduce barriers to development, Glasgow City Council no longer asks developers for RES 3 contributions the payment they have to make to develop a site at the planning stage. By deferring payment of RES 3 money until finance is in place and the project is underway, the intention is to allow more planned developments to go ahead.
Working with partners to rebuild the confidence of developers by taking a leading role in planning and driving forward major civic or infrastructure developments, such as the Library of Birmingham development and the Corridor Manchester scheme.
Birmingham: Library of Birmingham Birmingham City Council unveiled plans for Britains largest public library in April 2009. Set to open in 2013, the 193 million Library of Birmingham in Centenary Square is intended to be the flagship for the regeneration of Birmingham and act as a clear signal of confidence to private sector developers.
52
Manchester: Corridor Manchester Corridor Manchester is the first area in the UK to pilot next generation broadband following a March 2009 launch. Supported by 500,000 from the NWDA and co-ordinated by the Manchester Digital Development Agency (MDDA), the scheme will provide 500 businesses and 1,000 homes in the Oxford Road area of Manchester with super fast broadband via fibre optic cabling.
3.6.2 City marketing and promotion A number of local authorities and local development agencies are marketing their city to national and international audiences to increase awareness of investment opportunities and position their locality for the investment in the upturn. Measures include: Investing in marketing: The Bristol City Council budget for 2009/10 includes an additional 400,000 for national and international marketing of Bristol to encourage more business investment in the city. Attending the 2009 Marche International des Professionels de lImmobilier (MIPIM) property summit in France to promote investment opportunities to international investors Manchester and Derby were amongst the attendees. Birmingham City Council has launched an updated Area Investment Prospectus which sets out key investment opportunities in the city. Birmingham: Area Investment Prospectus Birmingham City Council launched the second Area Investment Prospectus (AIP) in March 2009. The Area Investment Prospectus aims to set out the key strategic development and investment opportunities around the city and outlines the framework intended to continue the transformation of Birmingham, and enhance its place as a leading city and a dynamic regional capital.
Lobbying central government as part of the long term intention to attract relocating government departments. At a Derby Embassy event in Westminster in April 2009 Marketing Derby launched a brochure detailing the large-scale office schemes that are being marketed in the city.
53
Recruiting high profile local ambassadors to advocate for their respective localities. The Swindon Strategic Economic Partnership has recruited a small number of taxi drivers as part of an initial campaign to spread a positive message about the city to residents and visitors, whilst Cardiff has a campaign oriented more towards securing international investment.
Cardiff: Cardiff Ambassadors The Cardiff Ambassadors programme, designed to promote the citys offer to potential investors, was launched by the Cardiff & Co public-private partnership in partnership with Cardiff University, UWIC and the University of Glamorgan in March 2009. High profile ambassadors from the world of business, academia, sport and entertainment are tasked with positioning the city as a destination of choice for potential investors and conference organisers.
3.6.3 Supporting entrepreneurship Much attention has been focussed on supporting existing small and medium sized businesses that are experiencing financial difficulties in the recession to ensure their continued survival. Measures being undertaken by local authorities include: Investing in entrepreneurship and the creation of new businesses, as in Cardiff.
Cardiff: Entrepreneurship fund Up to 100,000 of the 750,000 Cardiff Council has set aside to assist SMEs in the recession is to be used to create a new entrepreneurship or start up fund. Working with local enterprise agencies, grants of between 500 and 5,000 will be available to new entrepreneurs, sole traders and start-up companies, with priority given to businesses that are created as a result of redundancy.
Supporting higher and further education institutions, which play a critical role in promoting entrepreneurship and facilitating new business creation over the longer term. A consortium of higher and further education institutions in and around Derby put in a successful bid for funding from the 25 million HEFCE Economic Challenge Investment Fund that is intended to enable the HE sector to support individuals and businesses affected by the recession.29
29
HEFCE (2009) http://www.hefce.ac.uk/news/hefce/2009/ecif.htm
54
