Yesterday Joseph Rowntree Foundation (JRF), Leeds City Council and Leeds City Region launched a major research project, More Jobs, Better Jobs, to inform policy and practice on supporting growth and tackling poverty in cities (see: http://www.jrf.org.uk/media-centre/more-jobs-better-jobs-needed-economic-recovery).
For me this is very exciting and important; not just because it is a project I have helped develop, and not just because we are taking an independent, evidence-based look at the issues. It is because for the first time in recent years we as a city and a city region are developing a new narrative, policies and interventions based on the concept of “good growth”.
For far too long policies and actions to support economic growth and to tackle poverty have taken place in different silos, by different people, with little inter-connection. The result is that well-intentioned efforts to achieve growth fall inadvertently into the trap of trickle-down economics. And efforts to tackle poverty become focused on dealing with and mitigating the consequences of deprivation, not tackling the causes.
Why is this so important now? And why is it important to Leeds? As the economy has restructures, the labour market has become more polarised, and the gap between places of affluence and deprivation has widened in Leeds and the City Region.
Leeds had the fastest jobs growth of all the Core Cities in the decade before 2008. The city’s economy was hit hard by the recession and ongoing public sector austerity, and is now bouncing back strongly. However there is still some way to go before job numbers are back at pre-recession levels. Further losses of public sector jobs mean that significant job creation in the private sector is needed just to enable us to stand still.
Problems of worklessness and deprivation remain acute and persistent in many parts of our city. Around 65,000 Leeds households (20% of the total) are living in poverty. 150,000 (20%) of the Leeds population live in wards ranked within the 10% most deprived nationally. And for those in work, low pay is an increasing problem. 68,000 jobs in Leeds (18%) are paid less than the living wage of £7:65 an hour. The cost of in-work benefits is increasing and now forms a large proportion of the benefits bill. There is increasing underemployment, particularly amongst part-time workers. The evidence points to increases in the proportion of high paid and low paid jobs, but decreases in the proportion of mid-level jobs. In Professor Mike Campbell’s words, the rungs on the ladder that enable career and income progression are being taken away, or are getting further apart.
So what can be done? I think there are five areas where we need to take action.
First, we need to think about tackling poverty as a means of achieving growth. Worklessness, economic inactivity and low pay impose huge costs on the public sector, and impair economic performance even when assessed by traditional methods such as GDP per head.
Second, whilst we do not want growth at any cost, we do need economic growth and job creation. Otherwise the agenda will be about redistribution, the scope for which will be limited in an era of public sector austerity. Cities and city regions need to attract, retain and generate business investment. They need to put in place the right conditions for growth, which should encompass the role of anchor institutions such as local authorities, universities, colleges, and the health service. They need to ensure the base factors for economic competitiveness are in place in terms of a climate that is open for business, skills, planning, infrastructure, housing and quality of place.
Third, we need to focus not just on getting unemployed people into work, but also on encouraging in-work progression. This will help people move out of low pay, and support them, the labour market as a whole and business to be more adaptive to change and more productive.
Fourth, we need to think about sector policy in a different way. We need to look beyond just the new, glamorous and potentially game-changing sectors and areas for innovation. Other sectors, such as retail, manufacturing, waste, transport and tourism can offer entry-level job opportunities and good prospects for career progression. There is also a need to think about how the glass ceilings can be removed in other sectors such as financial and professional services, sometimes due to an inflexible approach from the professional institutions. Apprenticeships schemes have a role to play.
Finally we need to focus not just on people, but also on place. Migration patterns are an important issue. In some neighbourhoods when people move on in career and income term they then move-out. Improvements in the quality of schools, community facilities, and the housing offer have a role to play in helping lift places, not just people, out of poverty.
Our partnership with JRF will help us understand these issues better, and will inform where we can practically take action to secure more jobs and better jobs to benefit the people of Leeds and Leeds City Region.