A western union: living standards and devolution in the West of England

Published on Incomes and Inequality

This May, voters in the West of England elect a Metro Mayor, with new powers over transport, skills and welfare-to-work policies, as well as the chance to bring economic leadership to their area. The area – comprising Bath and North East Somerset, Bristol and South Gloucestershire – has outperformed most other city regions on a variety of economic indicators.

  • While in many city regions the economy has yet to return to its pre-recession size, the West of England’s GVA per head is now estimated to be 6.9 per cent higher than in 2007.
  • The West of England’s labour market has surpassed expectations too. Its employment rate currently stands at 76.8 per cent, well above both the average across other city regions and its own pre-crisis level.

But the West of England city region faces challenges too:

  • The hourly pay of typical workers in the West of England remains £1 lower in real terms than the high point reached in 2010. That amounts to a still-existing pay squeeze of 7.4 per cent, larger than the city region average of 5.7 per cent.
  • Housing costs place a sizeable drain on incomes. Typical house prices are now nearly 10 times higher than the typical salary, while typical rents are equal to 41 per cent of typical wages.

 

The new Metro Mayor will inherit an economy that compares favourably to other city regions. But there is still much room to improve. Collaboration with central government will of course be vital too. But the powers and funding that the new mayor will gain could bring meaningful improvement to the lives of residents in the West of England and ensure the area continues to be among the best performers in 2017 and beyond.

  • Further progress could be made on employment, boosting employment rates in deprived parts of the West of England and for single parents.
  • The Metro Mayor should act as convenor to encourage productivity-raising responses to the National Living Wage as well as promoting uptake of the voluntary Living Wage to help support low to middle earners in the city.
  • Affordable housing should be front and centre of the combined efforts from local leaders.