Derby: Enhanced innovation and entrepreneurship support A consortium involving the University of Derby, Derby College, Chesterfield College, West Nottinghamshire College and North Nottinghamshire College succeeded in securing 988,086 from the 25 million HEFCE Economic Challenge Investment Fund. With matched funding, the 2 million strategy to promote entrepreneurship and innovation will involve the extension of the University of Derbys successful Enterprise Scheme, with 20 additional incubator access grants and 12 enterprise bursaries offered to encourage new businesses start-ups. The participating higher and further education institutions will also offer an extra 300 spaces on short-term training courses, along with 500 higher education free taster sessions and 250 fully-funded short courses for the unemployed. The University of Derbys Careers Development Centre will also use a network of outreach facilities to offer skills workshops and one-to-one support from higher education career specialist advisors.
3.6.4 Investing in skills As set out in Section 2, skill levels have proved to be the single most significant determinant of the impact of the recession on a particular place. A city with a more highly skilled population offers businesses more advantages than a city with a less highly skilled population, and more highly skilled individuals have far more options in light of redundancy than less skilled individuals. Measures being undertaken by local authorities include: Investing in young people and apprenticeships. Young people under the age of 25 have been particularly hard hit by the recession in terms of employment opportunities. To address the potential scarring effects of early periods of unemployment that can lead to significant problems in the future30, cities have funded a range of apprenticeship programmes with the dual aim of ensuring employment now and higher skills and improved job prospects in the future. Essex County Council is doubling the number of apprenticeship placements available at the council and partner organisations and working with the private sector to support enterprises wishing to take on an apprentice, whilst Newcastle City Council is creating a fund of 0.5 million to support long term schemes including the promotion of youth training and apprenticeship schemes. Glasgow City Councils apprenticeship work is particularly impressive.
Paul Gregg and Emma Tominey (2005) The Wage Scar from male youth unemployment, Labour Economics, 12 (14), 487-509
30
55
Glasgow: Apprenticeships Glasgow City Councils 10 million Commonwealth Apprenticeship Initiative guarantees an apprenticeship to every qualified 2009 school leaver. The Leader of Glasgow City Council called on local businesses to continue to invest in skills and training for their workforces and to take on apprentices in November 2008, and the council announced that it would provide up to 8,000 towards the cost of every apprenticeship place for organisations committed to creating new apprenticeship opportunities in April 2009. Glasgow City Council will itself take on at least 500 apprentices in 2009. 3.6.5. Investing in innovation Innovation, or the successful exploitation of new ideas, is a major driver of long-term economic success. Radical, revolutionary and incremental innovations that create new products (goods or services), new processes, new marketing techniques and/or new organisational structures have always acted as major sources of economic and employment growth. They are even more important in the current economic climate when innovation is the single most important condition for transforming the crisis into an opportunity. Leeds City Region: Innovation investment The successful Leeds City Region bid for pilot city-region status was positioned around coordinated investment and delivery in the areas of housing, regeneration, adult skills and innovation, with innovation plans being tailored to the short and the longer term. In the shortterm, the Leeds City Region partners aim to support growth sectors through the creation of a 15 million LCR Innovation Fund intended to provide support to up to 1,000 SMEs and 2,000 individuals. Over the longer term, the Leeds City Region Forerunner bid called for 55 million Innovation Fund to support strategic capital investment and the creation of an internationally renowned Leeds City Region Knowledge Capital.
3.7 Lessons for UK cities
UK local authorities are significantly more constrained than their international counterparts in terms of both their ability to raise funds locally and their ability to spend funds flexibly according to local needs. There remains a very strong case for the devolution of further powers and flexibilities to local authorities in the UK.
56
