We can work it out? The jobs challenge facing the Liverpool City Region’s mayor

Published on Jobs, Skills and Pay

Although June’s election will dominate the headlines over the next month and a half, voters in some of England’s biggest cities will go to the polls in two weeks to elect Metro Mayors.

Like all the city regions voting on a Mayor, the Liverpool City Region (LCR) – comprised of the local authorities of Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral – has its strengths and weaknesses. But from a living standards perspective the single biggest challenge for the new Mayor is getting to grips with the city region’s low employment rate.

The living standards story of the past 20 years across Liverpool City Region has been mixed. Economic growth was impressive in the decade running up to the financial crisis, growing faster than any other city region. But that growth started from a low base – typical hourly pay is still mid-table, similar to Greater Manchester but lower than the West Midlands city region. On productivity, the LCR is weaker, trailing Manchester with a GVA per hour worked more closely resembling Nottingham or the Tees Valley.

While there is obvious room for improvement on pay and producitivity, it is employment rates where the LCR slips towards the wrong end of the league table. On average across 2016, 68.4 per cent of people aged 16-64 were in work – the second-lowest among the UK’s major city regions. Only the West Midlands performs worst. Getting the LCR employment rate up to the average across other city regions would bring an additional 33,000 people into work.

However, it’s certainly not all negative in the LCR. While only Halton betters the city region average on employment overall, Halton, Sefton, St. Helens and Knowsley all better the city region when it comes to female employment. That’s why when it comes to boosting employment, rather than taking a scattergun approach it’s best to home in on the kinds of workers or areas where more support could be beneficial.

Geography – the leaving (behind) of Liverpool

While some city regions are relatively homogeneous, at least on employment rates, the LCR varies considerably. Most notable is Liverpool, with an employment rate of 64.3 per cent. Coupled with the fact that Liverpool makes up one-third of the total population of the LCR, this poorer employment performance matters a lot, dragging down the average employment rate for the city region to 68.4 per cent. Bringing Liverpool’s employment rate up to the level of the next-worst performing local authority area – the Wirral – would bring another 17,500 people into work, closing more than half the employment gap with other city regions.

The area has of course seen regeneration efforts with a further £1.5bn investment announced in 2014, building on an impressive transformation of the city centre and docks that is clearly underway. While such projects create jobs, what’s more difficult is making sure those struggling to find work have the skills to take advantage. Nearly one in six people (15.9 per cent) aged 16-64 living there have no qualifications, well above the city region average of 9.2 per cent.

The terms of the devolution agreement outline that the Mayor will chair a review of 16+ skills provision. That review should seek to identify how to reduce that share of people with no qualifications but, crucially, ensure the kinds of training they embark on matches the jobs available. Between 2009 and 2015, the number of people working in transport, ICT and professional or technical roles combined rose by 14,000 while the numbers in manufacturing and construction dropped by 11,000 together. For some people, aligning training with job opportunities may mean a shift away from their previous experience.

But workers will also be needed in industries that have been traditionally important in the LCR. The Metro Mayor and combined authority will have powers over £30m a year fund to make the most of the River Mersey and Superport. Connecting funding there with jobs for those groups or areas most in need would be a welcome example of that old cliché, joined-up policymaking.

Disadvantaged groups – jobs for the (old) boys and people with disabilities

The disparities between Liverpool and the rest of the city region aren’t the only consideration however. Across the UK’s city regions as a whole, men aged 50-64 are more likely to be in work than the average. This is not true of the LCR however. The Wirral stands out, with the employment rate of men in this age bracket some 15 per cent lower than the overall employment rate within the local authority. St. Helens (7 per cent lower) and Knowsley (5 per cent) also have this unusual feature of low relative employment for older, but still of working age, men.

An interconnecting is issue is that of disability. An above-average share of men aged 50-64 are inactive, with long-term sickness more commonly cited as the reason. A higher proportion of people in the LCR have a disability than in overall city region average: nearly one in four as opposed to one in five. As well as disability being common, people with disabilities are also less likely to be employed in the LCR than elsewhere.

Were the LCR to achieve a similar employment rate for people with disabilities as other major cities, more than 10,000 extra people would be in work. As the chart below shows, those gaps are by no means uniform. Just one in four disabled people in Liverpool are in work (25.7 per cent) and the corresponding rate in Knowsley is only marginally higher (29.8 per cent), well behind the best performers in the LCR like Sefton where nearly half (48.6 per cent) of disabled people are in work.

For those furthest from the labour market, the Mayor will gain powers to co-design with Westminster employment support. This presents an opportunity to tailor support to the needs of specific groups, like older men and people with disabilities. Transport budgets will also be under the Mayor’s control. Exploring with transport providers how to open up opportunities both to struggling parts of the LCR as well as ensuring it serves those who may have more difficulty in getting around, like people with disabilities, would be another positive move.

Boosting employment by focusing on the areas with most scope to improve and the specific challenges faced by older men of working age emerge as the key priorities for the new Mayor. But, of course, that Mayor shouldn’t be expected to solve these problems alone. Their powers will be limited and overcoming longstanding issues will require time, funding and cooperation with local authorities and the mayor of Liverpool as well as politicians and civil servants in Whitehall.

That said, there is still much that can be achieved. The success of these new Metro Mayors is not just about the formal powers they will have, but also their soft power and the chance to provide strong economic leadership focused on key priorities. So far, the creation of a Metro Mayor has created at least one new vacancy in the LCR. When that position is up for review in 2020, one of the key tests of the Mayor’s success will be whether they’ve helped enough people across the Liverpool City Region to find work too.

 

 

Source: RF analysis of ONS, Labour Force Survey