Nonetheless it is clear that despite fiscal and autonomy related constraints, many UK local authorities have taken advantages of the powers they do have, working closely with other local institutions to undertake a wide range of innovative initiatives designed to mitigate the impacts of the recession on people, businesses and infrastructure developments through the recession. The examples highlighted above offer lessons for other UK cities. First and foremost, responses should be tailored to the specific local impact of the recession. Second, look for quick but effective wins. Third, be bold: the most innovative responses to the recession the Bank of Essex and the proposed Capital Cardiff Fund involve a significant degree of risk for the parties involved, but are also likely to yield the best results. Working in partnership, local authorities have also undertaken some longer term initiatives geared towards investment in skills and innovation. Yet given that the skills profile of the local population has proved to be the most important determinant of the impact of the recession on a place, it is not clear that responses are necessarily of the correct scale. For places hit hardest by the recession, there is a clear need for enhanced focus on improving skills levels amongst people with no and low qualifications. In the short term, this should focus on linking skills acquisition to employment opportunities to try to keep people close to the labour market. This will require partnership working with employers and learning lessons from schemes such as Tescos Regeneration Partnership stores. In the medium to longer term, it is vital that investment in low and intermediate skills is linked to opportunities for progression within employment. At the same time, continued investment in higher level skills will be vital to cities ability to respond to the growth of knowledge intensive industries.31
31
Brinkley, I. Knowledge Economy
57
4. International responses to the recession
The response of UK cities has been mirrored by those of international cities. Cities in different countries have different powers and have a different range of options in the current economic situation. They also operate under different economic conditions. This section reviews how international cities have responded to the recession and whether there are any lessons for British cities. It builds on, and is based in part on the analysis and examples from, the accompanying report by Greg Clark, Joe Huxley and Emma Allen.32 More information on the points contained here, with citations, can be found in that report.
4.1 International comparisons
How have the UKs cities been affected when compared to their international counterparts? This chapter offers something of a guide although it is very difficult to collate international statistics. Where possible we have used the comparable city region boundaries as defined in the GLA Metro Area dataset.33 US cities have seen higher increases in unemployment than other cities: The increases in unemployment in the US have been far more rapid than most European cities only Barcelona has been as affected. Data for the French cities lags slightly, but it appears to have increased relatively little; indeed, the data for many of the French cities (up to end of 2008) shows unemployment rates which are actually lower than they were in 2006. The sharpest increases were in Barcelona (proxied by Catalonia) although there were large increases in Los Angeles, and a number of other US cities. Unemployment has increased in all cities, with the largest increases tending to be in the US: If we assume the recession started in 2007, it is possible to show the changes in unemployment rates from that period. There have been steep increases in almost all the cities in the selection, with the largest increases in Miami, Pittsburgh and LA, Bilbao and New York. Although we have data for less time, until the third quarter of 2008 unemployment in the sample of French cities remains lower than it was at the start of 2007.
Greg Clark, Joe Huxley and Emma Allen (2009) The Barcelona Principles; Recession, Recovery and Reinvestment the role of local economic leaders 33 US data from Bureau of Labour Statistics; French from Insee; Barcelona from Idescat; Bilbao from Eustat; UK from Nomis
32
58
International responses to the recession
Figure 4.1: Unemployment in selected international cities
Short term indexed unemployment rates (Jan 2007 = 100)
Figure 4.2: Change in unemployment in selected international cities
Survey based data apart from the UK which is Claimant Count Recession and Recovery: How UK cities can respond and drive the recovery
59
UK cities saw the largest increase in house prices and all international cities (except Pittsburgh) have seen significant declines. UK cities have witnessed greater rises in house prices in the period since 1995, but the declines have been more recent. Figure 4.3 gives data on this, taken from house price indices based on repeated, comparable sales for the UK and the US. This means that the index accounts for transactions where the same house is bought and sold over a period of time. All cities except Pittsburgh have experienced large declines and steep falls. Londons house price increases were the steepest, with large increases in the period from the middle of 2006. Manchesters prices were less precipitous than London or Oxfordshires, rising less quickly but experiencing a decline which has been equally steep. Prices in the US cities peaked earlier than in other countries. Towards the end of 2006 prices peaked in all cities bar Pittsburgh. The falls were least in New York (which already had relatively high prices). Figure 4.3: House Price Index (selected cities)
House Price Indices (Jan 1995=100 unless stated)

450 400 350 300 250 200 150 100 50 0
New York Miami-Miami Beach-Kendall, FL (MSAD) Pittsburgh, PA Los Angeles-Long Beach-Glendale, CA (MSAD) Catalunya (From Q1 2007) London Manchester Metropolitan district New castle upon Tyne Metropolitan district City of Bristol Council Essex Council City of Bristol Council City of Derby Council
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
60
Jan-09
4.2 City economics
4.2.1 Stimulus packages To respond to falling aggregate demand, national governments have offered economic stimulus packages that offer funds for a wide range of projects, including those with local impacts. However stimulus packages have differed in the extent to which they are focused on urban areas, with the US stimulus package of $787 billion being administered by states rather than cities. In the US, city responses have included: Submitting bids for funding from the state allocation of the national stimulus package. For instance Buffalo and Erie County jointly submitted a bid for more than $1.9 billion from the US federal stimulus package, with an emphasis on shovel ready projects such as road, highway, bridge and streetscape construction and the replacement of environmental and wastewater infrastructure. Increasing local taxes to fund a long-term stimulus and investment package. Los Angeles has developed a stimulus through a half cent sales tax that will fund an additional spend of USD 40 billion on traffic relief and transportation upgrades throughout Los Angeles County between 2009 and 2040. The largest proportion (35 per cent) of the funds will be spent on new rail and bus rapid transit capital projects and USD 241 million has been earmarked for 2009-10 alone in this area. 4.2.2 Business support and information International cities are offering a wide range business support initiatives, including: Working with national agencies or other partners to ensure that businesses have access to sufficient credit. Bilbao has worked with the Spanish Official Credit Institute to address shortages of capital for firms in the Basque region, whilst a new USD 15 million loan fund was created in Los Angeles in March 2009 to increase credit opportunities for small businesses. Liaising with national and local banks to persuade them that local businesses are creditworthy, as in Vienna. This is an option for many British cities.
61
Offering financial support to businesses facing immediate difficulties. The Lille Metropolitan Community has created a one stop shop where any small or medium sized enterprise facing financial difficulties can apply directly for assistance. In Los Angeles, a new Office of Small, Local, and Disadvantaged Business has been set up to use federal funds to assist locally-oriented businesses across the city.
Offering municipal property at lower rates. Riga City Council plans to introduce a more flexible system of rents in order to support businesses and rent out more of the municipal properties that are currently vacant.
4.2.3 Support for entrepreneurship Other responses look more to the medium term, for instance: Offering businesses funding for the training of employees. In Hamburg this is up to the value of EUR 3,000 per person. Telephone consulting services for entrepreneurs are also offered. Focussing on business expansion and creation. The Mayor of Pittburgh announced the creation of a new low-interest loan program geared toward small business expansion and creation in April 2009. Focusing on high-tech companies, the Pittsburgh Entrepreneur Fund will provide up to USD 200,000 for growing businesses and young entrepreneurs, helping to create at least 100 new jobs and leverage more than USD 3 million in private investment. Identifying specific sectors in need of immediate support and responding accordingly. Following declining domestic and international visitor numbers in 2008, the Rome Chamber of Commerce has devised a EUR 180 million programme for the economic development of SMEs working in the tourism sector to increase credit opportunities, infrastructure investment and research activities.
4.3 People and labour markets
Many international cities are experiencing even higher rates of unemployment than their UK counterparts, leading to the introduction of a series of labour market support packages. Measures have included: Providing support for the newly unemployed. The Turin Workforce and Training Division is supporting workers employed in hard hit industries by providing EUR 1 million of funding for businesses which undertake to hire newly unemployed people.
62
Supporting young people in the recession through training and employment schemes. Using USD 20.3 million from the federal American Recovery and Reinvestment Act and funds provided by the city of Los Angeles, the Los Angeles Unified School District, Community College District and private sector, the Hire L.A. Youth initiative will help 16,500 at-risk individuals aged between 14 to 24 to obtain employment in the next fiscal year. Similarly, more than half of the additional EUR 10 million that the Vienna Employment Promotion Fund will receive from the city of Vienna has been earmarked for young people.
Reviewing existing policies and finding new ways to support low income families in both the short and longer terms. In Los Angeles rent assistance and welfare services are being offered to around 4,000 low income families as part of a USD 30 million programme. 21 Family Source Centres are being created where people will be able to seek financial assistance, file for critical tax credits, access affordable medical care, and benefit from programs at every level of government via a single form.
Seeking to increase rates of bank account possession amongst low income residents. In Los Angeles the Banking on L.A initiative is a pilot programme to help residents in some low-income areas build money management skills. Participating banks will be required to offer bank accounts with reduced fees to low wage residents.
Encouraging saving. The Mayor of Pittsburgh called on residents to build wealth, not debt by signing up to be a Pittsburgh Saver in February 2009 as part of the national week-long America Saves initiative, aims to increase awareness of the need to save money and commit to a financial goal such as buying a house. Under the scheme, Pittsburgh savers develop a specific savings goal, select an account and either make a deposit in their account each month or make a debt payment.
4.4 Local governance and leadership
International cities often have a wider range of options in leadership than their British counterparts. 4.4.1 Local government finance International cities, which tend to self-finance via locally raised revenue to a much greater degree than their UK counterparts, face a very different financial situation to UK cities. Fiscal positions have deteriorated most for cities which have both a high local tax take and a high level of exposure to financial service firms
63
In Zurich, where 35 per cent of local tax income was derived from financial services in 2007, tax incomes from financial services in 2008 were CHF 400 million lower than anticipated, leading to a significant budget deficit. Miami has also suffered, with a sales tax revenues dropping from 119 USD in 2008/9 to 115m USD in 2009/10 and similar reductions in other taxes. There is an important tension for cities between wanting to spend more money and increasing demand in their local economies and the need to ensure fiscal responsibility. International cities are taking a variety of different approaches to funding squeezes: Levying tax increases to plug budget shortfalls. In Paris, the four local taxes are expected to be increased by 9 per cent, and a new property tax of 3 per cent will be added to those already collected by the city. In the Miami city-region, new revenue will be raised via the installation of traffic light cameras to catch drivers who run red lights. Increasing borrowing. A number of cities are increasing borrowing to fund planned infrastructure projects. Munich, for instance, will borrow money to ensure that its EUR 3 billion investment plans go ahead. Selling off assets. The local government of Budapest voted in November to sell its stake in the Fogaz, a natural gas supplier, to release an expected HUF 60 billion (EUR 233 million) of revenue to match fund development projects being carried out with EU funding. Exploring alternative funding options. The ability of cities to explore alternative methods of funding for infrastructure projects varies significantly according to national, regional and local governance structures. In the United States, Miami is selling municipal bonds in order to build a stadium for the Miami Marlins and Los Angeles is considering privatising the Los Angeles Zoo. Freezing budgets and identifying cost savings. Reductions in income, increased spending demands and the unexpected nature of the current downturn are putting a great deal of strain on city finances. Cities such as Munich have responded by imposing budget freezes and identifying savings in areas such as the renovation of buildings, equipment, administrative and operational costs.
64
4.4.2 Leadership structures Different leadership structures have provided a more focused response to the crisis: Leadership from the front. Cities such as New York that have obvious local leaders have benefited from having a single figurehead present a more unified response to the economic crisis. Where cities are not performing, mayors may also be more accountable than other forms of governance structure. Efficiency savings. Budget constraints have led many cities to consider cutbacks amongst local government workforces. In Los Angeles, city officials have negotiated with employees unions to establish a plan to allow for early retirements and voluntary redundancies that will reduce compulsory layoffs and protect frontline services. Wage freezes for local government employees. In Los Angeles, city workers have been asked to work one unpaid hour per week, contribute 2 per cent more to health and pension benefits, and to defer automatic pay rises. 4.4.3 Monitoring and coordination There have also been important efforts to monitor the impact of the recession and coordination among local development agencies within cities. Paris has undertaken continual monitoring of the situation and improve coordinated responses between local government units.
4.5 Quality of place
The recession has been profoundly damaging to the urban fabric and reputations of many cities. 4.5.1 Investing in infrastructure International cities have continued to invest in infrastructure: Continued investment in physical infrastructure. Recognising the importance of ongoing investment in physical infrastructure, international cities are opting, where possible, to continue their investment plans and exploring funding options. Munich, for instance, plans to increase borrowing in order to go ahead with plans to invest more than EUR 3 billion before 2012 on projects such as the construction of tram station in the urban park Schwabig.
65
Investing in creative infrastructure. A number of international cities have continued to invest in their creative infrastructure, recognising that the logic for funding arts and cultural centres does not disappear in a recession. Miami is supporting the Performing Arts Center Trust by providing USD 700,000 from Miami-Dade County to cover operating expenses and capital-improvement projects, in light of falling revenues.
4.5.2 Civic investment Cities have attempted to mitigate against the impact of poor economic performance on civic pride: Increasing civic pride. Cities have used a number of different methods to raise consumer and business confidence, including civic pride campaigns and initiatives. For example, Pittsburgh launched a context for local residents on the theme of Six Burgh Reasons Why I Love My Neighbourhood as part of efforts to maintain and increase civic pride. Supporting civic facilities. Riga, a city which has witnessed significant declines in tourist numbers, is reducing rental charges by 25 per cent for outdoors cafes situated on land owned by local government as part of an effort to support local businesses and Rigas reputation as a city with a dynamic caf culture
4.6 Long term vision
4.6.1 Entrepreneurship and new growth sectors International cities have continued to invest in economic development programmes to prepare their economies for the upturn. Investing in entrepreneurship. The Pittsburgh Entrepreneur Fund offers a new low interest loan programme with a focus on high-tech companies aiming to produce at least 100 new jobs and establish new firms. Investing in innovation. Milan has devised a programme for innovation which supports innovative research and development projects in ICT, fashion, energy and food sectors that are undertaken by SMEs set up by young entrepreneurs. Financed through a fund of EUR 6 million, the programme is a partnership between the Chamber of Commerce, city universities, the National Research Council and Assolombarda (Province of Milan Firms Association).
66
Promotion of new sectors. A number of cities are investing in and promoting new or emerging sectors as a means of driving recovery and long term economic success. Cities such as New York regard environmental sectors as an area with potential for strong future growth and as a sector in which market failure justifies public investment, and are targeting resources accordingly.
There are reasons to be cautious about any approach that involves sector prioritisation. In the field of environmental technologies, there is undoubtedly room for further employment in jobs such as retro-fitting buildings and local recycling plants and employment in these sectors is likely to be geographically spread. But much of the knowledge-intensive employment in science and technology based sectors is likely to cluster economically in certain areas often the areas which already have a nascent employment in these areas, or those with public sector anchors such as universities with a research base in environmental technology. These jobs are unlikely to be widely dispersed, and many cities are trying to attract them. Cities need to consider carefully their existing strengths and the genuine likelihood of gaining employment in these industries before investing significant funds. 4.6.2 Changes in exchange rates In common with the UK, other cities have been taking advantage of changing exchange rates. Budapest has worked to encourage FDI with some success including the ALSTOM unit which will be established, gaining 160 jobs. Development agencies have been working to ensure that future events are used to maximize benefits. In Auckland a business opportunities guide has been published aimed at providing local business information to help gain from the World Cup.
67
5. Conclusions and policy recommendations
British cities have launched a range of responses to the recession. These responses have been useful in general and sometimes highly innovative. They have ranged in scale from large programmes in the labour market to smaller initiatives in public art. And these initiatives compare favourably to those launched by their international counterparts. However, the response from some places has been lacklustre or incomplete. This makes the examples presented here of some importance. Many of these are policies or ideas which can be enacted at little cost (and with no requirement for legislation). At the very least, cities should ensure that their response to the recession considers the relevance of these examples although remaining cautious about any local protectionism.
5.1 The Barcelona principles for response
The Barcelona principles for action offer a general set of principles for how cities internationally should respond to the recession: i. ii. Dont waste the crisis, but respond with leadership and purpose. Make the case for continued public investment and public services and the taxes and other sources of investment required. iii. In the long-term: build local economic strategies which align with long-term drivers and identify future sources of jobs, enterprise and innovation. iv. In the short-term: focus on retaining productive people, business , incomes, jobs and investment projects. v. Build the tools and approaches to attract and retain external investment over the longterm. vi. Building genuine long-term relationships with the private sector, trade unions and other key partners. vii. Take steps to ensure the sustainability and productivity of public works, infrastructure and major developments/events. viii. Local leaders should act purposefully to support their citizens in the face of increased hardship. ix. Local economies have benefitted and should continue to benefit from being open and attractive to international populations and capital. These should frame the responses taken by city leaders.
68
Conclusions and policy recommendations
5.2 What should British cities do now to mitigate against the impact of the recession?
The effects of the global crisis have been felt at a local level, with local leaders at the forefront of the response to the recession. Yet they face a challenging time: as their incomes decline, demand for their services is increasing. Contrary to early expectations, the recession has not affected London and the South East the most. The recession has reflected older patterns of economic decline: the greatest job losses have been in ex-industrial areas such as the West Midlands. One of the key reasons for this is the skill levels of the workforce. Cities with highly skilled populations have experienced the smallest increases in unemployment, those with low skill levels have experienced the largest increases. While there have been higher job losses in some cities which have concentrations of employment in financial services, it has tended to be those located outside the South East. This is because job losses have often been higher in retail banking and support services, which tend to be located outside the capital. UK cities have been the engines of the UK economy in the last ten years and will be vital to the recovery. Based on our twelve UK case studies, many cities are taking innovative action to mitigate the effects of rising unemployment and position cities to drive the recovery, even where funding and powers have been limited. It is vital that cities learn from each others responses. Nonetheless, questions remain about the extent to which these initiatives add up to a strategic response to the recession that combines short term initiatives with longer term strategies to invest in a sustainable economy. In particular, in light of our analysis that skills are a key determinant of city success, there are questions about the extent to which cities are investing in skills linked to economic development, retention of jobs and development of jobs. How does this compare to the response of international cities International cities have a wider range of powers over their local economies and have included a wider range of responses. In a number of countries this has given them the capacity to develop larger scale infrastructure projects. In the US this has been aided by stimulus funding, for which a variety of local economic institutions can apply.
69
Other cities such as Hong Kong have been able to provide an independent stimulus to the economy through the reduction in locally controlled taxes. This is not an option for cities in the UK, and it is unclear why the benefits would be greater at an urban rather than a national level. International examples show that UK cities would benefit from greater freedoms and flexibilities in relation to funding. However it is also important to learn lessons from international cities. In the past, international cities such as Pittsburgh have found that their reliance on local tax income can exacerbate economic problems, as their ability to spend shrinks at the same time as their needs increase, risking the creation of cycles of urban decline. What should local and national policymakers in the UK do next?
National government should:
1. Allow local authorities and sub regional partnerships, such as city regions, to have greater freedom and flexibilities in relation to funding, enabling them to respond to local circumstances. Piloting Increment Financing in the form of Accelerated Development Zones34 should be a priority. This learns from the experience of the United States and incentivises local authorities to boost the local business base. Pilots would need to be assessed rigorously but would enable cities hit hard by the recession to invest in their infrastructure. In addition, Treasury should consider allowing local authorities to balance their books over three years, in line with the Spending Review settlements.35 2. Move quickly to agree the detailed powers to be devolved to Manchester and Leeds City Region pilots, and extend these pilots to other city regions. Integration of employment and skills investment at a local level through Employment and Skills Boards should be a priority within these city region pilots, given the importance of skills to economic resilience. National industrial, skills and employment policy should be aligned to enable regions and city regions to integrate policies on the ground.
Core Cities & PricewaterhouseCoopers LLP (2008) Unlocking City Growth: Interim Findings on New Funding Mechanisms 35 NLGN (2009) In the Balance: Granting local authorities new financial flexibilities to cope with the downturn
34
70
Regional Development Agencies should:
1. Use the opportunity of Integrated Regional Strategies to invest in and link employment and skills policies more effectively. RDAs have the opportunity to work with partners across the public, private and third sector to address the challenges facing particular people and particular areas. 2. Convene partners at a regional and local level to develop a shared strategic response to the recession and recovery that aligns with national policy, learns from best practice and responds to the needs of the region. RDAs have an important role to play in working with national government to align policies as well as ensuring that local strategies are complementary in the short and medium term.
City regions should:
1. Work in partnership with other local authorities, universities, FE colleges, JobCentre Plus, the Learning and Skills Council and others to develop a strategic response to the recession. This should involve using existing government powers, such as Multi Area Agreements and Employment and Skills Boards, in order to develop a collective response. 2. Balance short term interventions, such as support for those made redundant, with longer term priorities, such as investment in skills. Where possible, short term actions such as infrastructure investment should provide infrastructure that will benefit the city in the longer term rather than only being a priority because of jobs generated. Priorities should be: a. Investment in skills as this is one of the key predictors of how cities fare in the recession; b. Quick and cost effective actions such as local websites coordinating information on how to cope with redundancy; c. Support entrepreneurship amongst the newly redundant, which has longer term benefits.
Local authorities should:
1. Follow the Barcelona principles for action in the recession. The principles have been developed by a group of city leaders and help leaders review their strategic response.
71
2. Take advantage of the new local authority economic assessment role to map the impact of the recession on their local area using the framework below and set out in Section 3. This will enable a review of the extent to which current initiatives respond to short and longer term challenges.
Understanding how the recession is impacting differently on the economy, labour markets, places, leaders and long-term visions should enable cities to identify priorities for action.
72
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise without the prior permission of the publishers. This publication may not be lent, resold, hired out or otherwise disposed of by way of trade in any form, binding or cover other than that in which it is published, without the prior consent of the publishers. To obtain permission, please contact ajones@theworkfoundation.com
73
We provide: Research Advisory Consulting Policy and Voice Partnership
The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks.
Registered as a charity no: 290003 First published: January 2009 The Work Foundation 21 Palmer Street London SW1H 0AD Telephone: 020 7976 3500 Email: enquiries@theworkfoundation.com Website: www.theworkfoundation.com

220 - UK Recession - Recovery - Cities-The Work Foundation

Caricato da

Informazioni sul documento

Descrizione originale:

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

220 - UK Recession - Recovery - Cities-The Work Foundation

Caricato da

Copyright:

Formati disponibili

Recession and Recovery: How UK Cities can respond and drive the recovery

About this report

What has the impact of the recession been on UK cities?

How have UK cities responded?

How does this compare to the response of international cities

What should local and national policymakers do next?

1. Introduction Leadership in a crisis

Introduction Leadership in a crisis

Introduction Leadership in a crisis

2. Evidence of the impact of the recession

Evidence of the impact of the recession

Table 2.1: Forecasts for GDP growth4

Evidence of the impact of the recession

Evidence of the impact of the recession

Evidence of the impact of the recession

Figure 2.1: Male and female unemployment rate

Evidence of the impact of the recession

Source: Labour Force Survey 2.4 Local governance/ leadership

Evidence of the impact of the recession

Evidence of the impact of the recession

Evidence of the impact of the recession

Evidence of the impact of the recession

% of working age population qualified to degree level or above

Evidence of the impact of the recession

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 10 20 30 40 50 60

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 5 10 15 20 25

% of working age population qualified to degree level or above

% of working age population without qualifications

Evidence of the impact of the recession

2) Change in rate of Job Seekers Allowance claimants

Change in claimant rate, May 2007-May 2009 3 to 4 2 to 3 1.1 to 2 0.2 to 1.1

Source: Qualifications: Nomis (2007) Annual Population Survey Residence Based

Evidence of the impact of the recession

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 5 10 15 20 25 30 35 40

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 2 4 6 8 10 12 14 16 18

Employment in manufacturing 2007

Employment in construction 2007

Source: Annual Business Inquiry, Claimant Count from Nomis

Evidence of the impact of the recession

2) Outside the greater South East

3.0 2.5 2.0 1.5 1.0 0.5 0 0 2 4 6 8 10 12 14 16 18

4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 0 2 4 6 8 10 12 14

Employment in financial services (SIC J), 2007

Employment in financial services (SIC J), 2007

Source: Annual Business Inquiry, Claimant Count from Nomis

3. UK local responses to the recession

UK local responses to the recession

UK local responses to the recession

Housing Social housing Local planning

UK local responses to the recession

UK local responses to the recession

UK local responses to the recession

Table 3.2: City economies recessionary impact and local response

Open up public procurement

UK local responses to the recession

UK local responses to the recession

UK local responses to the recession

UK local responses to the recession

UK local responses to the recession

Coordinate redundancy support

Low skilled unemployment Training opportunities

Retrain the unemployed Training